Productivity Improvements

["Van Putten, Dirk [ETP/SAN]" <Dvanputten@lodanwest.com>]

Dear DEN:

I have been involved in Lean Manufacturing
since 1992. We were always told that productivity improvements in a defined
system would result in freed resources that can be applied to expanding a
market, gaining market share, or to paying for other costs.

We were always told that productivity improvements would benefit all within
a defined system. 

I am sure I am simplifying this complex issue but it sure does not seem to
be working out that way. See the Wall Street Journal article below.

Sincerely, Dirk van Putten
Quality Assurance Manager
LoDan International
1050 Commercial St.
San Carlos, CA 94070
Phone: (650) 596-4286
Fax: (650) 637-3580


THE AFTERNOON REPORT (IN FULL)

The Latest Economic Numbers
Paint Picture of Odd Recovery 

By JASON FRY 
THE WALL STREET JOURNAL ONLINE 

It's a recovery, but an odd one.

Today's unemployment report from the Labor Department came as a surprise:
Nonfarm payrolls declined by 93,000 in August, the steepest cuts in five
months and the stuff of double-takes for economists surveyed by Dow Jones
Newswires and CNBC. After all, they'd been banking on a gain of 12,000 jobs.
The unemployment rate fell a tenth of a percentage point to 6.1%,
confounding expectations that the rate would hold steady at 6.2%.

The job cuts were broad-based: The manufacturing sector shed 44,000 jobs in
August and has lost about 2.7 million jobs over the last three years; the
service sector cut 67,000 jobs; and the professional and business-services
sector cut 28,000 jobs -- the first decline in five months. On the brighter
side, the construction industry added 19,000 jobs and the educational and
health-services sector added 24,000 jobs.

Total job cuts since the start of the year? 431,000. And yet the economy, by
most measures, is rebounding nicely: It grew at a 3.1% annual rate in the
second quarter and is expected to grow at a clip of at least 5% in the
current quarter.

The hidden hand here is the same one at work in other recent economic
reports: a surge in worker productivity, which rose 6.8% in the second
quarter. That rise has let companies hold off on new hires until profits
improve and the recovery has truly taken hold, producing the strange
spectacle of a "jobless recovery" in which one's never quite sure what the
next report will bring.