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Monday, November 19, 2012

Corporate Hissy-Fits
Posted by Jill | 2:57 PM
Funny, isn't it, how we're supposed to worship America's business leaders as "makers", while the rest of us are mere "takers." There's an assumption, fueled by an appallingly larger proportion of the American public that is stuck in Teenage Boy gear than we thought, that those who head companies are somehow better, stronger, smarter, and harder working than the rest of us.

I don't know about you, but when I get home from yet another 11 hour day after sitting in traffic for an hour and a half because a cop pulled someone over near Squirrelwood Road on Route 80 and it's backed up all the way to Denville, it's hard for me to imagine that Donald Trump or Papa John's John Schnatter or Hostess' Gregory F. Rayburn works all that much harder than I do. And when one of the products I've worked on goes out to market, I can even say that I had a role, however small, in increasing my employer's revenue.

And yet still, I'm regarded as a taker.

Well, if that's the case, I'd rather be a taker than be one of the overgrown four-year-olds who seem to be running businesses in this country. I don't know when business ceased to be for risk-takers and daredevils and became something that should be as sure a thing as Mommy tucking a four-year-old into bed at night. But that's where we are right now.

Because I am taking some rare time off this week (which really consists of working two hours a day and addressing any e-mail concerns around trying to get caught up with some of the housework that doesn't get done the rest of the time), I was treated this morning to Steve Rattner on Morning Schmoe opining that corporate managers are not investing in their businesses because they lack "certainty." There always seems to be something else to make these guys "uncertain." A month ago they were uncertain because of the election. Now they're uncertain because either their taxes will be raised or there will be austerity, which will push the country into a new recession and no one will spend any money. I don't know what will make these guys ever have the "certainty" they insist they need in order to invest, and presumably, hire people.

It is this pathological need for certainty in the business community that is preventing our economy from recovering. Business is never certain, and yet we see over and over again a paralysis in companies from the smallest machine shop to the largest multinational corporation -- all because they want a certainty that has never once in our history existed.

Yesterday, Thomas Friedman wrote in the New York Times of a woman who runs a sheet metal company in Stacy, Minnesota. She is wondering why she can't find people who have advanced scientific background in addition to welding experience -- who will work for the princely sum of $20/hour ($40K/year) plus benefits. You can't support a family and send your kids to college on $40 grand a year, folks. And yet, this woman wants people who are ready to go, in her shop, with her equipment and processes, right out of the gate.

True story: A friend who recently started a short-term tech support contract asked on his first day what the administrator password on the server was. The response? "Why don't you know? You're the tech guy."

In 1990 I was the administrative assistant in an IT department. When an entry-level programming job came up, I was allowed to take that job and was sent for training. I had already taken enough computer science classes to know enough about basic programming concepts that I could handle the job. I received training for the tool they used, and SQL training. Since then, I've been able to teach myself a number of tools and languages even prior to walking in the door. By the time I went to Visual Basic training class, I'd already taught myself out of a book. By the time I went to Cold Fusion training, I'd already taught myself out of a book. But these companies sent me for training, even though one of them had less than twenty employees and the other was associated with a state agency. I now work in a highly regulated agency, and all kinds of training, both in-house and externally, are always available. I'm lucky in that sense; my employer will still train people with qualified experience on the specific tools and processes they need. Without companies willing to train, I might never have been employed anywhere, at any level. Even an administrative assistant in advertising doesn't know everything she might need to know to work in book publishing, or in financial information.

Even if companies use a widget-maker than no one else in the industry uses, they want someone who is ready to go right out of the gate. And then they complain that they can't find anyone.

It's just all too uncertain. So they don't hire.

The latest example of corporate paralysis is even more toxic, however. It is taking the form of corporate revenge against one's own employees. How can you ever have any kind of functional employer/employee relationship when the company is run by threats against you for things you don't even control? Here are some examples of toxic tantrums that have already been thrown by executives simply because a man whose pigmentation they regard as unseemly was elected to a second term:

John Metz, restaurant franchisee:
John Metz, a Florida businessman who controls multiple Dairy Queen, Denny's, and Hurricane Bar & Grill locations, has made great progress in Asshole Business Owner Science. Simply reducing employee hours? Raising prices? Not enough. The employees themselves must feel the pain. HuffPo's Janean Chun reports:

John Metz said he will add a 5 percent surcharge to customers' bills to offset what he said are the increased costs of Obamacare, along with reducing his employees' hours.

"If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, customers have two choices. They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare," Metz told The Huffington Post.

Asshole Boss John Metz, quite brilliantly, will actively encourage customers to tip less in order to make up for the costs of Obamacare that he is passing on to them! And Metz expresses hope that his plan will "inspire employees rather than alienate them."

Welch-Allyn, invoking the "U" word:
The cuts are part of the medical device maker's plans to reshape its business in the wake of turmoil in the U.S. market and expand into emerging global markets, Chief Executive Steve Meyer said this afternoon. The changes are needed "to really get Welch Allyn able to compete on a global scale," he said. Welch Allyn is a privately held company that does not release its sales and earnings to the public.


The uncertainty surrounding the future of the Obama health care package is creating turmoil in the domestic market, Meyer said. Hospitals and doctor offices aren't investing in new equipment until they see how the health care issues will play out, Meyer said.

Zane Tankel, CEO, Applebee's:
“We’ve calculated it will [cost] some millions of dollars across our system. So what does that say — that says we won’t build more restaurants. We won’t hire more people. If you have 40 or 50 employees at a restaurant, and the penalty is $2,000, and you’re going to pay $80,000 or $100,000 penalty, there goes the profit in your restaurant. I want to simply say we are looking at it, we are evaluating. If it’s possible to do without cutting people back, I am delighted to do it, but that also rolls back expansion, it rolls back hiring more people, and in a best-case scenario, we only shrink the labor force minimally. Best case.” Read more at http://www.inquisitr.com/394524/applebees-ceo-announces-hiring-freeze-and-layoffs-over-obamacare-boycott-threatened/#SQLfjyulK2ZiG8XT.99

The list goes on and on.

Meanwhile, the guys who were hired to "rescue" Hostess and instead ran it into the ground again, stand to cash in to a cool 75% of their alrady-exorbitant pay packages to stick around long enough to wind down the business. The linked story also says that yet another private equity firm is looking to purchase the rotting corpse of the company to pick the last bit of meat off the bones.

Vulture capitalism and the reward of executives who ruin companies seems to be the ONLY "certainty" in American business.

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Blogger Androcass said...
Excellent post (as usual), albeit depressing. My take is that this kind of "uncertainty" scare-mongering comes from the risk-management techniques that were pioneered in the financial side of business. These tactics, which came of age in the 50s and 60s, allowed companies to control their risk and have a predictable flow of cash.

And that worked so well that the chieftains figured they could apply the same thinking to every other part of the business. "Don't train someone who might take that knowledge and leave, shove the risk for that training back onto the employee."

That attitude has pervaded the thinking to such a degree that CEOs figure that by whining about risk, the world will take all of it away. So we see these public-private partnerships in which companies give a few old machines to a community college and allow the school to set up a curriculum, the student to pay tuition (or go into debt), government to spread some money over the whole endeavor, and the company "may" hire some of the graduates.

We've forgotten that the CEO's job is, primarily, the mastering of risk - that's what they're paid to do. Instead, they take their PR-massaged message to the media, which dutifully copies down their "concerns," we the people crank up another round of corporate welfare, and these people buy another vacation home ("Let's get one in a warm place this time, honey").

Blogger jurassicpork said...
Hey, corporate sodomy's hard work.