Archives For Corporations

The Triangle Factory Fire was a defining moment in US history. Here is a little about what Wikipedia says about it

2014-04-30_09-32-20The Triangle Shirtwaist Factory fire in Manhattan, New York City on March 25, 1911 was one of the deadliest industrial disasters in the history of the city, and resulted in the fourth highest loss of life from an industrial accident in U.S. history…

The fire caused the deaths of 146 garment workers – 123 women and 23 men [1] – who died from the fire, smoke inhalation, or falling or jumping to their deaths. Most of the victims were recent Jewish and Italian immigrant women aged sixteen to twenty-three…

Because the owners had locked the doors to the stairwells and exits – a common practice at the time to prevent pilferage and unauthorized breaks[6] – many of the workers who could not escape the burning building jumped from the eighth, ninth, and tenth floors to the streets below. The fire led to legislation requiring improved factory safety standards and helped spur the growth of the International Ladies’ Garment Workers’ Union, which fought for better working conditions for sweatshop workers.

I recently watched a very moving documentary about it on PBS. One of the shocking things I learned from that program was just how much the “system” was against the striking workers. The police, judges and city hall did monstrous things to beat the women back.  It would take J.P. Morgan’s  very privileged daughter to turn this trend. When she came out in favor of the workers things finally started to shift.

For those who might misunderstand the meanings of my words I want to state up front that I believe capitalism is the greatest monetary system in the world. Nothing else even comes close.  But this tragedy is a lesson learned that you just can’t have unregulated industrialization.  Without regulation greed overwhelms the capitalistic system. The owners who caused these unnecessary deaths took their insurance money and basically disappeared with no consequences for the deaths they caused.

I do thank God that these sort of things don’t happen in this country today but they continue to happen in those countries that supply us with our unquenchable desire for more and more cheap goods. We have current government agencies such as OSHA and although they are generally very understaffed compared to those they regulate they do a good job of reigning in unsafe corporate greed.

 

 

2014-08-03_11-10-40But the problem is we have structured our economy in this sort of death spirally way, where huge profitable organizations like Wal-Mart pay poverty wages to a million workers, and then taxpayers make up the difference in social services programs like food stamps and Medicaid and rent assistance, and so on and so forth.  It’s as morally repugnant as it is economically inefficient.

It’s a fact that Wal-Mart earned $27 billion in profit last year. They could afford to pay their bottom million workers $10,000 more a year, raise all of those people out of poverty, save tax payers billions of dollars, and still earn $17 billion in profit, right.

It’s simply nuts that we have allowed this to happen. And the only way you can change things is to raise the minimum wage. Certainly the people that run Wal-Mart will not do this on their own.  The idea that businesses will go out of business if they pay workers more is just not true, even though I understand the sort of visceral fear that some of them feel about this change.

SOURCE: Why capitalism has nothing to do with supply and demand | Making Sen$e | PBS NewsHour.

These quotes above drive home what I believe is a very basic reason our economy is still in the state that it is. We just give too much power to the most avid capitalists among us. In other words we give too much power to those few who control most of our nation’s wealth. I am a firm believer in the idea that government’s role in a democratic/capitalist society is to reign in the greed that naturally comes with capitalism.

Unions used to have some control over this wage vs established wealth issue but that is just no longer the case. As is typical of these sort of thing unions themselves became too powerful and as a result too self-focused and corrupt to continue to hold the influence they once had. Unfortunately there was nothing there to replace the void left by the extinction of unions so it is necessary for our government to step in. But even that is another tragic failure in this very disjointed country.

With the almost total breakdown of the ability to govern, especially at the national level, this dichotomy between wages and wealth has gone unabated for a couple of decades now. Our economy is almost totally based on consumer spending but if consumers are stripped of any sense of discretionary income it seems like that is a natural spiral that we will not escape from. The richest among us just don’t eat out 10,000 times a month to replace those who can no longer afford such luxury.

We depend on our government to reign in the excess of our capitalist system and that is just not happening in today’s world.

