Wednesday, October 19, 2005

So, It Wasn't So, Joe?

When Joe Galli decided to persuade the board of Newell-Rubbermaid to leave its corporate headquarters behind in Freeport I published the following column in The Journal Standardon February 20, 2003.

Say it Ain't So, Joe
by
Roland Tolliver


The sky is falling. The sky is falling. Chicken Little

It is not the Black Sox scandal. It is not the second coming. It is not the end of the world as we know it. It is one company announcing that they are moving their corporate headquarters. Illinois' government and the big business community rejoiced about two years ago when they found out that they had won the Boeing headquarters' sweepstakes. Millions in tax incentives were offered. There was wining and the dining by the corporate elite in Chicago. The key to the city and hobnobbing at Chicago's famous museums were a part of the process. We'll generate millions we were told. The tax incentives will pay for themselves in no time. We've heard that before. The headlines in Chicago acted as if there was no other news in the world. "Ho hum", said the rest of the population in Illinois. Boeing's aircraft are still manufactured by the hard-working citizens of Seattle and other cities with plants in the aeronautical industry. Meanwhile, about 150 executives relocated to Chicago and few words have been heard since then.

Now it is our turn. A few weeks ago we learned that Newell/Rubbermaid's corporate offices will move to Atlanta. How do we compete with Hartsfield Atlanta International Airport? How do we compete with the Peachtree city and the proximity to Wal Mart's corporate headquarters? Why would Joe Galli move out of Freeport for the southern climate and hubbub of Atlanta? Oh, wait, that's right, Joe Galli never lived in Freeport. He spoke to the Chamber of Commerce once, I believe, but I don't think that makes us his permanent residence. Joe, I hope he doesn't mind us being on a first name basis, once said that "But as important as company culture is, it's never set in stone. Culture takes its direction from the goals the company sets and the body of people working to achieve those goals." The corporate compass is currently pointing to a goal south of the Mason-Dixon line. In 1962 that corporate compass pointed northwest of Chicago to the county seat of a mostly rural county when when its companies consolidated into a single corporation in Freeport, Illinois. Sixty years earlier that corporate headquarters was founded in Ogdensburg, New York. Does anybody here know where that is?

When I was looking up the history of Newell/Rubbermaid one word repeatedly showed up in the descriptions. That word was "acquired". We are proud of "our " Newell's acquisitions as "our" Newell became a Fortune 500 company with offices and manufacturing plants throughout the world. We claimed pride in ownership of the "little company that could", which was located right here in the heart of Stephenson County. We cringed with any downsizing and rejoiced with any new emmployment opportunities. People in the area spent entire careers at Newell Window Furnishings. It was a job for life with dividends and stock options. Somehow we grew bigger than our borders through stategic buyouts and corporate mergers and then we became the Ogdensburg of the Midwest. The newspapers' headlines read in large, bold letters that Newell had forsaken us for Atlanta. The Chicago Tribune came hunting for a story and found that in Freeport it was business as usual. No immediate jobs were affected. The centralized corporate functions in Freeport were to be unaffected by the move of Galli's Army (Fortune December 31, 2002) to Atlanta. Our manufacturing base, distribution center and corporate employees were to be like the other 46,000 out of 48,000 employees who are working for Newell/Rubbermaid worldwide. Basically, for the time being, the earth will continue to spin on its axis and people will contiunue to go to work.

Ninety percent of all new jobs are created by the small business sector of America. Over fifty percent of those businesses are started by women. Some small companies become big companies. Most stay small, while many go out of business or start another company. I don't hear too much about them in the city council meetings. I don't hear much about tax breaks or tax increment financing districts. You know the people. There are the accountants, doctors, lawyers, and architects. There are also the plumbers, electricians, coffee shop owners and those that open boutiques or beauty salons. Do you know a massage therapist, owner of a car dealership or store owner? How many people are employed by these people? How often do you see these individuals in the grocery store or at the bank? When was the last time you saw the CEO of Allied Signal/ Honeywell walk into the local Culver's? When was the last time that the CEO of Goodyear spoke to your Kiwanis or Rotary club?

