8.08.2007

U.S. Business: Still Shooting itself in the Foot

by Jeff Siegel

Periodically, the business community will lament the way it is portrayed in the news media, on TV and film, and even radio call-in shows. Businessmen – and now women, of course – are especially evil murderers on programs like Law & Order, are slimy and corrupt in movies like Wall Street, and held up to ridicule for their latest faux pas, whether it's an Enron-style collapse or something much simpler, like Wal-Mart treating its customers badly.

The business community always argues that most businesses are run honorably and ethically, by people just like you and me who have the same concerns that we do. Perhaps. But over the past few weeks, two American businesses have shown they they still have a lot to learn about doing the right thing.

Chrysler's new owners, an equity buyout fund, named the man who was kicked out of Home Depot as the car maker's new CEO. This is an almost Kafkaesque appointment, since Robert Nardelli not only knows little about the car business, but is widely cited as the man who made the customer experience at Home Depot akin to getting one's skull bashed in. To quote USA Today: "But worker morale and customer service at the big home-improvement chain drooped after he replaced veteran workers with part-timers to save money."

Nardelli is not at Chrysler to make money by building better cars or pleasing customers. He is there to cut costs, cut costs, and cut costs some more. That is how wise guy equity hedge funds make money these days, not by improving the product or satisfying customers. At that, Nardelli has long experience.

At The Wall Street Journal, meanwhile, the fox (pun fully intended) now owns the hen house. The news is not so much that Rupert Murdoch took control of the country's most prestigious business newsaper, but that so few members of the founding Bancroft family cared. It's probably an exaggeration to call Murdoch the spawn of the devil; let's just say he'll do until the real thing comes along.

But it didn't seem to matter to the Bancrofts. The Journal's parent company, Dow Jones, had a family-controlled two-tier stock system to prevent just this sort of takeover, and it made not one whit of difference. The family figured money was money, even from Murdoch, and that they'd rather have that than 105 years of mostly journalistic excellence.

Between Nardelli and the Bancrofts, the media probably have enough for a dozen "business is corrupt" efforts, and business will have no one but itself to blame.

(Political cartoon from radicalgraphics.org, which offers its material for free.)








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