Rubbermaid

In recent years, companies have managed to turn their backs on employees and investors, all because they wanted to save money and do what’s best for the company and them without caring how it would affect the employees and investors. They became greedy and did whatever it took to get themselves rich by lying to investors with balance sheets that didn’t include money-losing assets and laying off employees leaving them jobless and feeling betrayed. Even though both employees and investors were betrayed by the companies, they do not share sufficient common interests to join forces in asking for reforms from either government or corporations. There are three reasons for this: first, investors are higher on the ladder than employees; second, both
Most of them didn’t even see it coming. Due to outsourcing, many employees have lost their jobs, even the ones who have been with the company since the beginning of times. Very few lucky ones were able to find other jobs, even though they paid less than half of their previous income, and received fewer benefits. Sylvian Greene, who had worked 18 years at Rubbermaid was one of the unlucky ones. Even though he had found another job that paid half off what his old job did, he lost it a few years later. Many people were able to help Sylvian and his wife Lois, but they still struggled and managed to survive on charity, welfare and food stamps. Another reason employees felt betrayed was because of payoffs for layoffs in which companies collected taxpayer subsidies while downsizing. A study of Big Apple revealed that at least 39 out of 80 companies that received retention subsidies had announces major layoffs, entered into large-scale mergers, or put themselves up for sale, all of which result in mass layoffs. After doing a detailed analysis of 10 of the subsidized companies, they found that that there was more than 3,000 jobs lost, just from these 10 companies (p 16). Investors have also been betrayed. By taking money-losing assets off their balance sheets, banks and corporations were able to hide them from investors, leaving investors to think that the company is not losing any money.
First of all, investors are higher on the ladder than employees. They have almost the same amount of power that the managers at companies have, if not more. An example of this was when Enron’s managers manipulated earnings and avoided regulation by using complex financial instruments and engineering. This happened because the shareholder’s had lost control of the company’s managers, who then lost control of the employees. Many corporations need capital from equity investors to be able to grow and progress. Second, even though both employees and investors had income coming in from the company, it was for different reasons. Investors were investing to make money off money. Employees, on the other hand, were working hard physically to make money (from hard work not from money) so they would be able to have a roof over their head and food to eat. And third, investors were lied to and had things hidden from them. Both Enron and WorldCom were companies that had lied to investors. Enron told investors they had made $1.8 billion, when in reality it was quite the opposite: they told IRS they had lost a billion (p 210). WorldCom on the other hand, reported no loss but over exaggerated about their earnings. Enron also hid the fact that they were trading natural-gas and electricity derivatives. Employees were not