Tuesday, February 03, 2009

"UAW: Gift for museum is 'bad timing'

I thought this column written by Paul Gordon, Manager of the JS Business Section was most interesting. Mr. Gordon, on 12/14/04 wrote "When Caterpillar announced its multi-million dollar gift towards a new Downtown Museum, it touched off some protests by union employees and retirees. Stan Valentine wrote, "It seems like Caterpillar has money to give to everybody except us, the people who built the company and made the products the company sold to make the products to build a monument to themselves. It's a million here, $20 million there, and in the meantime they are throwing 560 jobs to Mexico. Why wouldn't we feel better."



Dave Chapman, then president of UAW Local, (2004) said the UAW doesn't oppose a new museum but he felt the timing was terrible. Rick Doty, Local 974 executive vice president, said "Whether the museum money comes from the Cat Foundation or not, it still comes from the sweat and blood of everybody who has ever worked for them."
Tim Elder, director of corporate affairs said "The money to the museum is a gift to all of Peoria, to all our employees, suppliers, dealers and to our neighbors".

That was then and now is now. Museum backers failed miserably in attracting regional support for the downtown museum, private donations have not meet expectations and many pledges may be "suspect" as individual wealth has taken a severe beating for all investors, attendance figures have been altered to meet expectations, no major endowment has been received; most of us believe it will take a $13 million dollar endowment, it's major contributor is in a terrible slump, stock off 65% or more and still dropping, laying off people, moving jobs out of town, cutting back on local suppliers who in turn are laying off, one local supplier has cut his work force from 300 to 80 and the Visitors Center will be a financial drain on Caterpillar every year after it is built.

Museum problems have been mounting in recent years. Nichael Conforti, writes in today's WSJ, "Hardly a day goes by without announcements by museums from Los Angeles to Detroit to New York of substantial reductions in programs, exhibitions, capital projects and staffing--collateral damage from a global financial drubbing that walloped museum donors, retail sales, and most critically, endowments.

Even the enormously wealthy J. Paul Getty Museum last month announced a job freeze and other cot cutting measures." Poorly endowed are in dire situations in on the verge of going bust. Some have taken to selling donated offering which is a "no-no" in the museum business.

To call building a museum a stimulus to the community is more than likely to be a substantial financial drag on this community forever. Short term gains will look puny 5 years from now.

I support jobs but I suggest the unions and even Caterpillar should take another hard look at the "real facts" in additions to the ones given to them by the "experts".

Cat's job is increase value for its stockholder. Like good workers, without stock investors, Cat would and may be, losing some ground to competitors. My wife, a Cat stockholder is not a happy camper and a guaranteed no vote on the referendum.


Despite the Museum Committee spending $625,000 of "private" money on "educating" the public, money that could have been spent on other charitable entities, expect to see very strong opposition to more taxes and a suspect future draw to the complex.

6 comments:

Karrie E. Alms said...

Merle:

Just wondering which figures and formulas are being used, does anyone know?

Do they "show their work" as was required when I was figuring out math problems on a school test?

Scruff said...

Cat can't purchase demand for their product. Consumer demand is a completely separate issue.

Caterpillar is a business, not a charity. Building a Visitors' Center in downtown Peoria is more in the best interest of their business than building an inventory of equipment nobody wants to buy.

It may sting for those that lost their jobs, but without demand Cat has absolutely no reason to keep those people employed.

You seem to really be grasping at anything now to pile on your "No to the Museum" argument.

Vonster said...

When you're putting people out of work, it's time to invest in charities, not elitist pork projects.

Scruff said...

Like I said, Vonster, Cat is a business - not a charity.

It makes more sense for Caterpillar to have an impressive Visitors' Center to show their customers than to tell them about their latest charitable endeavor. When you can't spend your profits towards company growth you have to reinvest within.

That is exactly what a Visitors' Center accomplishes.

Merle Widmer said...

Cat has had approximately 40 years to build a vistors center if they REALLY wanted one. Plus, the Sears building has been vacant for YEARS.

Building AND OPERATING a $40 Visitors Center is a drag on their bottom line. They owe a lot to their stockholders and a spending on something they never felt they needed is not going to add to their bottom line.

Plus Cat has been using this $40 million figure for years. Mark Johnson told the county that construction costs have risen 15%.

Doesn't make my Cat stockholding wife happy nor some of my friends who lost jobs or daily worry about losing their jobs to see Cat building something they've longed deemed "not needed".

Also, what amount is the endowment for the museum? Less than $3 million according to facts submitted to date. The need? Between $8-13 million according to the number crushers.

If costs are rising, so must be the cost of operating the museum. The big one? Electricity.

Do you actually believe all their pledges are remaining steadfast? Look at the economy and think again.

Just the facts, sir. Some say Cat stock will come back and it will come back. But to get back to the $70 and $80's, highs was around $85, today trading at $30, not in my lifetime.

Anonymous said...

"...Just the facts, sir. Some say Cat stock will come back and it will come back. But to get back to the $70 and $80's, highs was around $85, today trading at $30, not in my lifetime..."

So, you are saying $40 million + the endowment make any difference in the stock price? No, $40 million isn't going to make one ounce of difference in the stock price. Nor the ongoing operations.