How about if we move all of the suspected terrorists from Guantanamo Bay to regular federal prisons and convert the pens at Gitmo to a special prison for executives? The first inmates can be the boys from Enron, followed quickly by the fellows from Volkswagen and Hyundai. It would have to be a co-ed gulag in order to ship the Boeing folks there. Former execs from WorldCom, Tyco and from firms all up and down Wall Street would easily fill the available space. I am sure that all of the uproar and protest over inhumane treatment of prisoners would come to a halt. No organization would care how they were treated, including many of these people’s own families.
There are increasingly two distinct business communities in the world. There are the privately owned businesses dominated by smart, hard working managers with a great deal of character and integrity; then there is the cesspool of greed and corruption of the publicly traded firms. Unfortunately, most people only know of the second group. What passes for business news in the press revolves almost exclusively around Wall Street. When government officials contemplate business and economic matters, they gage the magnitude of a problem or the results of their decisions by the Dow Jones Average. The worst part of it is that the increasing public awareness of just how greedy and corrupt the leadership of the public business community is spills over to taint the conscientious people in the private community. Businesses in general, and manufacturers in particular, are viewed more and more as institutions without concern for employees, communities, the environment, or the well-being of the countries in which they operate, which is far from the truth in the vast majority of cases.
I would think that as someone makes more and more money, the drive for cash would start to ebb a bit, and other priorities – like family, for instance, or a desire to improve the community one calls home – should start to move up in the priority scheme. I would think that building something of lasting value, such as a business, a school, some community resource, or a church might seem like a good thing to do.
I cannot understand, then, how someone like Gary Rodkin would leave his job at Pepsi in New York, with its $2.28 million paycheck, and commute to the top job at ConAgra in Omaha, with it’s $3 million paycheck (plus the continuation of his old Pepsi salary as part of a severance package for a couple of years). The stated reason is that his children are in school in New York and he did not want to move them, but he promises to move to Omaha some day. If his family is so important, why take the job in Omaha and be gone from home five days a week? It seems to me that the man should either commit to Omaha, or not. He should either commit to his family and stay in New York, or move them to Omaha if they mean that much to him. How else can anyone interpret this but to believe that $2.28 million was not enough for him to elevate family or community up to the same level as cash in his priority scheme? How much does he need to make in order to decide that it is enough, and to make a commitment to his family and a community?
Jim Kilts ran Gillette in Boston, sold out to P&G in Cincinnati, worked for them there for a while, laid off north of 6,000 people and put $153 million in his pocket – all the while never moving from his home in Rye, New York. Exactly how is this supposed to be interpreted as anything other than pure, unadulterated personal greed? Is anyone in Boston, Cincinnati or employed by Gillette one iota better for Jim Kilts having been on this earth? Or is it just Jim Kilts who is better off, and a few folks on Wall Street who made out like bandits on the multi-billion dollar deal?
Every day in America there are families that face layoffs and downsizing, who decide to tighten up their belts, get a second job, learn to live on less, because the communities in which they live and the schools their kids attend are more important to them than the money they can make by relocating. That mentality seems to be completely foreign to the wheelers and dealers at the top of the Dow Jones feeding frenzy. It is almost certain that they cannot begin to appreciate how little respect the average American has for them.
It is nothing short of appalling to read the legacy of Jack Welch at General Electric. He is proud of his ‘alumni’ and watches like a proud father as dozens of former GE execs have moved on to run some of the biggest publicly traded companies. The business press carefully scrutinizes their performance to see how effectively they achieve Welch-like results at places like Home Depot, Allied Signal and Albertsons (on balance, it has not been very good). The most noteworthy element of this Welch legacy I see is a complete lack of loyalty to General Electric. Dozens of execs, all making north of a million a year jumping ship for more millions elsewhere? It speaks volumes about the value scheme and culture engendered at GE. But it should come as no surprise, except perhaps to thousands of loyal GE employees naively following leaders who see them and the company as nothing more than a springboard to personal riches.
The hallmark of Welch’s tenure at GE was a massive hollowing out of GE. "Every time we have an outsourcing forum, it’s like a GE and McKinsey alumni association meeting," says Sunil Mehta, vice-president of NASSCOM, India’s software industry association. Welch demonstrated no regard for GE employees, GE communities or GE customers. His loyalty was to himself and the investment community that made him fabulously wealthy. That he created a culture of executives ready to jump ship to the highest bidder and begin hollowing out their new employers should be expected. The common trait of these people is no commitment to their employer or their employees, and often an unwillingness to live even in the same town as the company they run. Some legacy there, Jack.
As Gary Rodkin soars over Sterling, Illinois in the corporate jet on his way to and from Nebraska to pick up his loot, I wonder what he sees when he looks down at the Wahl Clipper company – or at hundreds of other towns with hundreds of other similar companies. Can he possibly fathom Greg Wahl running the family business, just like generations of Wahls before him, struggling to maintain the 500 jobs that are the lifeblood of the city in which he was born and raised? Can he even fathom how it has never occurred to the Wahl family to sell the whole thing for a vast amount of money tomorrow and retire in luxury in any glamorous location they want, even though they easily could? Most likely he doesn’t even know they are there. If he thinks of them at all, I suspect he views them as GE alum Gary Wendt, who would not even discuss taking over Conesco unless they paid him a $45 million bonus, and who, while running GE Capital, looked with disdain at "the slugs making turbines and lightbulbs".
There are exceptions, in the public sector, of course, but they are fewer and farther between. The shame of the big corporate culture is that the 90% of global business that is good, decent, dedicated and goes about their job with character and hard work gets splattered by the Wall Street executive mud. If I could write one line in one blog post that gets picked up and spread throughout the media, it is this: Wall Street is a greedy and destructive freak show and not the heart of business in America or anywhere else; and 90% of America’s businesses would not pay minimum wage to a Jack Welch alum.