It’s been quite a decade for our Captains of American industry.
598k jobs were lost in January, the fifth striaght month that the American workforce lost more than 400k jobs. 2.6M jobs disappeared in 2008. That’s more jobs than in any other year since 1945.
Let’s start our tour by checking in on banking, which is in a state of ruin. Their reckless lending practices have led to the current sub-prime mortgage fiasco, which began in 2007 and has turned the collective American dream of home ownership into a nightmare. American Insurance Group, at one time one of the world’s most powerful insurance companies, reported losses from the mortgage crisis of up to $5 billion.
Those bastions of visionary leadership in the financial services industry have not fared much better of late. For proof, one only has to look at Merrill Lynch and Citigroup, who had to go seeking investments from Asian and Middle Eastern Governments last year to improve their balance sheets. U.S. investment bank Bear Stearns collapse is epic, even by Depression-era standards. Its stock price dropped from a high of $169 to $2 last year, and it had to be bought by J.P. Morgan with backing from the U.S. Federal Reserve.
And then there is automobile manufacturing, struggling to compete and failing miserably for nearly thirty years with aggressive foreign competitors and shifting market conditions. It got so bad for GM last year that at one point it announced a $15.5B quarterly losses, third most in its 100-year history. Ford Motor Company announced a loss of $8.7B, Chrysler decided to stop leasing cars and trucks, and GMAC announced a $2.5B second quarter loss. Then GM and Chrysler went backing for cash to remain in existence in 2009.
Cable and telecom companies have practiced their own fair share of questionable business practices, such as price gauging their customers by charging them for hundreds of unused channels of content or burying inexplicable surcharges and taxes in overwhelmingly complicated monthly consumer statements.
Even more unsettling than the incompetence of American business leaders has been the seeming proliferation in a lack of ethics that American business leaders exhibit to excess. Senior executives at Enron, Tyco, Adelphia, Global Crossing, etc. merely reinforced the belief that business leaders use their companies as a tool to ensure their personal financial well being at the expense of their employees and all other considerations.
Given all of this bad economic news spread across the American business landscape, now seems an IDEAL time to ponder whether anyone in corporate leadership is awake at the wheel.
We have to ask ourselves who will step forward from today’s American enterprise to lead with vision? American companies seem devoid of any ability to combat global economic threats and paradigm shifts. The “C” suite of Corporate America is sputtering and flailing for a lifeline, grasping at desperate acts such as outsourcing and off-shoring many of their core functions. Their knee-jerk decisions are aimed solely at achieving ill-defined, short term gains. Business leaders in most industries and sectors seem to only have one solution to deal with rapidly changing economic challenges, that being massive layoffs.
Our military industrial complex is comprised of companies that (intentionally or not) allow significant military secrets to migrate to global powers such as China, India and The former Soviet Union as we outsource key top secret development to them as we pander to gain access to their markets.
All this begs the question, what is going on in the mind of the American CEO? The answer today remains the same as it did at the turn of the last century…the sole pursuit of profit at any and all costs. When will American business be driven by ethical visionaries with a moral compass and the fortitude to tackle problems with creative new solutions, make knee jerk reactions that only serve to ensure their own economic situation? Only time will tell, and unfortunately the business leaders guiding our future have not established a stellar track record to garner much hope.
If the chief executive of a company performs so poorly they are urged to resign by the company’s board, they are allowed to sail off in the sunset5 with golden parachutes of millions of dollars.
On the bright side, there is ONE industry that seems to be doing quite well for itself of late, as evidenced by Exxon Mobile’s second quarter 2008 earnings reached a record high of $11.68 Billion. British Petroleum also reported record second quarter 2008 profits of $9.46 Billion, as did Royal Dutch Shell at $11.56 Billion. It seems like the $4 per gallon gas threshold being breached in 2008 before coming back down to $2 didn’t hurt ALL of America’s industries.
At least we can drown ourselves in the mind-numbing insipid formulaic unreality of our reality TV.