Article 43

 

Friday, October 14, 2005

A Corporate Elitist Speaks

Lou Dobbs Tonight
October 13, 2005

Transcript

Tonight there is new evidence that U.S. corporate elitists are increasingly out of touch with and openly disdainful of their American workers. American workers, the backbone of our middle class and our nation. But corporate executives are increasingly punishing and decimating their workforce as they unfairly reward themselves. Christine Romans reports.

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): The day of the American CEO caring about the rank and file worker is over.

STEVE MILLER, CHAIRMAN & CEO, DELPHI: We are in a market for human capital, supply and demand. If you pay too much for a particular class of employees, you go broke.

ROMANS: That particular class of employees, Americans. And the man disparaging them is the CEO of bankrupt auto parts maker Delphi. Despite rushing into cheap foreign labor markets, its business model failed. Now, his turnaround plan forces union workers to take a 63 percent pay cut, while his management workforce gets raises.

MILLER: There is a market for manufacturing labor, and we are paying triple for that labor. And there is a market for executives, and we are underpaying for it, and we are at risk of losing our management.

ROMANS: As he puts it, “American workers are paid too much and management too little.”

MILLER: Philosophers can speculate about fairness. I have to deal with reality.

ROMANS: Not all businessmen agree.

JACK DAVIS, I SQUARED R ELEMENT COMPANY: He’s not alone. He’s just one of the many that feel that they can just discard American workers and go to China and hire them for cents an hour. It’s completely wrong.

ROMANS: And Jack Davis, a business owner who entered politics because he thought corporate America is misguided, pays his workers $25 an hour and does not outsource. He calls the prevailing attitude in corporate America dangerous.

DAVIS: They’re destroying their people that will be buying their product. It’s so short-sighted, it’s just terrible.

ROMANS: Indeed, the chasm grows between American works and management elite.

THOMAS DONALDSON, ETHICS PROFESSOR, WHARTON: Lifetime employment or anything like it is just an unrealizable goal at this point. But it doesn’t follow from that that workers should be regarded as mere tools for the production of corporate profits.

(END VIDEOTAPE)

ROMANS: You know, it once was companies used profits to reinvest in their communities. Not anymore. President Bush signed the American Jobs Creation Act last year to give companies a big tax break on their foreign income, that $200 billion boon to multinational companies. They’re not—they’re not growing jobs in this country with that money…

DOBBS: Oh, no.

ROMANS: ... they’re buying back stock and they’re using it for their regular…

DOBBS: I’m shocked. I’m absolutely shocked.

ROMANS: That’s right.

DOBBS: I’ve got to tell you, we asked Steve Miller to join us on this broadcast, the CEO. Steve Miller made all of those sweeping very profound statements about his workers, American workers, having been on the job for three months. Now, as a CEO, I would like to understand how he can figure out how to lead that company and make those kinds of determinations in 90 days. He must be a very smart man, capable of disguising it brilliantly.

ROMANS: It’s interesting, because a lot of the critic and the ethics professors, Lou, they tell us that just swapping out labor, if that’s your only idea for saving a company, just replacing labor, that’s not good management.

DOBBS: It’s not good management. It’s simpleminded. He needn’t have gone to business school or bothered to have a career in business at all. If his sole outlook is to blame workers for the mismanagement of Delphi over the course of - well, for at least 10 years, I mean, it’s insane.

ROMANS: He also says he’s concerned about health care costs, and he says he’ll be spending a fair amount of time in Washington trying to work out that problem as well.

DOBBS: Well, maybe what Mr. Miller ought to consider, and maybe the shareholders of Delphi should consider, is if he is such a proponent of outsourcing and blaming the American workers for the ills of that company - by the way, JT Battenberg, the former CEO who managed to drive the company into bankruptcy, stood before a group of executives, CEOs, telling me that his outsourcing plans, his offshoring plans, building all his production in China was going to be the next big strategy for Delphi, just about a year and a half before the company was in bankruptcy.

And he wants to—there’s a shortage of management? There’s a shortage of good management at Delphi. Why does he want to keep people that drove the company into that mess?

ROMANS: A very good question. He says that there are head hunters that are lurking around all of his management, and he’s got to pay them better to make them lead this company through to the next - the next level. My question is, why are there head hunters lurking around people, trying to get new jobs for people who presided over a company that is now bankrupt?

(In some cases bankruptcy may be intentional - so management can vote themselves a GOLDEN PARACHUTE and make money off it.)

DOBBS: I think there’s a simple word, it’s incestuous and insular. And these brilliant U.S. multinationals have managed to help this country run up a - this year - an anticipated $700 billion deficit.

The Chinese are beating our brains out. We should be, according to Mr. Miller’s lights, looking to the Chinese for our CEOs, not some fellow who does about a two-year tenure at a bunch of turnaround opportunities.

Thank you very much. That’s is a disgusting story. I mean, that really just - that one annoys me more than a little. Thank you. 

Posted by Elvis on 10/14/05 •
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