The ‘real’ story behind Convergys closing

Armchair Mayor column, Saturday, Aug. 8, 2009

Kamloops will lose a good employer when Convergys phases out the last of its staff next April.

Though the call centre in the former K-Mart shopping centre in Valleyview was controversial when established nine years ago, it has provided many hundreds of jobs for local residents.

Working at a call centre isn’t everyone’s cup of tea. Stories are legion about people going through training week, starting work and, a couple of days later, deciding unemployment is better than life on the phones.

Staff turnover at Convergys has arguably been the highest of any company in town. That’s just the way it is with call centres — the HR department is engaged pretty well full-time filling empty chairs and keeping staff happy.

A website, convergyssucks.com, is dedicated to former employees trashing the company over everything from wages to dress codes to alleged fistfights in the hallways at its various operations.

When news started leaking out late in 1999 that our city was on the radar for a major call centre, there were those who questioned whether those were the kind of jobs Kamloops needed. Never mind that the unemployment rate had topped 13 per cent and we would have welcomed with open arms just about anything short of a nuclear arms plant.

Then there was the parking lot thing, when the landlord erected those big concrete barriers to keep Coopers food store shoppers out of the soon-to-be Convergys parking area.

Nevertheless, Convergys filled an employment niche here.

This week’s announcement that it will shut its doors due to “the effects of current economic conditions” is puzzling, since Convergys chose Kamloops in the first place in large part for reasons relating to the poor economy at the time.

The key was a large available labour pool. The company needed 600 workers to service its contracts, it said. Kamloops was able to provide those workers. When it opened, the call centre actually began with 100 employees, but that soon increased, and only two years ago 1,200 people were working there, making it the largest private employer in town.

This, despite increasing difficulties in filling vacancies as the economy turned around and the unemployment rate dropped like a stone. Now, with the economy back in a slump, the local unemployment rate is back up to almost 10 per cent, and that flexible labour pool so important to call centres is once again available.

So, how can an economy that helped convince Convergys to expand into Kamloops now be responsible for it leaving town?

Convergys is in the business of “relationship management,” that is, keeping the customers of various corporations happy. Its call centres make their money through contracts with those corporations.

In an economic downturn, some of those corporations are going to experience belt-tightening, which includes customer service, and this is bound to affect a company like Convergys. A Daily News story Friday was headlined Economic Crash Hit Convergys: Analyst.

Key to the health — and the size of the workforce — at the Kamloops centre has always been those contracts with corporate clients. While Convergys keeps information about those clients tight to the chest, we do know that, from time to time, a client will be lost and must be replaced.

American Express is often mentioned as a major client, and word is that contract is coming to an end.

Yet, there is no overt indication that Convergys is downsizing. Just two weeks ago, the company announced the opening of a new facility in the business district of Makati City near Manila in the Philippines.

“This opening marks the fourth of five facilities Convergys has added throughout the country following its major expansion announcement in May 2008,” said the press release, which quoted Convergys Vice President and Country Manager Marife Zamor as saying, “’We are growing exponentially.’”

The company has also recently announced major expansion plans in China. That doesn’t sound like a company pulling in its horns.

Indeed, as it was announcing the closure in Kamloops, Convergys was announcing second quarter revenues of $683 million, down only marginally from the same period last year.

“We delivered very strong free cash flow and significantly improved our liquidity position in a challenging economic environment,” said David Dougherty, the company’s president and CEO.

Clearly, there are nuances to the Convergys decision that are not being explained. A strong clue could lie in the fluctuation of the loonie.

Dougherty was quoted earlier as saying the company was planning tough action in connection with foreign exchange issues. “Most notably we’re being hurt today in Canada and we are taking action to close centres there and move work to other geographies.”

Translated, Convergys can work more cheaply, and realize more profit, by moving its call centres to other countries such as the Philippines and China.

In addition to Kamloops, Convergys has already made a major cut to its Winnipeg operation. Red Deer has closed. Twelve thousand jobs in 15 Canadian centres are on the line as Convergys re-aligns its call-centre operations.

