Threadbare – Not Just Another Pretty Face

“When you bust through all the layers of brevity and you have shaken all the hands of hope, you can begin to share the depths of depression joblessness can bring.”

This pretty much sums it up if you are over 50 and looking for employment.

Reg – Not Just Another Pretty Face.

When I decided to do this story about my good friend, Reg Lepper I thought maybe it would help him by building on the social networking he had already begun on LinkedIn and Facebook.

As I began learning more from him about his 27 plus year career at Hartmarx, known for its Hart Schaffner & Marx and Hickey Freeman suits, and for making President Obama’s inauguration tuxedo and topcoat, I realized the complex struggle he and his cadre of sales professionals and the plant workers endured.

The company and its United States subsidiaries filed for bankruptcy in January, 2009. Workers threatened to occupy Hartmarx’s plant if the company’s creditor, Wells Fargo Bank, attempted to lay off workers and liquidate the company’s assets.

In August 2009, Emerisque Brands UK and its partner SKNL North America completed their purchase of Hartmarx.While Reg survived the bankruptcy of Hartmarx, the acquisition, ultimately of a foreign owned conglomerate based in India, many of his friends and fellow employees lost their jobs.

Not to be outdone Reg took it upon himself to write an impassioned plea, (click on the link “a letter to the President”) a letter to the President of the United States, Barrack Obama, the beneficiary of the afore-mentioned Hart Schaffner & Marx suits.  Fifteen (15) months after the acquisition Reg, too lost his job.

Like many who are unemployed, Reg wants to work.  He wants to support his family.  Like millions of Americans, there have been forks in the road and to make ends meet, he needs a job.  Reg is, as I describe him on LinkedIn.com business social networking site.

Reg’s now been unemployed for 7 months.  Not for lack of trying.  Reg has employed every means of looking for work.  Shunned by “head hunters” most likely due to his age, Reg is 64.  I can personally vouch for the fact he doesn’t behave or look a day over 30… OK so he looks a bit older, but he’s a firm believer in exercise, has been a long time distance runner.  Now his knees are telling him he needs to go shopping for a good bike – cheap!

That aside, Reg has been and is actively looking for work.  Sending out his (click on the link to Reg’s “resume“) resume doing  job interviews, volunteering his time for Career Ministry and consulting their members regarding many aspects of their search for new opportunities and careers.

Reg isn’t alone.  This is a nationwide plight affecting thousands of households across America.  If you are over 50 and unemployed in today’s economy, you could be facing many challenges including a mortgage underwater.  In such cases, how can you move to accept a job offer across the country?  What if you took a second mortgage out to pay for your kid’s tuition?  What if your kid is living at home because he or she can’t find a job or can’t afford to make ends meet on their own?

So is Reg’s story only about being a high income earner and over 50 an age related layoff?  I began to see there are many other dynamics in play.  Those dynamics include government and politics; how an increase in payroll taxes on corporate America has impacted US manufacturing jobs; and the shift in manufacturing jobs overseas.

Add TARP and “too big to fail”. i.e., Wells Fargo into the picture.  Let’s not forget the unions. Hoping to save their jobs and start a national movement, Hartmarx workers were pressuring Wells Fargo, the company’s main creditor, to approve the sale of Hartmarx to a buyer that would keep it alive instead of liquidating it and most likely putting its celebrated labels on suits made overseas, The New York Times’s Steve Greenhouse reported.tty face.

While I’m not going to rehash all the events which took place and detail the timeline I think it is interesting to point out there were a number of high profile players involved in the decline of the 124 year old company.

While researching this debacle 9 out of every 10 – news articles or posts reference corporate greed or the big bad bank, in this case Wells Fargo, as the culprit.

“That begs the question, “who buys Hartmarx suits?”

The answer is, “Wall Street bankers.”  OK, so who is demonizing Wall Street?  Obama and his posse, including Dick Durbin, Chuck Shumer and Barney Frank those who were championing the case for Hartmarx and union labor against Wells Fargo.

As reported by Progress Illinois:   The news of a potential liquidation (of Hartmarx) caused workers, union leaders, and members of Congress to spring into action to aid the company, which employs 3,000 people nationwide, including 1,000 in Illinois.  Rep. Phil Hare, who spent 13 years as a Hartmarx employee, described himself as “livid” at the bank, which accepted $25 billion in federal bailout funds. He went on to enlist the help of Rep. Barney Frank (D-MA) and Sen. Chuck Schumer (D-NY). Rep.  Jan Schakowsky, whose great-aunt found a job with Hartmarx after emigrating from Russia, called Wells Fargo CEO John Strumpf and urged him to keep the company running.  Illinois Treasurer Alexi Giannoulias, meanwhile, sent a letter to Strumpf threatening to sever the state’s business with the bank if Hartmarx was ultimately liquidated.

Days after suit maker Hartmarx was sold to Emerisque and its Indian partner S Kumars Nationwide Ltd, SKNL a textile giant three US plants of the clothier have been shut down resulting in the loss of over 500 jobs.  Not a peep out of President Obama, then or now and the Hartmarx factory making his suits in Des Plaines… still open.