2014-03-20_09-06-16Tesla’s campaign to sell its electric cars directly to consumers shifted into high gear this week as state lawmakers debated Tesla-related bills while powerful auto lobbyists braced for a fight. In New York, a measure designed to ban Tesla from opening new stores passed a key hurdle, while in Arizona, lawmakers pushed a bill to make it easier for Tesla to sell its cars without establishing a dealer network.

The escalating conflict underscores Tesla’s role as a disruptive force in the U.S. auto industry, not only because the company’s cars don’t use gasoline engines, but also because Tesla is trying to upend the dealership-franchise model that has underpinned the automobile industry for decades. That model — and laws protecting it — emerged in the 1930s as a way for automakers to build a national sales and service force and help foster local economic growth.

SOURCE: Tesla’s War With the States Shifts Into Overdrive | TIME.com.

I have mixed feelings about the above topic.  This is kind of like a David/Goliath type thing. The little dealership guys are being squeezed out by the big corporations the same way as WalMart is squeezing out local retailers.  But size is a relative thing. Yeah Telsa is probably bigger then most auto dealerships but it is very small compared to its other automotive competitors. It is also pretty easy to see that those who own local or regional auto dealerships are usually much wealthier than the rest of us.  It is not uncommon to see mufti-millionaires auto dealer owners.  So David/Goliath is a relative thing.

Realtors are also in this type of corundum. When I sold my house in New Jersey it never actually went on the market. My realtor happened to have someone waiting for my type of house. When we closed on the house the realtor received a check from me for almost $18,000 for two hours work or so.  The only ones who even come close to that hourly wage are big time surgeons and some CEOs  :)

The other example in my part of the country is in liquor distributorships. If you can land one you are assured a big annual paycheck. They are given out mostly as a political favor by State level politicians.

I don’t know but it seems like these sort of things need fixing. We should be able to buy direct and bargain with others for what are currently set as “standard” fees. Wages for most of us haven’t changed much in the last decade or more so the little guy needs all the help he can get in today’s world even as a consumer.

 

2014-01-31_08-57-01First, Google cracked the code on Internet search. Then the company used its search platform to build the world’s largest online advertising business. Now, the Silicon Valley icon is turning its attention toward streamlining its business to focus on next-generation hardware and services, particularly in the mobile space. Judging by Google’s latest earnings report, the company’s core business remains robust, as the Cupertino, Calif.-based cash machine posted strong sales and profit growth on Thursday, sending its stock price surging more than 4% in after-hours trading to an all-time high for the second consecutive quarter.

SOURCE:  Google Is Making Itself a Lot Leaner and Meaner | TIME.com.

I don’t know how many of my readers realize just how earth-shaking the search platform that Google developed was. Before that time it took sometimes hours to find some of the most basic info on the Internet.  Let’s take a quick look at what Wiki says:

Google was founded by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University. Together they own about 16 percent of its shares. They incorporated Google as a privately held company on September 4, 1998. An initial public offering followed on August 19, 2004. Its mission statement from the outset was “to organize the world’s information and make it universally accessible and useful”, and its unofficial slogan was “Don’t be evil”. In 2006 Google moved to headquarters in Mountain View, California, nicknamed the Googleplex.

Simply speaking Page and Brin made the internet what it is today. Never mind that Al Gore invented it ( :) ), they changed it from a complex military network into an everyday appliance.  For that reason I am an avid fan. Even if I don’t use their browser or some of the other tools they make available. The above article is about how they have grown in the last ten years and where they might be going in the next ten. Will they go the way of Apple or the way of Microsoft?  That is a basic question that needs to be answered and I’m sure they are very aware of that difference.

Most of us old guys, especially the techies among us, know that Microsoft and Apple  happened at about the same time. Microsoft developed a user interface that totally dwarfed the FORTRAN language that was used to program the IBM mainframes. When I was in college desktop computers were still just a dream. Even in college I realized that computers would be a big part of the future so I took a couple of classes to build an initial foundation.  I spent hours writing up a very foreign code and then typing it out on punch cards which were used to put the code in the mainframe very early the next morning. Of course there was always that one card of out hundreds that I misspelled something and therefore the whole lot was rejected.

