CEO Rolls Up Sleeves, Talks Of Layoffs. Gregory Freeman, 10/13/1995

Headline: CEO ROLLS UP SLEEVES, TALKS OF LAYOFFS
Reporter: By Gregory Freeman

Publication: ST. LOUIS POST-DISPATCH
Last Printed: Fri., Oct. 13, 1995
Section: WAR PAGE, Page: 17C, Edition: FIVE STAR LIFT

BOB SHAPIRO IS a shirt-sleeves kind of a guy.
   That was my first impression when I met him for lunch in the employee cafeteria of Monsanto earlier this week. Shapiro's the chief executive officer of Monsanto.
   I've met a few CEOs in my time as a journalist. Some of them are quite stuffy, some to the point of being pompous.
   Not Shapiro. I found the guy to be down-to-earth, warm, genuine and thoughtful.

What brought the two of us together this week was a column I wrote a couple of months ago, wondering if companies really cared about the little guy anymore.
   There was a time, I pointed out, when people could expect that if they worked hard and were loyal to a company, that company would respond in kind and be as loyal to its employees.
   That's changed, I said.
   Companies today seem to be ruthless. Their only concern seems to be profit, at all costs.

Now, I'm not against profit. Without it, we'd all be a lot worse off than we are now.
   But I think there's no excuse for companies to do such things as announce layoffs and let employees go immediately. I've seen instances where businesses have announced layoffs ("downsizing" is the term they like to use), and people who have worked 20 and 30 years for the same company are told they have a day to pack their things and go.
   In writing that column, I quoted from randomly selected stories about layoffs that had run in the Post-Dispatch. One of the stories dealt with a layoff by Monsanto of 200 employees in St. Louis and Chicago.
   That prompted Shapiro's call to me.

This week we met in Monsanto's tony lobby, and he escorted me to his office.
   He was honest about his feelings.
   "I thought the reference to Monsanto was unfair, " he said. I explained that his company's mention in the column was mere happenstance.
   But he thought that there was more to Monsanto's layoffs than I had known.
   Although his company had experienced layoffs, Monsanto tried to take care of the employees it laid off. They weren't given two weeks' pay and kicked out the door, he said. Instead, he said, they were treated with respect; the company tried to help them find other jobs and offered them decent severance packages.
   He went on to explain that while news organizations report layoffs - because the announcements always come abruptly - they usually don't report when companies hire, because that's done more slowly. At times, Shapiro said, companies will lay off employees in one area while increasing the number of employees in another area.
   Shapiro said that CEOs weren't cruel, heartless people who announce layoffs with wild abandon. He said he's found such decisions to be difficult ones but necessary ones for companies that need to compete.

In short, Shapiro said, companies have several constituencies. One constituency - the one I pointed out in the earlier column - is the employee. Another constituency - which I also had pointed out - is the stockholders. A third constituency - and in some ways the most important, he said - is the consumers.
Consumers go after the least expensive quality products possible. If a company can't compete on prices, it's doomed, he said. The small-town pharmacies and stores that have been wiped out when Wal-Mart stores have moved in are a prime example, he said.

Good points all, I told him. But at the same time, what's going on these days at some companies - where, in my view, employees are treated more like pawns in a chess game than as people with lives, children and mortgages - is a shame.
It's also a shame, I added, that so many people these days feel that they can't count on their companies. That lack of confidence produces a sense of unease for those of this generation that didn't exist in previous generations.
Shapiro agreed but added that he saw no signs in the nation's economy that things were going to change.

The Catch-22 of all of this is that as companies continue to lay off people so that they can produce products as cheaply as possible, they eat into the middle of America, the consumers of those products.
They also feed into the growing cynicism of Americans. Some of that manifests itself in hopes for a third political party, the perhaps unrealistic hope that maybe there's someone somewhere who can make things better again.
I wonder how much more erosion the country's middle class can stand before it can no longer afford the products that companies make.

I'm no economist, and neither is Shapiro.
We ended our meeting - of a shirt-sleeves CEO and a rumpled newspaper columnist - with lots of questions and not enough answers.

Gregory Freeman's column appears Sunday, Tuesday and Friday ... <deleted>

Daniel Schesch - Webweaver

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