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View From Down Under

This month's editorial strays from the norm. One of PFFC's E-Clips e-newsletter subscribers voiced an opinion to which I felt you'd enjoy responding.

In the Dec. 8, 2008, E-Clips edition, just shortly after the three big automakers trekked to Washington to beg for their share of bailout money, I posed a question to subscribers under the headline, “Wall Street Versus the Automakers”: So is it fair that the three big automakers must have a strategic plan before a bailout is given to them, but Wall Street didn't need a plan? Shouldn't they both have a plan? Write to me, and let me know what you think.

While the subject of automaking certainly is not one with which converters typically are concerned, the full-scale reach of our economic dilemma is one that has impacted all of us — even globally — regardless of industry category. What makes the response I received to my question, and which follows here, so interesting is that it comes from one of our English-speaking converter brethren located far from where the present economic debacle originated, i.e., Australia. His signature protects his identity while revealing a skepticism that many of us no doubt share.

“The sole criteria for deciding upon the course of action to be taken by government is (should be) whether the aim is to benefit society as a whole or only part of it.

The people under discussion, responsible for creating and taking huge personal incomes, have done nothing other than feather nests themselves, while being ready at any moment to show how business-minded they are by cutting jobs of low-income earners — not takers, “earners” — if the business is underperforming. They who do the real work take the fall.

Now that the solely self-interested have been caught out, their corporate finagling exposed as just that, along with their ineptitude, they cry for help and blame anyone other than themselves for their mismanagement.

One of the great truisms of business is that there is always undiscovered talent residing within the business at more junior levels or lower in the management structure. Here is a simple solution for all and any business that is either government- or shareholder-owned:

No person in the business or organization can be paid (“earn” is something else) more than seven times the lowest-paid person in the business. So, unless you are a founder/owner of a business, your aim better be to enhance everyone's income in your company. No more multimillion-dollar incomes for the directors of major banks, supermarket chains, mining companies, etc., unless they are the founders.

The result would be that those who don't really care about their responsibility to their whole organization, or who want to earn more, will leave and start or buy their own businesses. Those who can perform, but were held back, will rise, as no one would have a sinecure. The duds can be sent packing. Perform or leave.

If this premise is wrong, look to Scandinavia and some of the best businesses there. If future corporatism is allowed to follow the past, the past will only drag on our future to the detriment of us all.

This way, free choice is still available to all, but a free ride for corporate types is not… Let's hope common sense (which isn't all that common anymore) prevails.” — Getting Over the Blutocratic Blunderers

Has a business mentality dictated from the top mandated a “profit at all cost” result, turning some business managers into greed addicts? Self-destruction seems the only outcome of such a philosophy. I'd like to think our industry is immune to such antics and that we simply do not accept this approach as a way of doing business.

For the sake of argument, let's agree that converter operations categorically reject a business philosophy of “profit at all cost.” Write to me and tell me how your companies have protected and ensured the long-term viability of your businesses by offering an alternative management solution, as the reader above has provided. Tell me if your company has a system of checks and balances that serve to secure an honest yet profitable (they shouldn't be mutually exclusive!) business operation.

If you'd like a subscription to E-Clips, visit www.pffc-online.com and join in our idea exchange.

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