Problems of Companies Announcing Layoffs in Advance

Tipping off creditors and employees well in advance of premature problems that require plant closings, can cause corporate disaster.

Yet, left-thinking politicians and their union backers have had legislation created where employers of a certain size and type must notify employees well in advance of possible plant close-downs.

I can see why employees would like to know in advance, if they were to be trained for other jobs. But such action may unduly scare employees in the event the plants are not eventually closed.

Many times, financial conditions are dire, and finances cannot be arranged properly until the last minute. Once a notification has been made, you may have already lost employees with which you would have resuscitated the operation.

And then you have the question of credit. Once the mandatory plant closing announcement is made, the company’s credit may be permanently damaged. Stockholder values, including pension holders and other such institutions may be adversely effected.

As in most of such labor/corporate events, the general media provides a one-sided slant.