Thursday, November 09, 2017

It sucks to be king.

I really liked working with a commercial contractor because there was always a guy that kept everyone supplied. There was absolutely no work stoppage ever. The job Foreman/owner probably spent about 10 minutes at my place everyday.

After a couple of weeks he told me that he was planning to retire in a couple of years and that they were talking about making the company employee run, and he'd just rent back all of the equipment to them. Which is something I always love. I always want the workers to become owners and so on.

However about a week later I was talking to some of the workers and they mentioned something about the boss retiring and I said - does that mean all of you guys are going to rise up in the ranks?

He tells me - I know they are talking about making the company employee run, but we don't want it.

I was like - why?

He said - the boss is always complaining that he isn't making any money. If he can't make money doing this, how can I expect to make any money?

Yet at the very same time that exact guy was doing the most egregious poaching of future work from the company. I have another project I probably need to get done some time next year and he was trying to poach that job. Which I kinda don't have a problem with. I want everyone to break out on their own. This is the cycle of life. Everyone who works for you is imagining a better cheaper way to do what you do. I've just never had it so blatantly done like that. And I imagine if the boss knew they were going that - he'd be pissed.

So.... I don't really know how that guys retirement is going to work out because he shouldn't count on those guys taking the helm. I just felt the whole thing kinda sucked because I can't figure out why they wouldn't take an already established business.

3 comments:

  1. What sounds like an "employee-run company" in concept is actually a thinly disguised scheme to turn the existing company into a semi-captive company that purchases all of its equipment rentals from another company.

    The current "boss" could bank huge cash if he didn't have to worry about having to find markets and buyers for his future equipment rentals business.

    Those employees simply haven't thought this out all the way, but already they smell a bad thing in advance of it happening. They're not actually being offered the option of taking over an "established business", they're being offered the option of keeping their jobs within a gutted business in which the capital outlays have been restructured inside another company. This effectively shakes down the "employees-as-business-operators" for cash.

    So yeah, it's a crappy deal for the employees, but it makes the current owner sound like he's such a swell guy just for being so good-hearted with the offer ...

    Because the employees know how it's probably going to go down, they're covering their back sides by "poaching" work. This isn't a bad idea at all: if the company's going to get gutted because the current owner really wants to run an equipment leasing company, the smarter ones will need new jobs anyway, and they might as well do some side gigs in advance because the money flow will eventually be interrupted.

    The employees aren't the bad actors in this scenario.

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  2. Some things in this story don't seem quite clear.

    -- If the work being done is equipment intensive, how can the employees poach said work without simultaneously poaching their employer's equipment.

    -- A lot of side work (whether it's done by poaching employees, off-duty firemen, etc.,) gets done without the protections (and associated costs)of work performed by a legitimate business entity. Most employees/side-workers are not licensed, insured, certified, etc., They also do not have to field a sales force, office staff, and/or purchase and maintain facilities (to house and maintain equipment.) So, if their price cheaper than a regular business', there's probably a good reason for it.


    ..."I can't figure out why they wouldn't take an already established business."

    IME, no employee I ever had had the wherewithal to work all day, and then come back to the office on nights and weekends to do paperwork, fight with insurance companies, appease cranky customers, fix abused and worn equipment, replenish and stage stock, borrow money to make payroll (while skipping your own check), etc.,

    Capital of Texas Refugee said...
    "The employees aren't the bad actors in this scenario."

    Maybe, and maybe not. However the only listed fact was that these employees were egregiously poaching their boss' future work (which, when last I checked, is kind of a kreppy thing to do.) Everything else you listed is based on facts not in evidence, justifying some pretty unethical behavior.

    Krusty

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  3. Both very interesting and valid points.

    "What sounds like an "employee-run company" in concept is actually a thinly disguised scheme to turn the existing company into a semi-captive company that purchases all of its equipment rentals from another company.,

    I agree that this sounds like a shit deal, but if the reason they can't just start a company on their own is because it's capital intensive (i.e) buying equiptment - this gives them an opportunity to wean themselves off. The first year sucks because you are renting. But maybe you can buy one or two pieces of vital equipment. Then the next year things are a little better and so on. They can also rent from any equipment rental place which I've seen many guys do.

    "Because the employees know how it's probably going to go down, they're covering their back sides by "poaching" work. This isn't a bad idea at all: if the company's going to get gutted because the current owner really wants to run an equipment leasing company, the smarter ones will need new jobs anyway, and they might as well do some side gigs in advance because the money flow will eventually be interrupted.

    I'd also tend to agree with this, but if they felt this was the eventual outcome, why wouldn't they just jump ship now?
    I'm pretty sure a corpse could get hired at a job site today if they could manage a way to wield a hammer. That's
    how tight this labor force is right now. The world is your lobster if you can built stuff right now.

    I was in the check out line a couple of days ago and small talk turned to construction. She girl beside me said her
    husband was a roofer and they needed a new roof but he didn't want to do it himself. And even she was
    shocked at how much other roofers were giving her quotes for. It seems to me those guys could work almost anywhere
    they wanted right now. Why wait?

    "Some things in this story don't seem quite clear."

    Agreed. But sometimes you can only get the details people are willing to share with you. None of this shit is
    any of my business, and I'm a new customer. I was a little surprised they revealed this much to me. But I can see things
    from both sides. If I'm set to retire, an equipment rental business doesn't seen like a bad idea.

    They also do not have to field a sales force, office staff, and/or purchase and maintain facilities (to house and maintain equipment.) So, if their price cheaper than a regular business', there's probably a good reason for it.

    Yeah. Especially the insurance part. While unethical, I don't fault the guy for trying to break out on his
    own. The Valley is full of unethical dicks. It's the cycle of business. I was just a little amazed a guy would ask how much the boss
    was charging so he could poach. But then - my job wasn't normal so I couldn't really give him a price.

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