The day started with an American CEO ringing the opening bell at the NASDAQ in New York. And it ended with that same CEO announcing plans to cut his company’s American workforce.
It was Friday, August 9th. Mark Durcan, CEO of the global Micron Technology, Inc. had traveled from the company’s headquarters in Boise, Idaho to visit the NASDAQ trading epicenter in Times Square. The company has been enjoying good news over the past several months, including a rise in its’ stock value, additional contracts to sell its’ computer memory systems to additional tablet manufacturers, and its’ recent acquisition of the Hiroshima, Japan based Elpida Corporation. Ringing the bell at the stock exchange seemed like a great way to cap-off a string of celebration-worthy events.
But late in the day on August 7th, and continuing through August 8th, an internal memo from Mr. Durcan began circulating to Micron’s American-based employees (the company has operations throughout the North American continent, including the states of California, Colorado, Idaho, Virginia, Minnesota, Texas and Utah). In announcing what was described as a “workforce optimization” plan, Durcan noted to employees that “steps like these to improve efficiency and competitiveness are difficult, but our business is heading in a positive direction and we must build the foundation for a bright future. Success will not be achieved without some tough decisions, and this is one of those.”
The “steps” amounted to an across-the-board reduction in Micron’s workforce. But this wasn’t aimed at Micron employees worldwide – no, it’s a reduction in the company’s American workforce specifically. Durcan was offering a generous severance package to those who voluntarily wanted to leave, and if the company’s American workforce reduction goals aren’t met within a specified time frame then official “layoffs” will be the next step. Over the next ten days, entire departments within Micron’s U.S. operations were told in essence, “here’s your severance package offer, if you don’t take it your position may still be eliminated later.”
Micron, by the way, is a great American business success story. Begun at the dawn of the new “computer revolution” era in 1978 with, among others, some very young and eager graduates of hometown Boise State University, it would eventually be infused with investment capital from a billionaire Idaho potato grower named J.R. Simplott on its way to becoming a publicly traded global enterprise.
Like other players in the highly competitive computer memory industry, Micron has had its ups and downs over the decades. Job layoffs have happened before within the company, and twice last decade – first during the post “Nine-Eleven” recession of 2001 and then during the “great recession” of 2009 – former CEO Steve Appleton chose to sacrifice his entire salary as a means of helping restore profits during lean times. Through it all the company has re-distributed portions of its profits in to its own charitable “Micron Foundation,” and has donated regularly to arts programs, and to both public and private colleges and universities to support tech education.
But this time Micron’s “unfortunate news” is different. The company isn’t merely reducing its’ workforce. This time Micron is specifically cutting jobs in America, even as it will soon be expanding its employment base in Japan. Forget trying to explain to the community organizers in our country about the company executives’ “fiduciary responsibilities” - one can imagine that President Barack Obama and lots of disingenuous members of Congress might soon make an example of Micron and unleash talking points lamenting the company’s “un-patriotic” behavior and then vow to “crackdown” (whatever that means) on those dastardly American companies that are “shipping jobs overseas.”
But Americans need to wake up and realize that it’s the policies of these disingenuous politicians that are leading the United States to become a lousy place to do business. The U.S. has the highest corporate taxation rate of any country in the world right now. Japan lowered its corporate income tax rate from 39.5 percent to 37 percent in 2012, and now the Japanese legislature is talking about lowering it even further.
And then, of course, there’s Obamacare. The President’s signature policy initiative is driving insurance costs sky-high, and most of that burden is being carried by individual American workers and their employers. Companies whose CEO’s are on “good terms” with President Obama – companies like McDonalds and GE Corporation, for example – have gotten themselves exempted from the Obamacare horrors. Micron hasn’t received our dear President’s blessing, apparently, and so must make some moves to protect the interests of its’ investors.
Do Americans want a thriving economy that produces career opportunities and potentially productive lifestyles for all? Or do we simply want to continue in our fantasy-based pattern of believing politicians’ promises of “free” things as we pay no attention to their actual policies?
The choice is ours to make.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.
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