Thanks to Google, and yes Microsoft and Apple, the initial experiences of new users are vastly different from my own.

America unleashed…

February 3, 2014

2014-01-24_10-50-34At the same time, while many people mindlessly repeat the phrase, “We don’t make anything here anymore,” it’s simply not true. The fact is the United States remains the preeminent manufacturing power in the world, producing about 20 percent of the world’s manufactured goods in the United States, and a lot more outside the country. Though China produces almost as much as the United States does within its borders — also about 20 percent of the world’s goods — there is a big difference between what our two countries make.

China is a world power in low-margin electronics assembly, textiles and machinery. But the United States is a powerhouse in high-end, high-margin, sophisticated manufacturing processes. The United States leads the world in aircraft engines, turbines, avionics, advanced material fabrication, helicopters, business jets, and — depending on the year — airliners. We are also the leader in sophisticated radar and telecommunications technology, and, of course, in weaponry. In addition, the United States has retained its leadership in space, with private companies, like SpaceX, building some of the world\’s most sophisticated rockets.

There is a lot of evidence that there was movement underway to repatriate manufacturing to the U.S. from abroad before the 2008 crash. That movement stopped during the Great Recession but has now resumed. American companies, as well as foreign firms, are expanding their manufacturing in the U.S. BMW, for example, is now making all of its SUVs for the world in the U.S.

SOURCE: America unleashed: Why we’ll be number one once more | PBS NewsHour.

This is one of the few upbeat articles about the U.S. that I have come across lately. Although I am skeptical about all the claims there is enough evidence to show that we might be on the verge of a comeback in 2014. That is good news indeed, except maybe for those who are not qualified for these more intellectual jobs that are being created.

Except for the decision by Apple Computer to build their top-of-the-line $10,000 Macbook here,I haven’t heard much about companies wanting to repatriate manufacturing within our shores. On this topic of U.S. jobs there is a mountain of hype going on so it is hard to discern fact from fallacy. Everyone with a particular agenda has their own story and it often directly conflicts with another story.

While China may have started out as Japan did in the 1950s with low-cost, low margin manufacturing they are quickly moving beyond that state. They are currently setting up manufacturing for commercial airliners, automobiles and such. It took them only five years to come up to par with the U.S. in manufacturing. What will the next ten years be?  I hope someone besides China is looking that far ahead?

Now if we can just get our educational system that prepares people for these “sophisticated” systems jobs we might must live to fight another day….

 

A Direct Connection…

January 21, 2014

Amazon spokesperson Mary Osako, meanwhile, told Businessweek that “our employees have made it clear that they prefer a direct connection with Amazon.”

“This direct connection is the most effective way to understand and respond to the wants and needs of our employees. Amazon’s culture and business model are based on rapid innovation, flexibility and open lines of direct communication between managers and associates.”

SOURCE: Amazon Workers Vote Against Forming Union | TIME.com.

Lets face it unions today have a pretty bad reputation with many of us. In the past they have tended to make an enemy of the people who hire their workers.  It was always an adversarial arrangement.  Whatever the company wants the union is against. With that reputation it is hard to form unions today. I know I just finished a post recently about a paradigm shift needed to solve the unemployment/education problems in our country but this is another one that will require a similar shift. I hope Amazon is doing just that.

Unions of the past just have to move beyond and adversarial relationship with employers if they hope to have a place in the 21st century. Likewise employers must do what is needed to rekindle the loyalty that many mid-twentieth century companies had. They must once again start treating their workers as assets instead of liabilities.

I admit up front that I have only a limited exposure to the employee side of Amazon but from what I can glean they try to treat their workers with respect and they do pay more than the prevailing wages along with attractive benefits. Jeff Bezos is one of the few present CEOs who seem to look mainly to the long-term future when mapping out his company’s strategies.

Here is a quote from an article about Amazon along with some info about salaries.

