Don't blame the former hourly employees, blame managment.
Since the mid to late 70's, the battle cry of corporate America has been, "MAINTAIN THE PROFIT MARGIN".
Cut corners, use cheaper materials, reduce the labor force, and still keep daily output the same.
As the product becomes substandard, sales drop, and they try another round of cost cutting.
The spiral continues until the company goes out of business(or moves the product manufacturing overseas).
We have all seen it.