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Editor, The Konformist
http://www.konformist.com
The Republican layoff conspiracy
By Kevin J. Shay
Online Journal Contributing Writer
February 21, 2002—Lost in the excitement last year over Enron and the
purported War on Terrorism was this fact: 2001 was the worst year for
workers since the early Reagan years.
The ranks of the unemployed grew by 2.6 million last year, the most
since 1982, according to the U.S. Department of Labor. Most of those
new former laborers collecting unemployment were laid off—estimates
on the number of layoffs in 2001 ranged from 1.8 million to 2.5
million.
I was one of those 2 million or so layoff victims. I had worked as a
reporter and editor for Dallas-area newspapers owned by Texas-based
Belo Corp. for the previous nine-and-a-half years. My last position
was as a business reporter for The Dallas Morning News. Remaining
unconvinced that my company was doing as poorly as management said, I
have conducted some research into the finances of Belo and other
companies that made some major layoffs in 2001.
My findings may not surprise you: Half of 30 companies picked at
random that made layoffs of at least 1,000 workers last year made
money. And only one of those 15 that lost funds in 2001 showed a loss
the previous year. Most of the firms made good money. For example,
New York-based financial firm Citigroup Inc. announced it would slash
7,800 jobs last November, then went on to record a whopping $14.1
billion in profit in 2001. That came on top of making $13.5 billion
in 2000 and $9.9 billion in 1999. Why did Citigroup need to cut
almost 8,000 employees when it made so much and paid its chief
executive, Sanford Weill, an obscene $225 million in 2000? Weill has
a history of leaving a trail of layoffs that help boost his pay.
Between 1987 and 1997, when he was CEO of Travelers Insurance, which
merged with Citibank to form Citigroup, Weill cut jobs by one-third
and became one of the highest paid chief executives in the country.
Another company that made off well last year while cutting people was
the New York Times Co., which said it would send 1,260 workers to the
unemployment lines last June. The Times Co. made $444.7 million in
2001, after hauling in $397.5 million in 2000 and $310.2 million in
1999. Other companies I researched—including IBM, Verizon, WorldCom,
Dell, Hewlett-Packard, American Express, Bristol-Myers, Sara Lee, VF
Corp., Wachovia Corp., and Proctor & Gamble—took in similar nice
profits before and after the layoffs.
So what's going on here? You can't blame all these layoffs on
September 11—about 63 percent of job cuts tracked last year by the
Labor Department came before that date. And you obviously can't blame
declining profits in many cases. Is there some kind of campaign by
executives, who were complaining about not having enough qualified
employees throughout much of the 1990s, to make good employees stay
longer and reduce wages and benefits through increased layoffs? In
effect, are corporate bigwigs taking it on themselves to turn the
employees' job market of much of the last decade back into an
employers' market? Or is it just plain old greed, in which
shareholders who care more about increased profits than the overall
welfare of the company and its employees, not to mention the costs of
job cuts to society, are demanding these layoffs? Where's Oliver
Stone when you need him?
As you might guess, this layoff conspiracy leads directly to the
White House. Remember what Bush and Cheney did in December 2000 as
soon as they had stolen—er, been appointed to—the presidency? Cheney,
a former corporate bigwig himself, went on major television programs
and talked about how bad the economy was, blaming it on Clinton, when
most real economists agreed it was not that bad—yet. Bush, a failed
corporate smallwig who could only make money through a questionable
stock transaction with Harken Energy and as part owner of the Texas
Rangers baseball team by convincing taxpayers to fund most of a new
stadium, talked the economy down in his own way in front of crowds of
supporters and in one-on-one meetings with reporters. Bush's handlers
wouldn't let him go on TV and actually answer a question more complex
than "How's your golf game?" Their aim was to blame the impending
recession on the Clinton administration, and to pay back their huge
campaign contributors, many of whom were these same corporate
executives who complained before about not having enough qualified
employees, by aiding the return of an employers' market.
For example, Ivan Seidenberg, president of Verizon Communications,
the $67 billion telecommunications giant formed by the union of Bell
Atlantic and GTE, gave $1,000 to Bush's campaign, the legal limit for
an individual. His company contributed $818,000 to Republican Party
committees and $3 million to the 2000 Republican National Convention.
Verizon was one of the first firms to lay off workers last year,
cutting 10,000 jobs. The company ended up making $590 million in
2001, after hauling in an astronomical $11.8 billion in 2000. That
year, Seidenberg amassed $15.7 million in salary alone.
Other company executives gave even more to the GOP. Cisco Systems
President John Chambers donated $280,000 by himself to Republican
committees in 2000, the same year he made $157 million. Cisco laid
off 8,500 people last year after making $2.7 million in 2000. The
firm did lose $1 billion in 2001, but it made up about 40 percent of
that loss in the first three months of its 2002 fiscal year.