Amazon PayThe company deserves praise for heavily investing in its business and hiring full-time workers at a time when many other firms are playing it safe. Even an extremely healthy economy is going to include jobs that don’t pay very well. But the fact that President Obama has chosen an Amazon fulfillment center as the backdrop for a speech on how to bring back strong, middle-class jobs illustrates the difficult position the government finds itself in as it tries to encourage a more robust recovery.
SOURCE: Amazon’s Hiring Spree Shows Difficulties for American Middle Class | TIME.com

I certainly hope that Amazon is serious that its culture and business model are based on rapid innovation, flexibility and open lines of direct communication between managers and associates.” To be competitive in the coming years will demand a loyal workforce who is willing to adapt to changes as needed. It will require companies to treat their employees with respect and as valuable member of a united team. If unions can adapt to this new paradigm then they will have a place in future society.  If not they will, as the current trends indicate, simply go the way of the dinosaur.

Innovation“Now is the time to build on this momentum and accelerate our share and profits in phones,” Microsoft CEO Steve Ballmer said in an email to Microsoft employees. “Clearly, greater success with phones will strengthen the overall opportunity for us and our partners to deliver on our strategy to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.

SOURCE:  Microsoft Buying Nokia’s Devices and Phone Business for $7 Billion – ABC News.

I was around in the beginning of Microsoft. I was a very early implementor of the Office programs. They were a brash company of young hippies who dared to take on the monolithic IBM corporation. They were just too young and naive to know that they couldn’t play on the same field. That’s what makes for the true game-changers in today’s world. The paradigm shifts occur most frequently from these brash startups.

But as is usual success breeds complacency. After you get so big you start worrying about profits and such above innovation. It seems almost impossible to prevent that from happening.  Apple seems to be about the only company that has at least today  that been able to defeat this trend. But, even for them, the writing seems to be on the wall now that Steve Jobs is gone.

Getting to the point of this post, when a company becomes too big to really be a success at innovation they try to buy it instead of creating it.  Microsoft has spurred more billionaires than most any other company. They try to buy small companies and the somehow hope to inherit their zeal. Most often all that happens is the original owner, with his recently acquired billions just moves one to something else. Buying innovative zeal seldom seems to work but it is almost a last-ditch effort for most large corporations. I personally was involved in an attempted merger between two very different work cultures. Within a year it was obvious to everyone that nothing productive would result.

It is a fact that the vast majority of employment in the U.S. comes from the mega-corps. Companies with more than 500 workers employ about three-fourths of the current workforce. So when people say that small business drives America that is just not true when it comes to actual employees but it is generally true with it come to innovation.

For two decades close to 40 percent of the highest-paid CEOs in the U.S. have performed abysmally, a new report asserts.

These CEOs, according to the report, “ought to be exemplars of value-added performance,” given the prevailing notion that executives earn their high pay by adding value to their companies and to the U.S. economy at large. “Our analysis reveals widespread poor performance.”

SOURCE: Highest Paid Worst Performing Chief Executives – ABC News.

I generally belive in the saying in the title of this post but obviously it doesn’t apply to all circumstances.

Given that yesterday was a celebration of the American worker I thought today should be about those at the top of the heap.

Why do corporate boards allow contracts for CEOs to contain clauses that basically say “no matter how bad I do, when I leave you will pay me and extra $50 million”. Of course the answer to that is that most board members are also CEOs or wanna-be-CEOs looking for a little quid pro quo. It is widely known that the ratio between the average worker of a corporation and the CEO ratio has gone completely haywire in the last few decades. CEOs make orders of magnitude more than they did decades ago while their workers haven’t seen a raise at all during that time period.

It would be one thing if the CEO actually added value to the company he works for but in nearly half the companies he fails to do that. “You get what you pay for” just doesn’t apply to the top of the corporate heap or probably any other position in that stratosphere.

It is time for all us shareholders with our vote demand that the CEO  must show some value-added before we pay him even close to the exuberant salaries he presently draws. And certainly no more “golden parachutes” for him or all those “yes” men around him. That accomplishment would make for a truly happy Labor Day in the years ahead.

Thinking Long Term….

