Wednesday, March 11, 2009

The cuts at The State and the new American business culture

The folks over at FITS News are in a virtual egasm over the layoffs at The State newspaper. You can check out their remarks at www.fitsnews.com. One would think they found another shot of Brittany Spears without underwear with the excitement and glee the FITS News folks are showing.

Forgive VUI for not being so gleeful. While not one member of the VUI staff thought soon to be ex-editorial page editor Brad Warthen was right on a good many issues, VUI did respect him. Mr. Warthen was not getting paid to espouse this or that opinion. He was getting paid to write his opinion on things. Mr. Warthen had no rich sugar daddy to make sure he got paid as long as certain opinions were espoused from time to time.

However, the layoff of Mr. Warthen and others bothers VUI on a deeper level. The State was one of the papers in his corporation to make money. Those people who lost their jobs recently at The State are part of a growing trend in American business. No longer can making money for the company keep one employed.

American business, especially American big business, has moved away from basic market principles like making a profit. Instead there is financial gamesmanship and politics based upon who has what college degree and who went to what college and who is of what gender or race. There is no sense of loyalty for years of doing a job well anymore.

Then there is how financial “gurus” are now making management decisions, especially in this short term credit crunch. The machine operator who has ran her job well for twenty years is likely among the first to be laid off because her wages are higher than the machine operator who has less experience, makes more mistakes, but is paid less. In the short term, it makes sense, with immediate reduced labor costs. In the long term, it is flat stupid, as the customers are likely to get frustrated with a poorer product and go elsewhere. That is why, for the bulk of American economic history, financial types were not the managers of businesses and did not make management calls.

That has changed. The people who brought you the great banking mess of last year have their brothers and sisters calling the shots at far too many big American businesses. They are joined by those politically correct types who worry less about who makes money and more about who has a MBA. There is no wonder China and India are kicking our business asses.

That is why VUI is not gleeful about the layoffs at The State. Sure, VUI disagreed with Brad Warthen more often than not. But, when a corporation fires people in a division of it that made a profit to help offset acceptable failure elsewhere, it just does not make business sense. It is just another example of how the American business culture has shifted from its old mantras of “the best man for the job,” or “make money for the company,” to the current hodgepodge of political correctness and financial gamesmanship. Unfortunately for American business, businesses around the world operate by the old American standard of making money and thinking long term. Thus, American businesses are getting their asses kicked.

If you do not believe that, think on this. Dave Thomas, the founder of Wendy’s, was a high school dropout. But he knew business. Thomas got his start in the Kentucky Fried Chicken company. Thomas managed franchises and amassed enough money to start his Wendy’s hamburger chain. In today’s American business climate, his lack of formal education would limit him to working the drive thru window. Bill Gates, the founder of Microsoft, could not even get an entry level job at most tech companies because he dropped out of college.

Such is the culture of modern American business. So, no, FITS News, there is not one thing to be happy about when a paper that made money for its company has to lay off people. It is just another symptom of how wrongheaded American business has become.

3 comments:

  1. your old school business approach does not fit the times.

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  2. I think the name of the game is short-term profit and revenue growth, not long term sustainability. This is where East Asia will beat us - they think in generations while we think in quarters.

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  3. Well said, VUI. I can only imagine the frustration at losing your job while working for a company that's still turning a profit, as The State is.

    And it's one thing to express glee at an adversary's departure if that individual is relocating, taking on new duties or retiring, but to fire off pot shots when they've been laid off seems awful petty.

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