Confessions of A Corporate Executive

warehouse-768763_640The political mantra today is to create and retain jobs for the American worker. That is a great and noble idea. This was not, however, ever the charter of American businesses. The objective of every US corporation is first and foremost “to maximize the value of the company, as measured by the growth of its earnings per share and ensuring its long-term future.” Nowhere in this charter is a responsibility to provide for the jobs of its citizens.

More recently, some corporations have modified this objective to include things like Google’s “do no harm” mantra, or not investing in countries with human rights abuses (TIAA-CREF) or being environmentally friendly (Tesla Motors); but creating and retaining American jobs has not typically been a stated objective. This may, however, become one in our current political climate and that’s fine and may well become a marketing tool going forward.


Given the above, as a Fortune 500 executive, I was charged with maximizing corporate profits. I closed unprofitable plants typically in the high union labor markets in the US and relocated them elsewhere. In my case, this included Latin America, the Caribbean and nonunion towns in the Southeast. This made us the lowest cost producer and maximized our profit. We reduced our labor rates, had lower energy costs and taxes, free land, more business-friendly work rules, incentives from politicians in the new location, etc. In some cases, the existing factories I relocated were profitable, but we could make more money in another location.

I knew that not only was this my job, but if I didn’t do this, someone else would.  I said on many occasions that if I was prevented from moving by US law, I would adhere to that, but absent that I did what I had to do. In addition, most of the time, if we did not relocate, or were forced to remain where we were, it was just a matter of time until those facilities would be shuddered and not only would no one have a job, but the company eventually would not survive.

Michael Neidle

Michael Neidle
Michael Neidle is president and CEO of Optimal Management, an advisor to staffing firm owners and managers.

Michael Neidle

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