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.
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.
Reg’s story Threadbare – Not just a pretty face.
Idea Capitalists 