I am absolutely lost at words today. It’s not that I don’t have anything to say, in fact it is quite the opposite. I just don’t know what I should say. Back in June 2010, I went through the painful process of being downsized at Herman Miller in Zeeland, Mi. I was a dedicated member of management for 9 years and I honestly feel I gave the company everything that I could. I held my head high as I walked out the door for the final time and reminded myself that the risk of downsizing is part of being middle management in today’s business world.
I also want to state that HMI is a great company that treated me with great respect throughout my entire time with them. I have never worked for another company that truly cares about their employees as much as they do and I would go back there in a heartbeat. So, what has me speechless? Imagine my surprise when I turn on the news to find out that HMI is up for a major state tax credit for creating 600 new jobs. I just lost my job 5 months ago and now the state of Michigan is going to give the same company a tax credit for hiring 600 new jobs since orders are finally increasing? I am confused.
This isn’t the first time the wonderful state of Michigan has done this. Within the last two years they did the same thing for Haworth Inc. Haworth is another office furniture maker in Holland, MI that had just closed their Allegan, MI chair plant. It almost seems like our politicians want to entice our local businesses to eliminate jobs simply to reward them later for hiring “replacements” when business picks back up. Ironically, I can find no reason at all to blame the companies that are taking advantage of these tax advantages. It is simply smart business on their part. I do however have a major issue with the state handing these credits out.
In a couple of my posts I have referred to what Toyota did in the beginning of the recession. They took the opportunity to train their employees and make process improvements rather than lay them off. Why isn’t the state of Michigan offering incentives for actions like that. To me that is a better situation for all people involved and that includes the shareholders. Let’s look at the cost associated for the companies between the two scenarios.
I, like the many others that were let go, over 600 per The Holland Sentinel, were given severance pay. During that severance time, the company also graciously continued our medical, dental and vision. That is some major dollars for people that are not contributing to the company. After that, the state of Michigan begins to pay unemployment which can extend for up to two years. So bottom line, the company and the state are both paying out tons of money for people who are looking for work. Within two years, the state is then paying out major tax credits to companies to rehire people. I can tell you as a member of management, chances of myself ever being brought back is slim to none and I understand that. That goes with the job and is part of being management. I do know from word of mouth almost all of the hourly people have been called back to work.
Two years is a long time for people to be out of work. Especially when a company has been in a major cost cutting mode. Bottom line, there is going to have to be a lot of time attributed to retraining those employees as well as any new people joining the company. Training is a major expense that is often neglected since business picks up quickly and time is money. This adds into quality issues, safety issues and definitely productivity issues. Wouldn’t it make more sense to give these “credits” to the company for retaining their employees for training and improvements? That way when business does pick up, they are ready for the influx of business and even more profitable.
This also helps out the state. It eliminates all the unemployment benefits being paid out and most importantly, it keeps people at work!!! This generates revenue for the state and frees up resources that could be used for better things.
I have been involved in the office furniture business for over 15 years. Without fail, the industry takes a dive every seven or so years. This past recession really hit the industry hard and there is nothing we can do now but look back and arm chair quarterback the decisions that were made. My hope would be that when the next slide hits, people will be willing to look at things differently and try a different approach. Especially our politicians!!! It still amazes me that the US government paid out billions of dollars to Savings and Loans which did nothing for keeping people employed, in most cases it simply extended the agony of people losing their homes and way of life.
As for my thoughts on Herman Miller. Are you ready for the rants and raves of an ex-employee? I wish them the absolute best of luck!!! They are still a great company with an incredible leadership that makes very tough decisions when they have to. I hold nothing against them and I actually appreciate all they have done for me and my family these last nine years. If I were in their shoes, I would have done the same thing and that is the reason I still hold stock with them. As for our state representatives? They’ll find out this November!