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Bob Franken

Bob Franken

Posted: February 16, 2010 09:33 AM

The Corporate Shell Game

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"Cut costs at all costs." If there is any holy gospel in the corporate world, that's it. The god of profits is worshiped by the high priests -- highly paid, by the way -- who endlessly chant "Cut costs at all costs," or words to that effect.

Their salvation through destruction is camouflaged in expressions like "Efficiencies" and "Synergies" and "Workforce Reductions" and "Belt Tightening" and "Outsourcing" and "Consolidations" and a big one, "Mergers," where companies get larger and smaller at the same time.

They exact a terrible human price for their greed every time they toss millions into the rubble with one layoff after another. In the process, their once-successful businesses are ground into failure as their product and reputation earned over decades are frittered away leaving empty shells.

The shell game is hardly unique to the US. It's played all over the world. The latest case in point is Toyota. It's still unclear when the auto manufacturer's legendary quality became a myth...a fiction that persisted as the reality of deterioration was obscured in the haze of image management.

"Bigger Bigger Bigger" became the Toyota plan instead of "Better Better Better." The company kept spreading out and spreading thin, until it reached the breaking point. "Breaking Point" means being found out, inevitably getting caught when shoddiness and deception can no longer be hidden and come crashing down on the carefully cultivated "brand"

As for the consumers, so many companies in effect tell them to "Like it or lump it." Their claims of support for customers are bogus.

The usual reply from executives is that they are acting on behalf of the stockholders. But as we so painfully learn, the stockholders get hosed too, sooner or later, usually sooner.

While "Cut Costs at All Costs" is the article of faith, it's not an absolute. There's no cost-cutting for those at the top, who stay there even as their operations crumble beneath them. And they continue to receive their millions in salary from the money they've squeezed out by choking the companies.

In the process, they have done serious damage to them, as well as the millions who depended on them for employment and the security of knowing they could pay for food and medical care and a roof over their heads.

Where no expense is spared is what it takes to keep Washington at bay. Spreading a few bucks around to all the willing politicians works wonders at keeping the United States from reordering corporate policy and regulation.

As for the shells of those one-proud businesses, it's on to new mergers, new cutbacks new layoffs. Finally, there's nothing left. It doesn't matter how big a hull is when it's empty. It's like the expression "Cut at all Costs" when there's nothing left to cut.

 

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