In Beating the Bottom Line, Hedrick Smith
explores alternatives to the winner-take-all strategies that have largely come to epitomize the New Economy of the 1990s. This final hour of the series draws a sharp contrast with the opening hour, Running With the Bulls, which analyzes the values and motivations of Wall Street money-mangers and corporate deal makers.
Beating the Bottom Line explores concrete examples where companies, communities, and corporate leaders deliberately decide to share the gains more broadly and to lessen the widening income and wealth gap.
While there are no easy answers, Smith and producers Chris Koch and Tom Jennings find plenty of examples of management, labor, and communities combining forces to provide greater job security and more
equity, while still remaining profitable and competitive.
One form of collaboration emerged when a distant corporate owner decided in mid-1996 that the famous old Hathaway Shirt company in Waterville,
Maine could not compete with Third World imports and its 500 jobs would be better shifted to low-wage Latin America. But instead of waiting for pink slips, Hathaway workers - mostly women deeply dependent on their
jobs and unable to move elsewhere - mobilized a protest, kindled support from local citizens as well as local, state and federal governments. Smith explores how a unique partnership saved a venerable institution,
and Waterville’s economy. Tom Allen, a Maine Congressman says the message to corporate America is simple. “Don’t just look at the numbers. The people who have been successful are betting on the work force.”
Some corporate leaders assert that old-fashioned virtues of loyalty, long-term job security, and Made-In-America are still good business. One of those, Smith learns, is Sidney Harman, founder and CEO of
Harman International, maker of world-class audio systems. Unlike many of his competitors, Harman refuses to locate his newest plant in Mexico, building it instead in Texas. He creates jobs for production workers
when demand for his products falls off. And he goes on the warpath when he learns that his managers have employed some workers for as long as two years, stilling calling them “temps” and denying them normal benefits
and job security. But the difficulties he faces as CEO show how hard it is to buck the uncompromising marketplace mentality of his managers.
At Newport News shipyard in Virginia, Smith makes an unusual
discovery of a strange but potent development in the new economy - unions investing their pension money in business both to protect jobs and to help out companies willing to join forces with their workers to be more
competitive. Smith learns that this movement is at an embryonic stage in the United States, but U.S. unions like the Steelworkers are looking to Canada, where one union investment fund has invested $2 billion in 600
companies, saving more than 50,000 jobs. Instead of letting Wall Street invest their savings with only return in mind sometimes putting union dollars into companies that are fiercely anti-labor unions
want to do that job. “It’s our money and we’re getting tired of getting hit over the head with it,” says Steelworkers Secretary Treasurer Leo Gerard.
A broader current trend in American industry is
workers giving up wages and benefits in major givebacks to help save the corporations they work for when the companies verge on bankruptcy. One classic example, portrayed in Beating the Bottom Line, is
Northwest Airlines, saved from bankruptcy in 1993 by $900 million in concessions from pilots, machinists and other unions. Once nicknamed “Cobra Airlines” because workers would strike at anything, Northwest is now
run cooperatively, from the shop floor to the board room. Building trust has not always been easy, according to pilot’s union representative and Northwest board
member Dwayne Woerth, but both sides are seeing the rewards of labor-management teamwork. And CEO John Dasburg is anything but traditional: He believes that capitalism, like Democracy, should have a Bill of Rights. “If you fail to do that, capitalism will fail.”
Finally, Smith visits Holland - a
country that does have a capitalistic “bill of rights” along with American-style efficiency and flexibility, and one of the highest rates of growth and worker productivity in Europe. Unlike the U.S., where worker
insecurity has been peaking even as the economy percolates along, Dutch society guarantees temp workers the same benefits as full-time workers and various forces in Dutch society cooperate in order to insure good
jobs for the middle class. Instead of seeing such guarantees as a weakness, the Dutch see such guarantees as a source of economic strength, high growth and worker commitment to help the country maintain global
competitiveness. In a statement sure to be provocative to many Americans, Klaas De Vries, President of Holland’s Social Economic Council asserts: “We believe that our welfare state contributes to our productivity
more than anything else. It gives an environment in which people can concentrate on what the important things are: Work, family life, societal life.”
Beating the Bottom Line, the concluding episode of the series Surviving the Bottom Line with Hedrick Smith, airs in January on PBS.
[Episode Four Transcript] [Woerth Transcript]
[Episode Four Credits]