Railroaders place to shoot the shit.

(The following story by James Carlson appeared on The Capital-Journal website on February 5, 2009.)

TOPEKA, Kan. On a conference call last month laying out the year's earnings, Burlington Northern Santa Fe head Matt Rose said the current market conditions make it necessary to "manage our compensation costs."

Translation BNSF employees shouldn't expect too many raises.
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The railroad company is just one Topeka business taking preventative actions to lessen the problems associated with a nose-diving economy. Security Benefit and women's clothing retailer Coldwater Creek, which is opening in Topeka in April, are both cutting executives' pay in efforts to stay competitive.

Those two businesses are part of a national trend. Caterpillar, generally considered a bellwether manufacturer, is cutting its executives' salaries by as much as half. FedEx, JetBlue Airways and Gannett owner of USA Today are doing the same. Toyota Motor Corp., which had been seen as faring relatively well compared to the Detroit three auto makers, announced last week it would reduce its top executives' pay as well.

Here in Topeka, Security Benefit's executives took their cuts voluntarily, said spokeswoman Michel' Cole.

"It's the right thing to do as we've looked to align our expenses with current market conditions," she said.

The company announced last month plans to cut 120 positions this year 12 percent of its work force because of the downturn in market conditions.

In Topeka, the company will eliminate about 71 jobs, or roughly 10 percent of its 710 employees.

Security Benefit, a financial services and asset management firm, also plans to freeze employee wages. Cole said the executive pay cut coupled with reduced fees for the company's board of directors were important.

"No level of our organization is immune from doing what is necessary," she said.

Coldwater Creek, which plans to open in April on S.W. Wanamaker Road, announced last month its top executives would take a 15 percent cut to their base salaries.

At BNSF, Rose didn't announce any cuts to executive pay but did say during his presentation that the company would utilize 2,000 employee furloughs, minimize hiring for vacant positions and eliminate merit wage raises for salary workers.

At least one big employer in Topeka is faring better. Capitol Federal Savings Bank has so far taken no action to reduce compensation to any level of its employees. President John Dicus said his company didn't get caught up in the subprime loans that have dragged down so many financial institutions.

"We've been sticking to the same kind of business we always have," he said.

He said Capitol Federal runs a "pretty lean staff" most of the time anyway, which makes it easier to adjust to a weaker economy. The company made 60 percent more in its most recent fiscal year ending Sept. 30 than it did the previous year, though he said other companies' relative downturn most likely isn't due to bad management.

"Much of it is just a product of the environment," he said.

Thursday, February 05, 2009