Monday, September 19, 2016

THE MEGA CORP - Are They Going the Way of Dinosaurs?

"Will mega-corporations give way to a local manufacturing renaissance?" PBS NewsHour 9/15/2016


SUMMARY:  Big companies today aren't creating nearly as many middle-class jobs.  Instead they're hiring out much of the work to contractors around the world.  But what if we could reverse engineer our technology to bring about a new era of local manufacturing in the U.S.?  Economics correspondent Paul Solman talks with Jerry Davis, author of the new book “The Vanishing American Corporation.”

PAUL SOLMAN (NewsHour):  A must-see stop on the grand tour of decaying Detroit, the plant that, for decades, clanked out auto chassis for GM.

GERALD DAVIS, University of Michigan:  General Motors at its height had 900,000 employees, career ladders galore.  They were providing a lot of benefits, creating good middle-class jobs.  GM today has about 220,000 employees around the world.  It's about as many as it had in 1928.

PAUL SOLMAN:  But sociologist Jerry Davis says the GMs of yesteryear, though models of productivity and even of economic equality, are history.

JERRY DAVIS:  What happened to General Motors didn't just happen to General Motors.  There are about half as many public corporations today as they were 20 years ago.

PAUL SOLMAN:  So, instead of General Motors, U.S. Steel, Eastman Kodak, and I could go on and on, what have we got?

JERRY DAVIS:  The big corporations today don't really have that many employees.  They're not providing career ladders.  They're not creating middle-class jobs.  Blockbuster had 80,000 employees and 9,000 stores across the country.  Netflix does the same thing with fewer than 4,000 people.

If anybody tells you they work at Facebook, probably they mean they are a contractor, because only about 12,000 people actually work at Facebook.  They are worth $300 billion, but very few people actually work there.

PAUL SOLMAN:  In a new book, Davis calls it the vanishing American corporation and poses a pivotal question:  What will rise from the wreckage?  Mega-firms that hire relatively few workers?  Made-anywhere product peddlers like Nike?

JERRY DAVIS:  They're the biggest sneaker and sporting goods company in the world, but they don't actually make most of the stuff with their name brand on it.  They design it, they market it from Oregon, but the production is done by contractors all around the world.  And that model is spread widely.

It's not just sneakers, it's not just garments.  Electronics, pharmaceuticals, pet food, you name the product, and you can find somebody to manufacture it and put your name on it.

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