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How fares Circuit City after its mass terminations? Not so well Date published: 6/22/2007
CERTAIN CONSERVATIVES gnash their teeth over the prevalence of left-wing teachers in the nation's colleges. Save your enamel, gentlepersons of the right. Our hunch is that the unpenned swinishness of many of the nation's corporate chieftains is creating more nascent Reds than a gross of professors thumping "Das Kapital" at freshmen.
Philip Schoonover of Richmond-based Circuit City, for example, is heroically administering artificial resuscitation to the still form of Karl Marx. In March, Mr. Schoonover announced the firing of 3,400 of Circuit City's most senior store workers--some had put in more than 10 years of service--and their impending replacement by 3,400 people hired off the street at a lower wage. The CEO took the American Dream--that vital national myth incorporating values such as loyalty and fairness--gutted it, and turned it inside out. In the corporate world, this is called "being tough." But Mr. Schoonover, backed by a fawning board of directors, wasn't very tough on himself, though he had presided over falling profits and market share. The AP in early June put his total annual compensation at $17.1 million. Was he rewarded for poor management? If so, the incentives seem to have worked. Circuit City this week reported a net loss of $54.6 million, or 33 cents per share, for the quarter that ended May 31. Also, notes the Richmond Times-Dispatch, the company experienced "the first drop in overall sales in more than three years." Let's see. March, April, May--the period covering the quarter of the mass firings. Could it be that those experienced workers whom Mr. Schoonover cashiered took something of value out the door with them? Might potential Circuit City customers have smelled in the wholesale terminations not a fragrance of managerial genius, but the stench of a decadent desperation? No one wants to shop in a slaughterhouse. Circuit City under Mr. Schoonover has maltreated thousands of good working Americans. It has provided customers with less seasoned sales assistance. It has allowed its stock value to plummet. This all gives capital a bad name. Sorry, Professor Loveleft, you've met your match in Philip Schoonover.
I'm amazed none of our resident conservatives have come to the defense of Circuit City's CEO or Board of directors. You'll defend Karl Rove and Ann Coulter with your last breath but you have nothing to say for this guy??
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