More This and That

An Italian cruise ship plying the Somali coastal area recently rented an Israeli security force and repelled pirate boarders with armed force. If I had to borrow somebody’s security force, the Israelis certainly would be high on my list.
All they had was pistols and fire hoses. The pirates came in firing automatic weapons wildly, threw ladders up to the deck and started to climb. The passengers were ordered below decks; the deck lights were doused. The Israeli team opened up and the pirates ran for it.
Many voices were raised in worry that this would mean an escalation of violence. Others claimed that arming ordinary freighters would be much too expensive. Safer, they say, to let the pirates do their thing without resisting.
How would that argument go over with the banking business? Wouldn’t it be safer for everyone if we just pulled all the security out and let the bank robbers take whatever they wanted without the risk of escalation? There really isn’t a genteel way to answer that question.
SMOKING AND ECONOMIC HEALTH
There’s an interesting article in this week’s “Business Week” called ‘Philip Morris Unbound’. It talks about how Philip Morris has split itself in two—one half to worry about smoking/cancer liabilities in the United States—the other half to create vast new smoking markets abroad.
Yes, they concede, five million people will die—painfully—from cigarette-caused cancer this year. But, business is business. In places like Indonesia where there are eighty-million kids under fifteen, Philip Morris is aiming its advertising right for the young market.
Buy their stock. They are doing well. Sales jumped 13% last year to 26 billion. Profits shot up 14% to 7 billion dollars. All in the teeth of a major international recession. “Business Week” quotes analyst Christian Eddelman, as saying that in any other business, their tactics “would be pointed to as the way to execute a long term strategy.”
Of course, says the article, Philip Morris is in a race against the number of nations that are beginning to limit cigarette advertising and launch campaigns against smoking. Philip Morris knows it must move fast to establish new markets for what it admits is “a very harmful product.”
The president of Philip Morris, Louis Camilleri cheerfully admits that he told his own kids not to smoke. He also admits he has to pay a premium to hire top talent due to the opprobrium attached to selling cigarettes, and that, for safety, they fly private company owned planes.
What does all this say? How about: Modern business, like modern science, is essentially an amoral affair. Whatever you can do, it is all right to do. (I didn’t say immoral; I said amoral—there’s a huge difference.) Which means that your obligation to your shareholders supersedes any and all questions of humanity, decency or right and wrong.
After all, American owned companies in Nazi Germany used slave labor—where the workers were literally worked to death—without undo questions or complaint. Asbestos and coal mining industries, to say nothing of regular factories, have long worked without too much concern about safety and health.
Fixes have been caused by law suits—fought against viciously by the affected industries—or by Congressional reaction to constituent outrage at a major casualty count like the Triangle Shirtwaist fire in 1911 or the coal mining disasters of a few years ago.
Companies have rarely if ever fixed health or safety problems on their own. It’s just not good business.
Why? Because they are mean? No more so than a scientific researcher. It’s simply that morality has no recognized place in our business or professional lives. (Something called “ethics” does, but no one seems able to define it.)
So, ask yourself, in a world full of companies just like Philip Morris, what do you think about the need to regulate those companies? Think we can trust them with our lives, portfolios and mortgages without some serious oversight? I didn’t write this to say Philip Morris was evil. It’s not. It’s simply a modern corporation doing what comes naturally—and doing it well.
BYE BYE CHRYSLER?
Inventor of the mini-van, of the Hemi and the humongous Dodge Truck—platform for Lee Iacocca to stand on while he defied Henry Ford II. Subject of two major bailouts (1955, 1980), and now it looks like the end of the line for the name plate.
The suggestion is that Dodge will survive, as will Jeep. But, Chrysler, the mother ship, will go the way of Plymouth and De Soto. Do you remember the names of all the auto manufacturers that have fallen by the wayside since World War II?
Kaiser and Frazer. Willies Overland. Studebaker, Packard, Hudson, Nash, De Soto, Oldsmobile and Plymouth. Chrysler will make it eleven—that I can think of. Whatever happened to the Geo? GM is suggesting that the wide-track Pontiac is on its way out, too.
The American auto market has been contracting for decades now. It’s just that for most of the time, the Big Three were doing the squeezing against smaller brands. (Eventually the Big Two squeezed Chrysler hard enough to make it kill the De Soto around 1958.)
Now the market, overrun with better built and sexier cars from Japan and Europe, is beginning to crush the too-long complacent (and just plain arrogant “Big Three”).
Who’s going to explain to the legions of auto workers that nobody is doing this to them on purpose; it’s just normal, survival of the fittest, business? (Maybe they could apply to Philip Morris.)