Obama, proudly flashing the Hartmarx label

While they may have saved some jobs, politicians and union bosses who should know better and who have voted consistently for more government and more spending weren’t helping the cause.  They may have acted like they are helping Hartmarx employees but their votes for higher taxes and more spending were helping to drive manufacturing jobs overseas.

Reg, on the other hand took it upon himself to champion the cause for Hartmarx workers.  He wrote a letter to the President and stirred the political “hornet’s nest” to get politicians pontificating and deserves a lot of credit for saving US worker’s jobs.

Let it be stated, from all accounts, Emerisque, a British private equity firm working with SKNL, has been doing all it can do to promote and keep the US plants open. In fact, Bud” McCullar, a partner at Emerisque called Reg and commented on how much he cared about the company and fellow employees.  Here’s a quote from Mr. McCullar on Reg’s LinkedIn profile.

“Reg is the consummate seller for an ever evolving apparel and consumer products segments.  From presenting to closing, ever the professional.”

There’s a great book called Built to Last written by James C. Collins and Jerry I. Porras.  A very dear friend of mine recommended the book to me.   She has been fighting breast cancer for the past 10 years or more.  Apparently she, too, is “built to last.”  Thank God.

The authors define their choice of successful companies’ continued success to be built on “core values” and continued innovation by trying many things through change and recognizing and staying with what works.

If you are the management (CEO) of a company large or small it is your job to see to it you take care of the bottom line and all that goes with it.  That would be principally “cash  flow” management.  Too often, cash flow management is lost on CEOs who are paid for short term gains which inevitably cause long term pain.

That’s why small business is the backbone (more than 70 percent) of the US economy.  For small business cash flow is king.  Our only short term goal is to stay in business, cash flow and grow.

Maybe if more corporate giants and Wall Street bankers had stuck to their core values we wouldn’t be in as big a mess as we are now in today?  Case in point, the merger and acquisition (M&A) frenzy in the 90’s.  Corporate giants, including banks, joined in the M&A rush, to the extent some industry experts were predicting there would only be 3-4 large bank holding companies left in America.

Hartmarx too, jumped into the fray with an acquisition in late 1996.  They added two more in 1998.  In late summer 1999,they added another.  Maybe these acquisitions were good for the company.  I’m not here to judge.  What’s intriguing about the acquisitions is the correlation with offshoring.

In the 1990’s Hartmarx began the offshoring of production facilities to control costs. During that period, they closed ten domestic factories and shifted production to the Far East, Mexico, and Costa Rica.

Someone should have written a book titled Built to “Be” Last – The Decline in Manufacuring Jobs in America – as American manufacturing companies began moving production overseas.

Now here’s the strongest argument yet to keep as to why there are fewer and fewer manufacturing jobs here in America.  If it were not for payroll taxes many more manufacturing jobs in America would have been saved.

While everybody was pointing fingers, blaming everyone but themselves for plant closings and lost jobs, you need not look further than, “it’s payroll taxes… (I’ll let you finish the sentence).”  Granted corporate greed is a factor here.  The problem is many large corporations are multi-national and feel the pressure from foreign competitors not burdened with the higher payroll taxes on workers.

Our government raised payroll taxes in April 1983.  The illustration here shows the investment US corporations began to make overseas according to PoliticalCalculations.com as “unintended consequences” of the payroll tax increase.

If you are a “for profit” company and it is your job to increase shareholder value, you are going to look for ways to lower your costs.  Increasing the payroll taxes on American workers was a major impetus to shift American manufacturing overseas.

We vote to place politicians in office to spend our tax dollars wisely.  They don’t.  On the other hand, we vote with our investment dollars to allow corporate “greed” to profit on the backs of American workers.  They do.

It’s time politicians wake up and reverse the course of lost manufacturing jobs by eliminating payroll taxes and adopting  the FairTax – see www.Fairtax.org.

Ultimately it is up to us as individuals to make the right choices.  This debt crisis is our wake-up call.  Let’s get back to our core values.  If you ask Reg it’s about God, family the desire to contribute his tremendous talent and work ethic to a company and a country “built to last.”

Made in the USA doesn’t have to be about politics or unions.  My good buddy Reg and many of those that have suffered the “unintended consequences” of increases in payroll taxes and lost  manufacturing jobs, will find no comfort here.

For more on Reg click here resume.

About Idea Capitalist
Family guy and entrepreneur. Small Business owner. NFIB Leadership Council member. Serial blogger.

2 Responses to Threadbare – Not Just Another Pretty Face

  1. Susan Jeffery Lepper says:

    Al, you are a prolific, compassionate and objective writer who puts the truth on the table–and a wonderful, trusting, and steadfast friend. Thank you for caring, as so many do not.
    And by the by, I agreed with you on “Water for Elephants”–too much abuse and only liked the last chapter. It appears that I was reading about animal abuse, and living with corporate and government abuse at the same time……..odd how fiction and non-fiction are at time undistinquishable.

    Like

  2. Pingback: Threadbare – Not just a pretty face – Reg update « The Real McCoy for Small Business

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