Nonprofit, nonpartisan journalism. Supported by readers.

Donate
Topics

Columnist: Job cuts by profitable, public companies are too often result of shortsighted groupthink

A Sunday must-read: Star Tribune columnist Neal St. Anthony raises an interesting question about where companies’ priorities should be in this economy. The story spotlights a New Hope manufacturer, Bellcomb Technologies.

A Sunday must-read: Star Tribune columnist Neal St. Anthony raises an interesting question about where companies’ priorities should be in this economy. The story spotlights a New Hope manufacturer, Bellcomb Technologies. The company has committed to avoiding layoffs at least until summer unless the company becomes unprofitable. St. Anthony contrasts Bellcomb’s courage with the responses from public giants like Target, Best Buy and Pentair, all of which are still very profitable but laying off workers nonetheless:

Public company executives usually confide that if they don’t reduce staff during lean times they will be punished by Wall Street and the big financial houses that rate their debt, recommend their stocks and otherwise look at quarterly profits as the Holy Grail.

I say, so what? It’s that same discredited gang at Merrill Lynch, Lehman Brothers, Citigroup and some other sullied titans (some now slopping at the public trough) who brought us the financial trauma of the last year. Why would a sensible, long-term-oriented CEO worry about a bunch of swanks on Wall Street? Answer: We’re still too short-term-driven. And too many CEOs will still slash jobs before cutting their own seven-figure compensation in the ultimate act of leadership.

Correction: The original version of this item incorrectly described Bellcomb’s sales. According to Bellcomb President David Hartwell: “Our sales are up but we are investing in automation and as a result will need less people but have committed to keeping them on for a while.”