Want to know who's killing American jobs? An insider at the highest echelons of global industry just fingered the culprit. Even though his company's profits more than doubled, he was forced to close a factory and hang more American workers out to dry. Why? He failed to meet Wall Street's expectations.
At the same time Whirlpool closes its Ft. Smith Arkansas plant and dumps American workers, its third quarter profits more than doubled from $77 million to $177 million. Revenues rose as well, to $4.63 billion.
But that wasn't good enough for Wall Street, so 1,000 men and women who built Whirlpool into the world's largest appliance maker will see their jobs go to Mexico.
Whirlpool CEO Jeff Fettig used Wall Street's mind-numbing jargon to anaesthetize listeners to the deep wounds he was inflicting. Tearing out a factory that's been the heart of a community for 50 years was a "cost and capacity reduction initiative." American jobs weren't sent to Mexico -- they were "consolidated into current North American sites to leverage existing resources and capacity."
You or I might feel bad about axing people who've given so much to a company we run. We might express remorse, or even say 'thank you for your loyalty and hard work all these years.' Maybe that's why we don't dwell in the empyrean with CEOs like Fettig. He doesn't apologize for visiting economic destruction upon mortals. No, he is an uncompromising hero, "prepared to take the necessary actions," the executor of "aggressive plans ... the result of a comprehensive global review of our operations." Fettig doesn't see himself throwing people into the teeth of the worst economy in generations -- he's taking "necessary actions in order to expand our operating margins and improve our earnings." Fettig is using words like soft snow, as Orwell said, to blur the outlines and cover up rather than reveal the details of what he is doing.
Finally, though, Fettig did finger the masterminds behind it all. He admitted that he was an accessory to all the necessary actions and aggressive plans in order to "deliver long-term value to shareholders."
It's the shareholders that make Fettig and all the corporate executives do their dirty work. That's the doctrine of 'shareholder value' set forth in the gospel according to Jack Welch, handed down when he was CEO of GE: Management's sole duty is to deliver strong quarterly earnings report and increase the value of the company's stock for shareholders.
When you think of 'the shareholder' perhaps you see a lonely white-haired widow clutching her dividend check in the sitting room of some modest bungalow, antimacassar on the overstuffed sofa, faded needlepoint homilies adorning the walls, the vague yet unmistakable odor of superannuation in the air.
Think again. New York University economist Edward Wolff found 80% to 90% of stocks, bonds, trust funds, and business equity are concentrated in the hands of the top 10% wealthiest households.
When Welch's radical doctrine of shareholder value became the official dogma of The Street, taught in business schools, shouted from the pulpit of CNBC and reproduced in tracts by the financial press, we entered a new, more brutal phase of capitalism. Corporations no longer existed in the context of the public that chartered them to deliver products to customers, a livelihood to employees and improved value to the communities and country in which they operated. No, the corporations now exist solely to enrich their owners, the "shareholders," with no responsibility to the society that provides the cops and courts to protect them, the roads and ports to transport their products and feedstocks, and the schools to educate their workforce.
And the false gods of Mammon and Wall Street demand sacrifice.
A University of Arkansas economist says Whirlpool's 974 workers are just the beginning. In addition, about 500 workers at parts suppliers and other businesses connected to the plant will become jobless. All totaled, an annual loss of $57 million in wages.
Some of Whirlpool's payroll ended up in the tip pool at "Bob and Ellie's" 24-hour diner down the street from the factory. The waitresses and cooks there will be taking a hit in short order.
And so will schools and other public services when the $1.1 million in property taxes the company used to pay disappears.
Just as Fort Smith helped build Whirlpool, Whirlpool helped build Fort Smith. That's how it was supposed to work, and for almost 50 years it did. Now there's another whirlpool in Fort Smith, and it's pulling the town down.