President Obama, don't allow CEOs to treat people like dead wood!
First of all congratulations! Truly a mission accomplished and job well done. You have undeferred the dreams of many.
But I am concerned about your stimulus package and approach to big business. So here goes:
You met the other day with some CEOs of large companies and said afterward, “These are the guys who make things.” I wonder if this is a good attitude to take re: CEOs. For the most part what CEOs try to make is good numbers in the current quarter. This has been true for a long time and is still true in this crisis. Nothing wrong with this unless it detracts from the design and production of the goods and services that the company is charged with making and/or if it detracts from making the investments in the future that company should be making. And sometimes — often — it does.
So here is my concern: please do not support companies who will take bailout money and still layoff people that they could afford to keep. US companies have long treated people as a disposable resource. Many companies do not try to keep people as an investment during hard times, instead they look for times when layoffs appear to be justified. Then they get rid of lots of people knowing they can rehire when they need to.
I know you are aware that CEOs also work very hard to protect their incomes and have gotten very good at it. In many cases the millions paid to top executives could have been used to avoid many layoffs. This attitude toward personal wealth and luxury as a necessity for top executives is a cancerous growth that has long ago metastasized.
So please question the CEOs you meet with closely: ask them if they are doing everything they can to keep as many people as possible. Ask them how important avoiding layoffs is to them. If they can’t answer you looking directly into your eyes, question them further (do it any way, many of them are excellent liars). I believe any bailout money should be given on two conditions: 1, executive pay will be reasonable and under control — no golden parachutes, and 2, that avoiding layoffs will be a top priority.
Watch out for companies who say they must lay people off. Some of them are taking advantage of a bad situation. In an economy where people expect bad news most people are not surprised to hear of layoffs or when they are laid off themselves. There are CEOs and other executives who are quite capable of taking advantage of this situation so, President Obama –
Please be aware and awake!
Many thanks for your hard work and your honest, intelligent approach to government. You are a blessing to the nation and world.
Frank Winters
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January 29, 2009 at 1:32 pm
Debbie
CEO’s don’t make things; they manage corporations that make things or service people. Management is a totally different skill set. The job of a corporation is to make money for shareholders. This isn’t necessarily a bad thing.
From a business perspective, it’s an arguable point whether people should be considered an investment or a resource. I have a joint undergrad degree in Human Resources (think about THAT name, if you will) and Personal/Employee Relations, so I know all the theory. But truthfully, employees cause as many problems as they solve! Employees are a two-edged sword. Companies used to invest in their people, but people also used to invest in the companies for which they worked. This is not the case anymore, so it cuts both ways. Again, I see pros and cons in both ways.
Sure, CEO’s protect their incomes. Don’t we all? They are only people and should be expected to act in their own self-interest, as all people do. So don’t ask CEO’s any of those questions – just look at how they are incentivized – that’s how they will act. If you – if WE, the people! – choose to give bail-out money with no incentives for different behavior, the behavior will not change.
Bailouts are a bad idea. People and companies need failure to learn and grow. Failure causes CHANGE. When it hurts, we change our behavior, our actions – and sometimes not until it hurts do we change. We are all so afraid of change, but change is inevitable, and it can be GOOD.
January 29, 2009 at 2:03 pm
frankwinters
Hi Debbie,
You wrote “The job of a corporation is to make money for shareholders.”
I question this. I know it has become canonical but I think it is the notion at the heart of the American contribution to the economic crisis. Corporations are in business to create a good or service and to provide a work environment for people. If they do these things well, there is money to be made and that’s why investors invest. But in the last 20 years or so the investors have become the primary or only reason for a corporation to exist. This has lead to extreme short sightedness, and abuses of many kinds.
And CEOs don’t just protect their incomes they horde a much higher % of the company treasure than at any time in recent history (ancient times not included).
Of course people are problematic but it is management’s job to solve those problems. Without people there would be no money generating corporations.
Bailouts are bad? Yes, I agree. I think Obama should figure out how to pay companies for work products rather than bail them out. But I think that’s another blog post!
Thanks for your comment BTW,
Frank
February 4, 2009 at 11:17 pm
smokeybones
Frank agree with you comments. I voted for Obama and hope he changes many things. But like u I am worried about the stimulus package and the CEO’s of the bailed our banks.
take care partner. Smokeybones
Making money for shareholders is ok for banks that HAVE NOT BEEN GIVEN OUR Money! They are now beholden to us (we the people)