If you didn't notice Emerson Electric Co. David Farr's comments made before the Thanksgiving break, take note now. The CEO voiced what's on the minds of plenty of manufacturing company leaders and managers.
"Washington is doing everything in their manpower, capability, to destroy U.S. manufacturing," Farr said in November at an economic forecasting conference. "Cap and trade, medical reform, labor rules."
Farr is speaking from a position of strength and confidence. His company's stock price hit a 52-week high just days after he made his national pronouncement, and Emerson's earnings jumped 30 percent as revenues increased 16 percent in 2008. Heck, his company is the second-most admired electronics company according to Fortune magazine.
He is, however, the head of a multinational conglomerate. His job is keeping the stock price high and keeping Emerson ahead of the competition. It's not keeping factories open just for the sake of keeping Americans employed. Bloomberg reports that Emerson has shed more than 20,000 jobs since the end of 2008 to lower expenses.
His thoughts mirror those of the hundreds of people that attended the recent FABTECH International tradeshow at Chicago's McCormick Place in November. Most of the people I talked with wanted to believe that an economic recovery was under way, but have their eyes watching the horizon, trying to figure out what's coming their way. The health care reform movement has hit a roadblock in the Senate, but, truthfully, I don't think most businesses are thrilled with the proposals. Potential cap and trade legislation and regulation make businesses nervous, and the recent scandal involving climate change research only politicizes this debate even more. Both issues are linked to potential tax hikes to cover the additional expenses associated with the new programs. In short, when companies are paying out more funds to Uncle Sam, they don't like to expose themselves to the increased risk that could be associated with expansion.
But does a leader really help a tumultuous situation by taking potshots? Whatever happened to calm and cool leadership that keeps the foot soldiers reassured with confident and positive statements? I guess that doesn't fly anymore at these Wall Street meetings.
"I'm not going to hire anybody in the U.S. I'm moving. They are doing everything possible to destroy jobs," Farr said in November.
So as he goes off to look for the greener pastures of India and China, we're left here to try and sort out this whole mess. You've got a wave of baby boomers heading for retirement, and somehow Medicare and Social Security are supposed to absorb all of these people without any additional tax support. The U.S. is still fighting two wars, and everyone wants to support the troops just as long as a tax is not involved. Take the aforementioned entitlement programs, the wars, and the interest being paid on our current deficit, and you are looking at more than half of all government spending right there.
Farr is welcome to his opinion, but in reality his criticism of Washington is a criticism of the voters that put those politicians in power. Those voters are concerned about their economic future and that of their children. The free market in recent years has been anything but free of pain, and these voters need convincing that the free market approach still works. Advocates for this approach, such as Farr, need to take the lead instead of heading for the rosier lands of the Far East.
Of course, while in China, Farr may want to be careful who he criticizes there. They may be welcoming U.S. manufacturers to the country, but they don't take kindly to criticism.