We've already seen that they don't much likeGoogle (NASDAQ:GOOG) in France. Today, we hear that another U.S. tech giant, Hewlett-Packard (NYSE:HPQ), is the subject of some degree of French animosity -- though in this case, it's a lot easier to understand the anger. Joined by government officials, a few hundred protestors walked off the job on Friday to show their anger over recently announced job cuts that will shed about 25% of HP's French workforce. News reports of the protests got me wondering: Why is our reaction to this kind of news in the U.S. more often than not a yawn?
Is it because we just don't care? Or is it because we see the silver lining and "over there," they only see the clouds?
Before you all make with the angry email, let me explain my biases from the beginning. I'm one of the little guys. I've seen a job evaporate because of downsizing, and watched with pain as friends and family had to move on. It's no fun. It's worse than no fun: It can be a crushing blow. And I'm also one of those people who thinks that many managers who are in position to make these types of decisions -- like HP's ex rock-star wannabe Carly Fiorina, to pick on just one -- are atrociously overpaid.
I'm sort of the office pinko, really. But there's one thing I dislike more than great greed, and that's great ignorance, and only a major lack of understanding about economic cause and effect could lead us to believe that it's in our best interest to get our government in the business of protecting jobs.
Simply put, the freedom and necessity to adapt, even via unpleasant means, is one of the main reasons that our economy keeps steaming ahead while the folks in the old country watch their GDPs stagnate. Companies that can't adapt eventually go away for good. And those that can survive just limp along.
Indeed, entrenched labor's inflexibility on benefit claims against GM (NYSE:GM), Ford (NYSE:F), and the formerly American DaimlerChrysler (NYSE:DCX) and the carmakers' inability to adapt are among the major reasons those firms are just scraping by. (For the record, I blame management for this problem too, at least starting it. These giant retirement packages were instituted at a time when accounting rules kept them out of the earnings calculation, thus allowing management to attract employees while hiding much of the future cost. Big surprise, it came back to bite them.)
We're undoubtedly going to see more hurt for our fellow Americans as two of our major airlines, Delta (NYSE:DAL) and Northwest, run through bankruptcy. As hard as that is, we need to look toward the resiliency of the same system that can seem so harsh.
One of the reasons the American economy can rebound from massive layoffs is that same flexibility. Our economy creates jobs precisely because businesses know they can uncreate them, should they need to. Contrast this with the situation in Europe; in this case, Germany. Take only one example, provided to us at Fool HQ by German reporter Olaf Gersemann, author of Cowboy Capitalism, considering the effects of the employment "protections" afforded German workers.
If a German company wants to shed an underperforming division, it can't just get rid of the people in the division that's the dead weight. It has to drop people by seniority, regardless of whether the individual will be able to make a meaningful contribution to the streamlined entity.
So what's the end result of this "job security?" Fewer jobs. Less security. It's simple. Business owners are reluctant to hire people because they don't have the flexibility to shed them later.
So yes, capitalism taketh away. But it also giveth. Which is why America produces more Hewlett-Packards, Googles, Apples, and Intels (NASDAQ:INTC) than any other country in the world.
For related Foolishness:
- Speaking of shortsighted government intervention, here's a really bad idea.
- Ze Google, she scares me.
- In case you hadn't heard, CEOs are rich.
- Revisit ex-HP CEO Carly Fiorina on the edge of reason.
- Millions weren't enough to keep Boeing's former CFO on the straight and narrow.
- Carly's rock-star performance wasn't enough for the board.
Seth Jayson knows that the going can get tough, but he also knows that's when the tough get going. At the time of publication, he had no position in any company mentioned here. View his Fool profile here.
