Jobs vanishing, perks should vanish too
In this, the lame duck year of the lame brained George Bush, job losses continue to be staggering. From January through the end of August, 605,000 Americans were thrown out of work. Collaterally, 1.2 million homes were foreclosed in the second quarter and another 2.9 million people are behind in their mortgage payments. Closer to home, it was not a banner week for Forsyth County. First, Dell announced that it might be closing its new plant, which could put 1,150 people out of work. Then a few days later, RJ Reynolds announced that it was cutting 570 jobs. The news was bad, but it was also a reminder of the differences between the two corporations. Reynolds helped to build Winston- Salem, and was the driving force in the city’s economy for a century. Despite the controversy over the dangers of smoking and charges that the tobacco industry lied to Congress and to its customers regarding deliberately high nicotine levels, Reynolds has remained a stalwart supporter of all things community. I am proud to be a graduate of RJ Reynolds High School, particularly because of bragging rights to Reynolds Auditorium, a true showplace of the South, and where I spent countless hours involved in one kind of production or another. It is possible that a high school could have been built without Reynolds money, but it wouldn’t have been as impressive. And without Reynolds, there would have never been an auditorium of such grandeur, or one that served as a cultural mecca for the region. Reynolds has also been active in supporting nearly every local charity imaginable, including the United Way, for which Reynolds CEO Susan Ivey is a former chairperson.
And so it came as no surprise to me that when market conditions forced cutbacks, Reynolds showed lots of class and genuine concern for the affected employees. Most took early retirement and will enjoy full benefits. Others were displaced, but take with them financial compensation and a resume that will make them desireable in the global marketplace. Contrast that with the likes of Dell, Skybus and Hanesbrands. My criticism of the Hanesbrands is well documented but, suffice to say, its corporate conscience is nearly non existent. CEO Richard Noll laid off some 14,000 people, cut out medical benefits for retirees and transferred American jobs overseas, where he pays slave wages to people making products that he will ship back into the United States and turn a huge profit which supports his $8 million salary. Skybus and Dell, meanwhile, fall into a category of corporate behavior almost as scurrilous. Skybus flimflammed state and local officials and had everyone scrambling to dole out various perks and incentives, only to watch the airline fold and leave customers stranded with no explanation. And then there’s Dell. If coercion and flimflamming were high crimes, then Gov. Mike Easley and the Dell gang would already be behind bars. Dell persuaded Easley and Forsyth officials into giving up over $300 million worth of incentives, or else the computer assembly plant would locate in Virginia. Later it was revealed that the Old Dominion was only prepared to offer about one tenth of what North Carolina put on the table. And Easley herded the questionable package through the legislature before anyone had a chance to study the fine print, which would allow Dell to lay off as much as half of their workforce and still retain the incentives. It also allowed the computer maker to close its doors and still retain half the perks so long as they didn’t boot down before 2010. Well, guess what? Dell signaled last week that it might have to close its doors in “2010.” That wasn’t a coincidence. Judge Robert Orr saw this coming. So did a few of us in the media. Orr claimed that the deal was illegal, and he challenged it in court. I, on the other hand, simply objected to perk packages for Dell and Skybus on purely logical grounds. If a new plant or a new venture is going to be so profitable, then taxpayers shouldn’t have to subsidize the company in advance. The company should be willing to put up their own money rather than take ours. Those of us who railed against Dell and Skybus were criticized for being negative and for not understanding that sweetheart deals create jobs. Newsflash: Unethical companies who extort taxpayer perks and then vanish don’t add viable jobs to our economy. They add what amount to temporary jobs that vanish before our very eyes. To their credit (and to my knowledge) Reynolds is not eliminating jobs here just so they can ship those jobs overseas and fatten the salaries of executives. Reynolds is a victim of market conditions and, to be fair, the dangers of their own product, which led to a decrease in smoking. Still, the company never asked the community for a handout in order to construct the Reynolds building. To the contrary, Reynolds was and still is committed to community service, giving generously of their time, talents and money. Job losses and plant closings are never easy on a community, but if they have to occur, we should be grateful that at least one company knows how to achieve the transition with class and compassion. The National Governors Association needs to step up with a moratorium on all incentives, and make each member-state stick to the agreement. In the meantime, if incentives are still the norm, then cities and counties should re-direct perks to existing industries with proven track records, and which could use the public monies to grow their already-stable workforce. Please, no more perks for companies teasing us with relocation. Let them build here at their own expense, prove themselves as good corporate citizens and then, after five years, allow them to ask for a little public help that might result in the creation of more jobs. If we had taken the money and perks promised to Dell and Skybus alone and given them to Reynolds, I bet that Susan Ivey could have used those hundreds of millions of dollars to develop a subsidiary business, or invest in a spin-off/start-up (not unlike the boost of valuable patents that Reynolds gave to Targacept). Either scenario could have protected or transferred some of the jobs that were recently eliminated. Real, lasting job growth comes mainly from established companies (large and small) whose leaders have ties and a commitment to the community. It’s time to start rolling the dice with existing industry instead of crapping out with carpetbaggers.
Jim Longworth is the host of “Triad Today,” airing on Fridays at 6:30 a.m. on ABC 45 (cable channel 7) and Sundays at 10 p.m. on WMYV (cable channel 15).