Then there is Cheney's former firm, Dallas-based Halliburton Co.,
which is vying to become the next Enron and will more than likely
announce some major layoffs soon. Halliburton's stock dropped to $16
a share on Feb. 19 after reaching $49.25 nine months before. The
freefall was blamed largely on multimillion-dollar asbestos court
verdicts. Pittsburgh-based Harbison-Walker Refractories Co., a former
subsidiary of Dresser Industries, which Halliburton bought in 1998,
has already filed for bankruptcy. Will Halliburton be next? And is
this part of the reason why Cheney is pushing so hard for legislation
that will benefit his former employer, such as drilling for oil on
protected federal lands like in Alaska? When Cheney left in 2000 as
CEO of Halliburton, a position he held since 1995, he sold his stock
for more than $40 a share. He personally pocketed more than $33
million in 2000 from Halliburton. You don't think Cheney remembers
that deal? Cheney presided over several rounds of job cuts, including
of about 11,000 workers in 1999, a year that Halliburton showed a
$438 million profit. Since those layoffs, Halliburton's profits have
risen, to $501 million in 2000 and $809 million in 2001. An
interesting sidebit to this story is that Houston-based Kellogg Brown
& Root, another Halliburton offshoot, recently agreed to pay the U.S.
government $2 million to settle allegations it defrauded the military
by submitting false claims for delivery orders between 1994 and 1998.
So here you have Cheney trying to at least indirectly help his former
company, which is possibly preparing to lay off more workers, through
friendly legislation as one of its subsidiaries reportedly defrauds
all of us. [And yes, Cheney still lived in the Dallas area until
after the November 2000 election in apparent violation of the 12th
Amendment to the U.S. Constitution. He didn't sell his Dallas-area
mansion to a major Republican donor until Nov. 30, 2000, according to
deed records. Through a local television station's camera, I saw
Cheney stroll out of his Dallas-area home late at night after Nov. 7,
2000. Contrary to Republican spin, Cheney never was a resident of
Wyoming in 2000.]
Company executives and their apologists will tell you they "need" to
lay off workers—even when the firm is making boatloads of money—to
remain competitive in today's market. Don't buy that bull. In the
increasingly merger-friendly environment, competition for many large
megacorporations is not much of an issue. The main issue for many
shareholders is to acquire as much capital and return on investment
as possible. For these multimillionaires and billionaires, money is
only a way to keep score, not a basic necessity that can mean the
difference between eating and not eating. And they only feel good
when that score is going up, even if it is at the expense of a person
making $20,000 or $30,000 a year. Most really liked Bush's tax cut
plan last year, which netted the super wealthy millions of additional
dollars. The wealthiest 1 percent of Americans already own about 40
percent of the wealth, and that is only expected to grow under the
current so-called "Christian" administration [idle thought: would
Christ really support this administration that cares primarily about
the wealthy and those who want to be wealthy in monetary terms?].
So what do we do about this situation? We stage a nonviolent revolt.
We organize politically. We educate people on companies that practice
alternatives to layoffs like reducing hours—Phil Hyde of
Timesizing.com highlights numerous good examples. We educate people
on studies that show layoffs actually hurt companies' profits due to
lower morale, a loss of momentum, and other factors.
We support unions, even though they are not perfect themselves but
are better than nothing. We demonstrate. We go on strike. We file
employment discrimination claims with government agencies when we are
laid off—I have a claim pending against Belo myself. In short, we do
whatever we can to make the bigwigs feel our pain and perhaps think
twice about laying us off just to make a few more bucks in the future.
In my daydreams, I see myself taking a page from Michael Moore, the
populist film maker of Roger and Me who dogged former General Motors
Chairman Roger Smith after GM closed plants and laid off thousands of
workers in Moore's native town of Flint, Mich., in the 1980s, despite
GM continuing to make billions in profits. I see myself bursting into
Belo shareholders' meetings and firing questions about the layoffs at
stunned executives. My wife, Michelle, even recently had an actual
nocturnal dream about her and me and others doing just that at some
Belo meeting and causing a big stink—things are really getting weird
when your spouse has dreams about your former workplace. In her wild
dream, Bush happened to be there and offered to help place a story I
wrote in a national newspaper or magazine. I turned down Bush's help
on principle, figuratively telling him to shove it before I walked
off. It was only a dream, but the scenario sounds good to me.
Some say we shouldn't concern ourselves with this layoff conspiracy
because executives like Smith and Weill and Seidenberg and Chambers—
as well as their political conspirators like Bush and Cheney—will get
their just desserts in their afterlives. Some believe the corporate
and political masters will be sent to Hell—wherever the hell that is—
to live in eternal damnation, if they aren't there already. Others
say they will have to reincarnate to the Earth as low-level workers
and see what it's like to live paycheck to paycheck for themselves.
I don't know about those theories. But I do believe that one day in
the near future, such executives and politicians will be forced to
search the vacuous depths of their souls, and answer to themselves
and to a Higher Authority.
And then, perhaps there will be hell to pay. Maybe through their
redemption, the rest of us will benefit. Maybe not. All I know is we
have to keep fighting, right here, right now.
Kevin J. Shay is the author of the electronic booklet, No More
Layoffs: How to Work For a Workplace That Works For All of Us. He
also started a new Internet site, LayoffWatch, that tracks layoffs
and the profits of these companies at
http://www.angelfire.com/biz/shaybiz/layoff.html. Shay can be
contacted through email at [EMAIL PROTECTED]
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