Politicians misread focus of US business

 

IN the aftermath of the news of the Packard closure in Tallaght, Co Dublin, the Government was said to "hopeful" the parent company, Motors, would agree to part with site, free gratis, as a base for future Fianna Fail deputy leader, Ms Mary O'Rourke, called on General Motors to make a benevolent gesture to the area, and said it should set up "an ample fund" to assist the new task force. "After 21 years of blood, sweat and tears from a good workforce, one would expect at least this kind of financial gesture," she said.

An ATGWU official called on GM to "take some kind of responsibility" for the Packard workers. Completing the circle and demonstrating that Ireland simply does not have a party that is seriously right wing on the economy, the PD leader Ms Mary Harney asked the Government to secure a commitment from the company to make a "contribution" to Tallaght, including the possibility of donating the plant.

Well, maybe General Motors will do what is seen here as the decent thing. But, if so, it will be against the curve of experience, and the business culture in the US where "downsizing" and "globalisation" are the corporate slogans of the day, and the maximisation of profit is insisted upon regardless of social cost.

In the US, some 43 million jobs have been lost since 1979, touching nearly three quarters of Americans, and affecting 50 per cent more people than have been affected by crime. True, jobs have been created as well. But very few of those laid off have ended up in the same or in better paid work.

For the first time this century people no longer believe their children will have a better life than they have, and job in safety, stagnant wages, and pay cuts, are rampant among those still hanging in there.

Pay cuts, of course, suit every sort of company. Those doing badly use them to increase their competitiveness, and those doing well promote them to improve profits still further.

Lay offs and redundancies, meanwhile previously associated with economic recession, are occurring in the same large numbers during a recovery that has now lasted 5 years.

Even in companies that are turning in massive profits there is still more to bed made by replacing workers with technology, or taking off for the low wage, cheap tax, economies of Asia and, now, eastern Europe. When banks merge, shedding thousands of jobs, their share prices soar and, of course, part of the pay of the top managers is in options on those very shares.

Earlier this year the giant AT&T, one of the world's most successful companies announced it was sacking another 40,000 workers without so much as a word in advance to the company's largest union.

Managers are measured, and their "virility" rewarded, for their success in shedding workers to maximise profits. They know if they do not perform well enough, they will be the very first victims of the corporate takeover approved by their shareholders to get people that will.

Years of downsizing has provoked some resistance. Stakeholder theory, the" idea that workers, customers and the community in general might have a "stake" in the company and that it might" have a duty to more than just its owners has gained some ground.

With the strike weapon now a broken reed, unions are instead applying pressure on a company's customers and suppliers, and on government regulators through their politicians.

The New York Times recently ran a massive series called "The Downsizing of America". Republican presidential contender, Pat Buchanan, has put it on the political agenda and President Clinton has also questioned casting off workers against a backdrop of rising profits band in an economy healthier than it's been in decades.

However, in the home off capitalism the notion that a company might owe a duty to people other than its owners, has been slow to catch on.

It has been characterised as the New Socialism by critical commentators and there is little stomach in either major party for taking on Corporate America despite the obvious appeal to the middle class where job insecurity is now biting hardest.

Many argue that it is the price of modernising the economy, the price of being competitive, and that workers who are under productive at one company are, in classic market fashion, being "freed up" to work somewhere else. Shareholder, values where managers discharging their responsibility to owners by running their enterprises as profitably as possible, remain the dominant ones.

At any rate these are among the reasons why nobody should be surprised at what happened at Packard and why Tallaght should expect little other than expressions of polite sympathy from General Motors.