I know that there is a lot riding on future decisions made by the "big three" in Freeport. It will affect all of us in a worse-case scenario of "trickle-down economics." The tax base suffers leading to a loss of school funding and decreased monies for the city's infrastructure. The ancillary services like the hospital, community college, doctors, lawyers, accountants, home-builders, realtors (well, maybe not in the short run), hair salons, and various other businesses lose their client/patient/customer base. Why don't we hear more from our local governing entities about investing in the small business future of our community? Why are we so myopic in our desire to court large businesses in this fragile economy? Illinois was third in the nation in lost jobs last year, and yet, we offer one of the highest rates of tax incentives to big business. I don't see where the long term payoff is. I realize that families can sometimes be uprooted in the corporate world and community spirit can dwindle along with charitable donations and community services. To hear some tell it, we are already there.

There are some things in Atlanta with which we cannot compete. I don't think we'll see a Boeing 767 arriving at Albertus Airport any time soon. We are not near major interstate highways, but I do hope that we see a four-lane highway heading toward Iowa and Interstate-35 in my lifetime. Newell/Rubbermaid has given back millions to our community. The Ferguson Cancer Center and the Freeport Public Library are two prime examples. We are grateful for their contributions and nothing says that their donations are going to dry up any time soon. Honeywell and Kelly Springfield have also made major contributions, along with most of the businesses in our community. Without the individuals who make up the work force, however, none of this is possible. We all give to a community we believe in to the best of our abilities and resources. As for the "quality of life" that the news release said Atlanta offered the company, I believe that it is the quality of the people in a community that determines the "quality of life". In that respect, I'll enjoy the life I have here.

I don't want to sound too Pollyannaish, but I see that we have much potential in our little neck of the woods. There is an underlying spirit in this community. It is the spirit of the people that we see every day in the people that are our neighbors and friends. It is the spirit of those that see the glass as half-full, not half-empty. It is the spirit of those that call Freeport and northwest Illinois home and are proud of that fact. I see it in the thousands of volunteer hours by retirees, churches, service groups and individuals. I see it in the people that are employed and those that are employers and both of these groups' families. I see it in all of the people that donate their time, money and resources to make our community a better place to live. I see it in the people from all walks of life from the boardrooms to the stockrooms and all points in between. These are the people that I am honored to know in a community that my family and I are proud to call home.

It looks now like Mr. Galli is no more the "Whiz Kid" of corporate restructuring than any one of a number of executives who come in highly-touted and then ruin the image or integrity of a company. Freeport, apparently, wasn't good enough for Mr. Galli. He went for the glamour of Atlanta with its busy airport and CNN tower. He came in cutting and slashing jobs and divisions within the company and to what gain. A loss of confidence among the people and companies that had gained trust in the "Newell Way." There was a time when employee morale was high and there was great pride in the company and its products. It still exists, but where it does, it appears to be in spite of Mr. Galli, not because of him. When a family has run a company for years and a family atmosphere exists, it seems counterintuitive to bring in an outsider, who may know business, but doesn't know squat about the people, the history and the way a company does business.

Growth through intimidation ( the'you must work so many hours and produce so much in a day to be successful mentality' may play in New England, but the core of this company and its fortunes were firmly rooted in the Midwest with midwest ethics of family and work as separate, but more equal entities) was counterproductive. And now Mr. Galli of Black and Decker and amazon.com fame, is another statistic, albeit a rich one, in the corporate merry-go-round of those executives who sell themselves to the highest bidder. In the end the burden of the cost is directly on the communities that suffer from their short-sightedness and profit over people mentality.

Say it ain't so, Joe, but it wasn't just a dream and all will be as it was. It was more like a nightmare and our community suffered because of your ineptitude and inability to realize the real worth of the company, the people who worked there because they had a couple of traits that you seem to be in short supply of, integrity and loyalty.

Sunday, October 09, 2005

Drip, Drip, Drip

There hasn't been much in the news lately about the slowly dissipating job force here in Pretzel City. Another 50 jobs or so are scheduled to be "outsourced" from Honeywell by March. I don't know, but I feel that a great deal of the problem with business these days is that it has dehumanized the people who work for the major companies. Perhaps it has carried over into the smaller companies, especially those that want to be like the big companies, but the choice of language used in business takes away from the human aspect.

