Fantastic news for the economy: the people advising the president on how to create jobs keep laying off their employees. Kodak could be the big loser if its CEO and adviser to Obama puts Kodak into Chapter 11 bankruptcy. Maybe the “Jobs and Competitiveness” council thought their role was to create new jobs for the people they planned to fire?
Here’s a good write-up on all of this from the NY Sun:
Employees who hope to keep their jobs and investors who hope their shares will rise may want to hope their executives avoid President Obama’s Council on Jobs and Competitiveness.
When the council’s members were announced February 23, among the concerns raised was that the members would use their status to the advantage of their companies. In fact, what’s happened since then is that the 13 publicly traded companies whose executives were appointed to the council, taken together, have declined in value by about 7% through year-end, worse than the decline of about 4% in the Standard & Poor’s 500 Index over the same period.
Eastman Kodak’s stock has lost more than 80% of its value since President Obama named its chairman and CEO, Antonio Perez, to the Council on Jobs and Competitiveness. Citigroup is down 44% since Mr. Obama named its chairman, Richard Parsons, to the Council on Jobs and Competitiveness. The UBS AG shares traded on the New York Stock Exchange are down 40% since Mr. Obama named Robert Wolf, the chairman of UBS Group Americas and the president of UBS Investment Bank, to the Council on Jobs and Competitiveness. All these figures are adjusted for any dividends or splits.
If these council members haven’t produced much by way of competitiveness, at least as measured by stock price, they haven’t produced much in the way of jobs, either. In April 2011, Kodak announced 48 layoffs in Durham, North Carolina. In August 2011, UBS announced 3,500 layoffs. In December 2011, Citigroup announced 4,500 layoffs. Call it the Competitiveness Council Curse.
Maybe at the next meeting of the Jobs and Competitiveness Council, the president could invite some of the employees who have been laid off by his own council members to come testify.
It’s certainly possible to make an “it would have been worse” argument, the same way President Obama does about the economy absent the stimulus. Perhaps without the advantage of having executives with input into government policy and access to government officials, Kodak, UBS, and Citi would all be doing even worse, and perhaps they would be announcing even bigger layoffs.
But it’s also possible to make an “it could have been better” argument, which is that companies whose executives get politically involved in these sorts of boards generally do so as a kind of last resort, seeking to gain by political influence or decision-making what they have been unable to achieve through competition in the free, private marketplace. If these companies were stronger to begin with, the executives might be busy growing them, rather than sitting around at meetings in Washington trying to help President Obama appear more business-friendly.
The rest here.