All this is just elementary arithmetic, two plus two: changes in the economy (and a robust loonie) plus opportunities to cut the cost of doing business equals an exodus from Canada, including Kamloops.

The future of Convergys in Kamloops has been the subject of speculation for several months, but confirmation of its closure this week was still something of a shocker.

Nobody can fault a company for seeking the most efficient and economical organization of its work force and technical operations. But Convergys needs to understand that a lot of Kamloops families are being impacted by this business decision, and more explanation than “the effects of current economic conditions” is called for.

After all, Convergys was gifted with a $450,000 “training” incentive from the B.C. government to come to Kamloops, plus $1 million from Ottawa.

That alone should be worthy of a more complete reckoning.

Do not ask me to be your friend

You will not find me on Facebook. Do not ask me to be your Facebook friend, because I am scared spitless of going anywhere near it.

I am, when all is said and done, a private person. I don’t particularly want to share my innermost dreams and ambitions with people I don’t know. For those I do know, I might share a little, but it will not be in writing.

About the most personal thing I’ve posted on this website is confessing that my tractor wouldn’t start one morning.

When I read about how personal information isn’t really secure on Facebook, and about how some of the things people put on the Internet come back to haunt them, I’m perfectly comfortable with not Facebooking or tweeting or any of that.

I really can’t fathom what possesses some people to brag about the time they got so drunk they couldn’t stand up, or post nude photos of themselves, or confess some other indiscretion on the Internet. What is this deep desire to share?

That’s not to say I don’t want to learn more about these things. On my list of things to do is to make our Kamloops Daily News website Twitter friendly. A few other things take priority, but I will get to it.

There’s a great one-day workshop coming up in the fall. Venture Kamloops, the chamber of commerce, and Communication Solutions are teaming up to put it on. Led by Vancouver-based Capulet Communications, it’s about social media and how to use them for business purposes.

It’s proving so popular the first workshop has sold out, but a second one has been scheduled for Sept. 4. If you want to know more, go to the website of one of the co-sponsors.

I’ve signed up for it, and I saved 50 bucks by promising to mention it on my blog. Now you know something else about me — I’m thrifty.

Fires bring back memories of 1961

Many people are reminiscing about the terrible summer of 2003 when we had several mega-fires raging through our forests in the Kamloops region.

I remember that summer well, but the efficiency and professionalism with which forestry crews and other agencies are fighting the fires during this summer of 2009 have me also thinking about the summer of 1961.

That was the summer I fought fire. It was probably one of the worst experiences of my life, as I got trapped alone behind the fire line for about a half hour and made it out only with some good luck and a sudden change in wind.

I remember, as well, just how dirty and utterly exhausting the work was. Watching these fires on TV or reading about them in the paper provides no insight whatsoever into just how hard it is to work on a fire crew.

Things are much different now, though, in how fires are fought. We read nowadays about professional firefighters coming in from other cities and provinces to help out. These men don’t just walk into a fire zone — they’re trained and ready.

In the summer of 1961, nobody was trained, nor ready. In those days, fire crews were signed up mostly in local beer parlous. A forestry guy would walk into a bar and recruit every able-bodied man he could find.

You didn’t have a choice. By law, you had to go fight fires if you were ordered. If you were wearing running shoes or a dress suit at the time, too bad — that’s what you wore to fight the fire.

I was too young in 1961 to be sitting in a beer parlour — I was still of the age when we hung around near a side door and tried to talk someone into bootlegging us a case. No, I joined the fire line that year because I and a couple of friends didn’t have anything better to do.

We drove as far as we could and walked the rest of the way until we ran into somebody who looked like he was in charge. We were hired on the spot and put to work. I hated every minute of it and deserted in the middle of the night, walking all the way home, several miles. I can still remember having one of the longest showers of my life trying to get the soot and smoke off me.

They probably could have charged me with something, but the crew boss was understanding, and saw to it I was paid for the hours I’d put in before I decided this was no way to spend a summer.

Talk about your dog days of summer

Armchair Mayor column, The Kamloops Daily News, Aug. 1, 2009

“Dog Days of summer. . . the hottest, most sultry days of summer. . . . Dog Days can also define a time period or event that is very hot or stagnant, or marked by dull lack of progress.”