No one is "fired" anymore. Instead, a person is "downsized," "right-sized," "outsourced," "doesn't fit in anymore," or is lost through "attrition." Of course, much of this occurs on short notice when someone is called into a meeting and given just enough time to "clean out your desk." How much courtesy is given or trust to people who in many cases have given many years of their life to a company. Loyalty is fast becoming a virtue of the past. It is still irksome when some CEO makes millions in salary and bonus for what? Letting people go so that the shareholders will be happy with another two cents per share profit?

It is not only the people that are "let go" that are affected, but it is the entire community. It is the morale of a community. It is the school districts and the health care system. It is the impetus to establish more jobs or to develop greater real estate opportunities. It is the non-profit organizations that suffer along with the smaller mom-and-pop businesses that rely on the steady salary of the local citizens to keep their doors open. It is the lending institutions and the tax base that erodes. It is the drip, drip, drip of a community hemorrhaging good employees, citizens and people until the area is anemic. And when there is insufficient prospects for new jobs, it is as if there is no source for transfusion to reinvigorate the community. We put on band-aids to stop the visible bleeding, but it is the deep, internal bleeding that goes unnoticed for months, years, decades before someone realizes that there is an unkown source of the blood loss or job loss, if you will. We can speculate about the source, but until it is discovered we treat the symptoms, but not the cause.

Former publisher of The Journal Standard, Mr. Gary Quinn, informed this community that we would not be able to rely on the Big 3 of Honeywell, Newell, and Goodyear for many more years. He said that the area was too heavily dependent on its manufacturing base and that it would slowly erode over the next 10-15 years. His prognostication was right on the money. And yet, here we are with nothing to replace the jobs that are leaving, except the occasional retail store and the promise of a hog processing plant. We are not alone in our current state of affairs. Many small towns in the Rust Belt are looking for ways to draw in new employers, whose jobs allow people to maintain a decent standard of living. How many are out there, though, that are not sending the lion's share to Mexico or Third World countries that work for low wages and produce products that are not always up to the standard that is acceptable by U.S. standards? But then again, have our standards been lowered to the point that we will continue to put up with these changes as long as we have access to cheaper products?

We may not be on life support, yet, but the patient is nearing critical condition.

Sunday, October 02, 2005

Here We Go Again

We are embarking on the early election season. It is easy to tell because the money is starting to flow, mostly into Chicago where the majority of the voters reside in this state.

Governor Blagojevich has released almost $200 million into the state's hungry coffers. Voters, I mean recipients, will no doubt be happy, including our local park district for the SK8 Park. $50,000 is nothing to sneeze at and it does go for a project that was partially supported by independent donors, but... I am often reminded of the story of Dr. Faustus or its American equivalent, The Devil and Daniel Webster. It feels like somebody has sold their soul when money is put into projects when it is obvious that the timing suggests, "Look at me. I gave you money. Now, can I count on you for your support at the voting booth?" Multiply our small amount by a few thousand and you get the idea that, hey!, there is money to be had, jobs to fill, and support for the incumbent Governor "Reform, What Reform?!" Blagojevich.

Somewhere soon in a prison cell near you (though obviously not in Thompson, which remains a $40 million boondoggle of unused cells), former Governor Ryan, must be laughing his backside off. All politics is about cronyism and believing that we, the citizens, haven't a clue about what the big boys do in the state capitol of Chicago. OH, wait, that has only become the seat of our state government since the last gubernatorial election. Somewhere in Springfield there sits a mansion, which we pay for through taxes, used as a showcase for the waste that many in our government figure that we have to put up with because we have no choice. How much pork will be doled out before the primaries? How big will Blago's war chest grow before it begins to burst at the seems, or Hillary chooses him to be her running mate? Or will she take a chance on the rising star of the Democratic Party, Barack Obama?

Illinois may be like a lot of other states, but we don't live in those states. Here we see that it is business as usual with our state politics. Daley and the Boys get their pork and we get the rinds, all fluff, no substance. Of course, they package the junk food in such a way that enough find it palatable, but realize after it is too late that it isn't anything one can live on for any length of time. How is the expansion of O'Hare going, Your Honor? Enough jobs for you to keep your title of "Grand Exulted Ruler for Life"? Hear about how Rockford lost another airline or do you even know where Rockford or Northwest Illinois is on the map? Or, do you even care?