posted on March 30, 2001 09:30:40 PM new
I am having somewhat of a dilemma right now.And this is somewhat long. So if you can just bear with me on it. Allthough this is not about me. This does affect me and my family. My husband was offered a new position at his place of employment. He has asked me if I think he should take it.
My husband is a machinist has worked at a unionized shop for 23 years. He makes a decent wage and he currently has the option of working there for 7 more years, then leaving and will be able to collect on his pension when he leaves. Right now he pays nothing towards his pension. That is part of his benfit package. We have excellent medical benfits. Where everything is paid for on medical. Very little out of pocket expenses.
This is what they are offering him to come over to managment, as a foreman. One, he would no longer be in the union. A 10 thousand dollar raise the first year. Raises after that once a year up to a maxiumum of 80 thousand a year. But who knows how long it will take to achieve that maxiumn amount. May take 3 years of 15 years.Instead of 53 hours a week, he would work 50 hours. A 401K plan, which they only contribute 4% of whatever he puts in. So he would have to put some of his raise into a 401k. At whatever amount he choses. Health insurance that is nothing compared to what we have now. And because they have a plant in Ireland, he would be required to go there twice a year. For a total of 4 weeks a year. But we are allowed to go with him. Paid by the company. By leaving the union he would have to freeze his pension at what it is now. He would not be able to collect on it in 7 years. He would have to wait until he is 65 years old.
And because he left the union before his 30 and out. It would be at a reduced rate when he is 65 by two hundred dollars a month.He would also lose 1 weeks vacation a year. He currently has 4 weeks per year.
When he asked me yesterday what I thought I told him that I could not make that desicion for him. But if it was me I wouldn't take it.He decided not to take it. And told them today. They are still pressuring him to take this postion. And have told him then just tell us what you think you could fit into into. And we will pay for your education.He is very confused at this point. And don't know what to do. And I don't know what to tell him. He doesn't want to make the wrong decision. He is very secure in his line of work right now. And he is looking forward to being able to retire in 7 years. He knows that if he takes this position he will not be able to do that. But at the same time this is opening new doors for him. And could lead to better things for him. Have any of you been in a similar position? And if so what did you do? I know that sometimes in order to do better you have to take risks. But this is a hard one.
posted on March 30, 2001 09:39:45 PM new
My instinct would be to stay put. Management positions have a bad habit of being the first to go whenever the economy dips.
posted on March 30, 2001 09:41:04 PM new
Look at it this way:
Out of that $10,000 first year raise, how much of that has to go straight to taxes? How much will have to go toward medical & 401K? Not to mention that he can no longer retire in 7 years...
It does not sound like he will be coming out ahead.
If he wants to negotiate, he should try to get better deals on the medical & 401K. $10,000 sounds good, but he would be sacrificing too much, and like you said, who knows what the raises will be after that first year.
Nothing wrong with keeping the doors open, though. It is always good to explore your options.
* I mistaked.
[ edited by debbielennon on Mar 30, 2001 09:42 PM ]
posted on March 30, 2001 09:49:43 PM new
I have, and took it and was making more than twice when I left what I would have if I'd stayed in the craft.
What is so secure? Plants close, companies are bought and sold, many times the in-place people are sent away regardless their time in their jobs.
I had a friend and neighbor who had been the senior fabricator (whatever that was) at the Ford Plant in Milpitas, CA. 24 years in that company. Suddenly they closed the place. He was offered a chance to work in their New Jersey plant, declined, then was offered rudimentary retraining at a local tech school. At his age? Declined. So he was let go. Had a choice of a reduced deferred retirement or a lump sum payout of his accumulated contributions. He took that, let his house go to forclosure, and moved his family to Oregon. He had enough to buy a place there and qualified for social security in a few more years. Never heard from him since.
posted on March 30, 2001 09:55:30 PM new
Wow, that's a difficult decision. Lots of pros and cons. My initial response is to say he should go for it, but there are so many things to factor in.
If he took the position, it would take him longer to retire but he'd be able to retire at a higher standard of living. A 401(k) is an excellent thing to have -- but 4% is a pretty crummy employer match. Still, that's an average return of more than 14% annually on whatever he'd put into it. If he contributed enough it could more than make up for the lost pension benefits at retirement. (Compound interest is a wonderful thing.)
A $10,000 raise is good!
Less vacation time is crummy, but not a deal breaker. That's strange that the health insurance is worse -- good health insurance is so important. I'd think that management would be given health plans as good as those given to non-management.
Moving up career-wise is great, unless he thinks the work is something he wouldn't want to do. The travel to Ireland sounds interesting. I'm sure I'm just rehashing stuff you've already thought about, but maybe it will help to know you're not alone with these thoughts!
It's always hard to leave a comfort zone, even when you know that risk may pay off. If they really want him to do this, maybe he has some room to negotiate for better health benefits or more vacation time? I guess it's a moot point if he's already decided against it, though. Just remember that either way you'll both be fine -- things have a way of working out in the end.
posted on March 30, 2001 09:57:08 PM new
While considering the money is very important, another question to ask is, "Is he really happy where he is AND would he be happy/comfortable in a management position."
Some people are not comfortable in a management position (for whatever reason). THIS IS NOT A BAD THING!!! But it is something to consider.
It sounds like the company is willing to work with him, so why don't you guys sit down and figure out what you would want out of the situation. What things are a 'must', a 'want' and a 'gosh, that would be nice, but don't really need it'. It could be that hubby could get exactly what he wants.
