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The Spectacle Blog
Google, the omnipresent web search and advertising company, purchased Motorola Mobility (the cell phone division of that venerable electronics company), in May of this year for about $12.5 billion. (The deal was originally announced in August, 2011, but it took the next nine months to receive the various necessary regulatory and international approvals.)
In a filing with the SEC on Monday, Google announced that it would lay off 4,000 Motorola Mobility employees (of whom about a third would be in the United States, and half of those in Chicago) and “close or consolidate about one-third of its 90 facilities.”
But if one of these unfortunate engineers or other Motorola employees has a spouse who loses health coverage, gets sick, and dies, don’t expect to ever hear a word from the media or anyone else about Google having any responsibility. (And Republicans, even those running PACs, won’t swim in the gutter slime which Bill Burton, Stephanie Cutter, David Axelrod, and Debbie Wasserman Schultz are so at home in.)
More importantly, don’t expect to hear a word from the mainstream media about the fact that creating efficiencies in business sometimes requires firing people.
After all, it’s supposed to only be the heartless, cancer-causing Bain Capital which would ever lay off a worker.
As for predicting the media reaction, all you need to know is that Eric Schmidt, the Executive Chairman of Google, is a huge donor to the Democratic Party and affiliated organizations. (To be fair, he has also donated to the GOP and a few Republicans, as any good crony capitalist must, but his heart and his biggest checks are all in for Barack Obama.) Similarly, Google co-founder Sergei Brin has donated more than $75,000 to the DNC and the Obama campaign just in the past 10 months.
A search at OpenSecrets.org of Google employees who have donated to Barack Obama in this election cycle turns up 349 records totaling about half a million dollars. Donations to the Romney campaign? Eight, for a total of $5,500. A search for contributions to the DNC turns up 41 records… totaling over $393,000. Indeed, of the 20 Google employee political contributions of $10,000 or more, the only three that went to the Republican Party were matched, by those same donors, with contributions to Democratic organizations. And all 12 contributions of $30,800 by Google employees went to Democratic Party organizations.
This means that coverage of Google’s firing of 4,000 people, including well over 1,000 Americans, will get the most gentle treatment, where it is discussed at all. Exhibit A: The New York Times’ story on the layoffs is entitled “Motorola Set for Big Cuts as Google Reinvents It.” Any bets on when later smears of layoffs at companies owned by Bain Capital will be described as “reinventing”?
H/T My friend who goes by the name “Airbus”
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More Blog Posts by Ross Kaminsky
http://spectator.org/blog/2012/08/13/i-thought-only-bain-did-that
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PCC| 8.14.12 @ 12:50AM
Not to mention Google's Nobel Peace Prize-winning, Internet-creating, Academy Award-winning, planet-saving billionaire senior advisor, the Algore.
spike59| 8.14.12 @ 5:44AM
i wonder if we'll be able to find any news of this using a Google news search???
Fiscal| 8.14.12 @ 8:50AM
Nice try, Ross, but while I agree that it's not negative to make a company more efficient, the point of the Bain attack is that they sucked the capital out of the company and then fired all of them. Google bought Motorola Mobility to integrate the business and grow it. There is no analogy here. No one is arguing that you shouldn't make companies more efficient.
I get the sense that you are a trader who doesn't care about how you're money is made as long as it follows the letter of the law. That mentality is the issue here and why this liberal argument has traction with not only liberals, but independents.
It seems that conservatives make the moral argument when it comes to abortion and gay marriage but forget morality when it comes to business.
This is the reason Romney is distancing himself from Bain and being defensive. In fact, Romney is distancing himself from virtually everything he's done except the Olympics. He doesn't talk about being governor either. He needs to be proud of what he's done and not ashamed of it.
fmm| 8.14.12 @ 9:57AM
You prove Kaminsky's points.
Trinacria| 8.14.12 @ 12:18PM
So to paraphrase, conservatives make money within the well defined boundaries of the law but do so immorally? It's legal - but immoral - for Bain to shut down unprofitable businesses (because, presumably, those businesses exist only for the purpose of providing jobs and not for the purpose of making a profit), but it's legal and moral for Google to purchase the assets of a competitor and fire it's employees because it will enhance efficiency (in other words, decrease costs and increase returns for it's investors)?
Tell you what, try selling that to the Motorola employees who lost their jobs...do you really think they make a moral distinction?
Fiscal| 8.14.12 @ 4:32PM
I knew there would be those who don't understand morality. Google is NOT putting a company out of business, it is making it more efficient. Google is also not taking the capital out of a company and putting it in their pockets. Google is INTEGRATING that company into it's structure. It is NOT firing all of its people.
In many cases, Bain would buy a company because there was capital in things like inventory and pensions, and then get debt from banks to leverage it and take the capital out and put it in their pockets. Once they made a profit, there was not enough capital left in the company to continue operations so it was shut down, all of the people fired, and the banks left with unpaid debt. And you don't see the difference between the two???
That said, Bain also put their capital into other companies and made them more efficient. I have no moral problem with buying a company, investing more capital and failing thereby shutting down the company. But I do have a problem with buying a company simply to take out the capital, line my pockets, and put people out of a job.
Kaminsky is a trader so he would have no problem doing the latter at people's expense. I certainly have a problem taking the capital out of a company and then leaving banks with unpaid loans -- and doing it on purpose. Yes, doing that is legal.
Trinacria| 8.14.12 @ 7:52PM
Again, I submit to you that there is no difference for the worker at Motorola who loses his job - the end result is the same. The fact that Google laid him off in the name of efficiency doesn't put food on his table anymore than it would if he were laid off in the name of investor profits (which, let's be clear, increased efficiency is designed to achieve).
That said, I didn't claim that what Bain did was moral and what Google did wasn't. Business isn't governed by morality, it's governed by laws - both statutory and economic.
If you want to have a discussion about morals, let's talk about the morality of the government confiscating nearly two thirds of what I earn and redistributing a significant portion to those who have done nothing to earn it. As I recall, no less an authoritative source on morality than the bible states that he who will not work shall not eat. So you can sell your morality crap somewhere else...we're all stocked up here.