Boy, talk about your Dog Days. I don’t recall another time in Kamloops when it was this torpid. If things were any slower we’d be going backwards. It’s stickier than a peanut butter and jelly sandwich. As granny used to say, it’s so dull you could ride to London on it.

“The ancients sacrificed a brown dog at the beginning of the Dog Days to appease the rage of Sirius, believing that the star was the cause of the hot, sultry weather.”

But I’m not talking about the weather. I’m talking Kamloops politics.

Something has gone terribly, terribly wrong. We’ve gone from nasty and fun to nice and boring.

Whatever happened to the days when Betty would push Terry, Terry would push Betty, and tempers would flare?

Ah, those were good times in the news game. Betty would snark at everyone in sight, Terry would grump away at Betty and there was never a dull moment, always a good headline.

Now, we’ve got Mr. Nice Guy at the helm in City Hall, Ms. Manners working for us in Ottawa, Terry retired to the back benches in Victoria, and Kevin — well, OK, we’ve still got Kevin.

Even Kamloops and the regional district get along like kissing cousins. I remember when rural directors used City directors for target practice. John Taylor, Chris O’Connor and others would sit there and grouch away about how Kamloops was always trying to run the show, and City directors would calmly point out that Kamloops taxpayers were paying for 54 per cent of the TNRD so they darn well should run the show.

One day, rural directors were so ticked off with Kamloops they staged a walkout during a board meeting. These days, the mayor of Kamloops not only gets along with regional directors, they elected him chair of the board.

You don’t have much to write about when everybody is happy.

As one newsroom observer put it the other day, we’ve gone from red hot to beige in local politics.

Take Peter Milobar, for example. He gets a little impatient at times, but has anyone ever heard him actually utter an unkind word? He is Mr. Steady As She Goes, Mr. Let’s All Just Get Along.

His campaign slogan was “A Balanced Approach,” for crying out loud.

At the Communities In Bloom dinner this week, Milobar was in fine form (he’s turned into a very good public speaker), having just returned from a meeting of regional district chairs in Vancouver. Returning to Kamloops, he said, always makes him appreciate “how dysfunctional the rest of the province is.”

Elaborating later, he said that in other jurisdictions, there’s a lot of scrapping among agencies and boards that are supposed to work together. Whereas, here, everything is lovey dovey in comparison.

“Dog Days were popularly believed to be an evil time ‘when the seas boiled, wine turned sour, dogs grew mad, and all creatures became languid, causing to man burning fevers, hysterics, and phrensies’.”

The only mad dogs here are going nuts from boredom. We could use a few hysterics to liven things up. Maybe a phrensy or two.

We’re sure not going to get them from Cathy McLeod. From Betty to Cathy, we’ve gone from the ridiculous to the sublime. It’s supposed to be the other way around.

The media, on a slow day, could always depend on Betty to come through with something bizarre or at least a dissertation on how everybody other than the Tories was doing everything wrong.

It seems like only yesterday I was in Ottawa with the mayor of a small Interior town not far from Kamloops, standing in the hallway of the Parliament Buildings getting a lecture from Betty about how politics really works.

“What a —!” the mayor quietly exclaimed after Betty walked away (I will allow you to fill in the blank).

Now we’ve got Cathy, a truly pleasant, hard-working woman who builds relationships instead of destroys them. It’s almost enough to think Conservatives aren’t so bad after all. Note, I said almost.

 “Dog days. 1. the period between early July and early September when the hot sultry weather of summer usually occurs in the northern hemisphere
2. a period of stagnation or inactivity.”

To be precise, in Ancient Rome, the Dog Days were officially between July 24 through Aug. 24, which fits Kamloops pretty well in any given year.

Any Kamloopsian knows it takes longer to get things done in the summer. Everybody is at the beach. I fear, though, that when it comes to local politics we may be in for a prolonged period of beigeness that goes way beyond September.

Kevin might be our only hope. Happy B.C. Day.

mrothenburger@kamloopsnews.ca

http://www.armchairmayor.wordpress.com