Also, them paying for his education is nice IF he thinks it would really benifit him in the long run. Heck, he could always go back to school in 7 years if that is what he really wanted to do. What oppertunities would he have with more education? Are they worth the time and effort (and time away from the family) that it would take?
Maybe research the company.....how stable is it? Someone mentioned that managers are usually the first to go (not to mention the old 'last on, first off' rule). Does that apply to his field? Is it possible they are trying to move him up because they are facing layoffs at his current level and they don't want to lose him?
I don't envy you the stress of this, but remember to look at the brightside as well. No matter what you do, the company has shown that your husbands hard work as paid off. He is a valued employee and they obviously think highly of him.
posted on March 30, 2001 10:01:32 PM new
Health benefits and raises are the result of bargaining agreements. Managers seldom get such unionized support.
I've seen people promoted and go back, an option given in the first year to them, and I've seen promoted junior craft employees bursting with pride until they realized that they were handing out paychecks to senior people in the craft they'd left that were larger than their own.
posted on March 30, 2001 10:05:03 PM new
[i]"the company has shown that your husbands
hard work as paid off. He is a valued employee and they obviously think highly of him"[/i].
Not always. A promotion removes protections against layoff and separates the promoted from negotiated grievance procedures. Some companies promote in order to be able to get rid of an employee.
posted on March 30, 2001 10:08:04 PM new
If your husband thinks he would be happy as a manager and if, as you indicate, the company is willing to negotiate terms, then I would seriously consider the promotion. Does his current position have payment steps up to $80,000? See if they'll give him the same great health insurance that he has now and perhaps give more for the 401K plan (hopefully you've been putting into one already). Those are the two most important things in the long run. The $ you'll get monthly fromn the 401K will help offset the the changes in pension this move will make. See if they'll go for increasing the vacation again after a year or so. The fact that they'll pay for you to join him in Ireland every year is a *plus* (I envy you that).
posted on March 31, 2001 08:04:49 AM new
I would try to find out how the company has treated salaried workers in the past. With the greater freedom to let you go companies often let you go as you near retirement unless you have some strong internal political power.
I would probably keep the position he has.
The big reason I did machinist work was you can go down the street and have another job the day they can you.
That's why we have wheels under our tool boxes.
posted on March 31, 2001 09:29:22 AM new
Hi Sideslam,
We, too, were faced with this same dilemma at one time.
For my husband, although he enjoyed the work he was doing, the stimulation of a new job was very appealing, which I completely understood.
I was very hesitant. I enjoyed the security of his long-time position, as we were raising a family, I was a stay-at-home mom at the time, we had a mortgage, and I was responsible for handling the finances.
Upon weighing the pros and cons, we agreed that he should stay put in his secure position.
Several years later, cutbacks were made and it was supervisors that were let go. You can be sure we mopped our brows and exclaimed "Whew!!!" when that happened.
As a result of that decision, he was able to take full retirement, which included full benefits, with 30 plus years in 1993.
And, I was able to resign from a position that was taking its toll on not only mine, but my husband's well-being.
He immediately went to work full-time at a job he loves, having worked part-time (Monday nights and Saturdays) for them throughout our marriage. It was completely different work from his regular job and he really enjoyed it, which is why he stayed with it.
Because all of the part-time work counted, he now has 26 years with them, and can retire, should he get to the point where he no longer enjoys it.
All because we made that agonizing,
what-was-right-for-us decision years ago.
posted on March 31, 2001 09:43:27 AM new
I know two men who both faced similar decisions. One opted to keep his hourly job, which had great benefits, union membership, and the ability to put in his 8 hours and then go home. He does work swing shift, on a MAD schedule (midnights, afternoons, days), with a four day weekend once per month I think.
The second man took the management position, gave up all overtime pay due to the switch from hourly to salary. He went from working straight 8 hour days to working 9-11 hours each day, he was a their beck and call pretty much 24/7. The stress level went up according to him at least 50%. Supposedly, he was given a raise to compensate for the shift differential he was giving up and overtime, but at the end of the day, he didn't really see any increase in net pay.
His main reason for taking the offer was to go on a straight day shift, from the swings he had worked up to then. His kids were all still home and in school, and they thought that it was the wise choice. He ended up leaving there on his own about a year ago. The way in which this firm treats their middle management is horrible, compared with the way the union/hourly workers are treated.
Both of these men worked for the same large steel company in my town.
Good luck with your decision...if faced with the same one, I think my hubby would stay with the hourly non-management job. There is something to be said for putting in your hours, and then going home.
posted on March 31, 2001 04:21:50 PM new
Another thing to consider, does the company offer pension buy outs to management or do they offer it to non-management and management. A friend of my brother recently took a pension buyout after 30+ years. He walked away with over $300,000 in his pocket. Also, figure out what your tax rate is. From there you will be able to tell how much of the $10,000 you will see. Also, now your healthcare is provided for free. How much would he have to pay? That would also eat into the increase in salary. As mentioned before when a company cuts jobs, they usually start from the top and work their way down. That is one reason why I have stayed away from management. It is a tough decision to make.
posted on March 31, 2001 06:01:29 PM new
Thanks for all your thoughts on this. He has decided to stay put where he is now. Unless they offer him something better then what they are offering him right now. After taxes, the 401k, more for insurance the raise would be gone. Not to mention the security of the job.Right now they are in a bind and need someone. So they are going to continue pressuring him. That's just the way they are. I think he is doing the right thing.
