American corporations are sacrificing workers
BERKELEY — Boeing just fired CEO Dennis Muilenburg in order “to restore confidence in the company moving forward as it works to repair relationships with regulators, customers and all other stakeholders,” according to a company statement.
Restore confidence? Muilenburg’s successor will be David Calhoun who, as a longstanding member of Boeing’s board of directors, allowed Muilenburg to remain CEO for more than a year after the first 737 Max crash and after internal studies found that the jetliner posed an unacceptable risk of accident. It caused the deaths of 346 people.
Muilenburg raked in $30 million in 2018. He could walk away from Boeing with another $60 million.
Until his ouster, Muilenburg was a director of the Business Roundtable, an association of CEOs of America’s largest corporations. With great fanfare last August, it announced a “fundamental commitment to all of our stakeholders” and not just their shareholders.
Rubbish. Corporate social responsibility is an utter sham.
Another Business Roundtable director is Mary Barra, CEO of General Motors. Just weeks after making the commitment to all her stakeholders — and despite GM’s hefty profits and large tax breaks — Barra rejected workers’ demands that GM raise their wages and stop outsourcing their jobs. Earlier in the year GM shut its giant assembly plant in Lordstown, Ohio.
Some 50,000 GM workers then staged the longest auto strike in 50 years. They won a few wage gains but didn’t save any jobs. Meanwhile, GM’s stock has performed so well that Barra earned nearly $22 million last year.
Another prominent Business Roundtable CEO who made the commitment to all his stakeholders is AT&T’s Randall Stephenson, who promised to invest in the company’s broadband network and create at least 7,000 new jobs with the billions the company received from the Trump tax cut. Instead, AT&T has cut more than 30,000 jobs since the tax cut went into effect.
Let’s not forget Jeff Bezos, CEO of Amazon and its Whole Foods subsidiary. Just weeks after Bezos made the Business Roundtable commitment to all his stakeholders, Whole Foods announced it would be cutting medical benefits for its entire part-time workforce.
The annual savings for Amazon from this cost-cutting move is roughly what Bezos — who has an estimated net worth of $110 billion — makes in two hours. (Bezos’ nearly completed Washington, D.C., mansion will have two elevators, 25 bathrooms and 11 bedrooms.)
General Electric CEO Larry Culp is also a member of the Business Roundtable. Two months after he made the commitment to all his stakeholders, GE froze the pensions of 20,000 workers in order to cut costs. Culp raked in $15 million last year.
The list goes on. Just in time for the holidays, U.S. Steel announced 1,545 layoffs at two plants in Michigan. Last year, five U.S. Steel executives received an average compensation package of $4.8 million, a 53 percent increase over 2017.
Instead of offering employees holiday pay, Walmart offered them a 15 percent store discount. Oh, and did I mention that Walmart saved $2.2 billion this year from the Trump tax cut.
The tax cut itself was a product of the Business Roundtable’s extensive lobbying, lubricated by its generous campaign donations. Several of its member corporations, including Amazon and General Motors, wound up paying no federal income taxes at all last year.
Not incidentally, the tax cut will result in less federal money for services on which Americans and their communities rely.
The truth is, American corporations are sacrificing workers and communities as never before, in order to further boost record profits and unprecedented CEO pay.
Americans know this. In a recent Pew survey, a record 73 percent of U.S. adults (including 62 percent of Republicans and 71 percent of Republicans earning less than $30,000 a year) believe major corporations have too much power. And 65 percent believe they make too much profit.
The only way to make corporations socially responsible is through laws requiring them to be — for example, giving workers a bigger voice in corporate decision-making, making corporations pay severance to communities they abandon, raising corporate taxes, busting up monopolies, and preventing dangerous products (including faulty airplanes) from ever reaching the light of day.
If the Business Roundtable and major corporations were truly socially responsible, they’d support such laws. Don’t hold your breath.
In order to get such laws enacted, we need to reduce corporate power and get big money out of politics.
The first step is to see corporate social responsibility for the sham it is.
— — —
Robert Reich’s latest book is “The Common Good,” and his newest documentary is “Saving Capitalism.”