August 9, 2013

BezosThe Post, according to its own announcement of its sale for $250 million, has suffered a 44 percent drop in operating revenue over the past six years. Like other once-prosperous big-city dailies, it has been wounded by the defection of readers and advertisers to Internet competitors. No major U.S. newspaper now claims to have a business model that would guarantee its survival, let alone its success long-term.

But the “long-term” is where Bezos’ mind naturally likes to go, says Brad Stone, senior technology writer for Bloomberg Businessweek. Stone’s forthcoming book “The Everything Store: Jeff Bezos and the Age of Amazon” will be out this October

SOURCE:  Bezos’ Weird Pet Projects Now Include Washington Post – ABC News.

I have been a fan of Amazon since its inception in 1994.  Jeff Bezos, who founded the company, was unlike almost everyone in the corporate world. The Wall Street Journal was constantly lambasting him because he seemed totally unconcerned the Amazon was not making a profit for several years. But as this article above states Bezos is one of those few corporate leaders who focuses on the long term.

Instead of making a quick and large profit Amazon he focused on doing things right for the customer and growth. I don’t believe anyone in the business world is as customer focused as Amazon. They simply do it right. They almost always exceed my expectations.

Most CEOs around today are focused on their future options. That is they want to show a big profit early, collect their stock options, and then get out with the MEGA-bucks golden parachutes.

There are a few fundamental reasons that American industry is losing it hold on the corporate world. One is the lack of long term thinking. Another is that the larger companies are stuck paying for an ever increasing medical insurance for their employees where their international competitors are not holding that burden. We are about the only country in the world that requires their businesses to take on that load. For the most part we learned our lessons about producing quality products in the 1970s and 80s but many are now falling back into low quality by accepting some Chinese goods made at extremely low labor costs and very thin quality.

When our companies finally start thinking long term and we recognize that tax payer funded health care should be a right not an entitlement to an ever increasing few, we may just find our way back to the top of the heap.

I’m not sure how Mr. Bezos is thinking that the Washington Post buy is good for the long term? Maybe he is looking more that their talented reporter pool instead of the paper product they put out on a daily basis.  After all, it takes grunts-on–the-ground to come up with all the stories and info in the on-line world.

skilledST. PAUL, Minn. – We previously reported that one thing holding back the economic recovery is there just aren’t enough skilled workers. But some companies have decided if they can’t find qualified employees, they’ll just create them — as we found out in St. Paul, Minnesota….

Tuition is $4,000, but the coalition provides scholarships. Later this month, the first class will graduate 18 students.  How does that compare to building a successful business? “It’s bigger,” said Guarino. “It’s bigger. It’s more important.”  For companies needing highly-skilled workers, it is a way to do good while ensuring they do well.

Source:  Minn. companies are “building” new workers from scratch – CBS News.

In my day it was common practice to bring in fresh recruits and train them for the job you needed filled. I don’t know when that fell out of favor but it is nice to see it coming back at least in a small degree. Sometimes all we need to be successful is a little help. I have proudly proclaimed more than once on this blog that I worked my way through college. I worked up to forty or more hours per week along with taking almost a full course load. It was tiring but I was young and didn’t quite realize that. I probably averaged four hours sleep or less most nights. But, given the cost of most college educations today I’m not sure what I did is even possible anymore.

Getting back to the point of this post, sometimes all we need is a little help along the way. A little boost here, some encouraging words there, or maybe a few bucks to bring it all together. I am a firm believer that the best moral values in this country belong to us Midwesterners. We seem to have more empathy and less narcissism than most other regions of the country. We don’t, for the most part, strut around telling everyone how great we are. Instead we just put our nose to the wheel to make things happen. It is nice to see that this program of helping develop skilled workers is from a Minnesota company.

Sometimes it is necessary to look back in order to figure out how to go forward. This maybe is one of those times. If you can’t go out in the market to get the necessary skilled workers you just create them yourself.  I know there will be those who are afraid that once they put all the effort to make a skilled worker that they might end up going somewhere else, even a competitor.  But my Midwestern values say that many will be loyal to those who helped them get where they are.  Loyalty is another of those “old-fashioned” values that disappeared during the Reagan years but who says it can’t be resurrected again if some company or group takes the first step of valuing its workforce.