In our inbox, from a long established reader. Although the plural of anecdote is not data, we’ve heard stories from Americans working (not happily) for financiers cut from similar cloth to the US management described below. But the openness of the looting is still striking. Private-equity-style asset stripping looks to be the new vogue against get-rich wannabes.
My client experience in Continental Europe is extremely limited, but I had a tiny project with the owner of a Mittelstand company, a family business which made high energy efficiency heaters and coolers that sold particularly well in emerging economies because they had some advanced technology that allowed them to sell a decent quality product at a price that consumers and businesses in lower-income countries could afford. He had a long-term perspective that stood in stark contrast to American management. He also very much regretted that he’d had to whittle down his German workforce though attrition and locate more of his manufacturing abroad for cost reasons. That sort of attitude would be regarded as a rich man’s eccentricity here.
A friend of mine runs a medium size manufacturer in a not-wealthy part of Europe. It’s foreign owned, by a family office. The family office was looking to buy a part of a struggling US company that my friend believes he can, with his know-how, make viable again (basically, even allowing for different labour costs, he believe he can run the manufacturing more efficiently).
They talked to the US management, who has been brought in not that long ago. And was totally flaberghasted. He told me “I’ve heard that you find more psychopaths in the top management than anywhere else, but never believed it until I met those guys”. Basically (according to him), they see the company as a cow to milk while they can, then sell the carcass and move on to another job telling everyone how great they were at running it and how well they sold it in the end.
My friend is totally out on this. He and his business contacts have seen of the most wild-west privatisations around, but he runs the company very paternalistically. Few years back there was workplace accident, where the company supported the families way more than it was legally obliged to. None of this is a public knowledge though. When a girlfriend of one of the debilitated men was trying to damage the company for not giving her anything (they paid other relatives who’d lived with him, this girlfriend was recent and had not moved in), and was doing everything she could to damage his reputation, I said “why don’t you ask the other guys to publicize what you did for them?”, his answer was that those families had already suffered enough, while the company had people who were paid to deal with shit like that.
So he was entirely unable to understand the US guys (he was, on the rational basis, but not on any sort of moral one). But what he really doesn’t get is the shareholders and the banks, as he thinks that if he’s able to see through them, they should be too, and get them out first thing they can.
He had more comments on the US management, He was surprised, and a bit angry, on how much the management cooked the books they gave them (to inflate the value of the company). Because all of it was extremely obvious (basically he said, all of it would be disputed, and they would have to drop it – it would just take a lot of time). I don’t doubt that people do cook the books, but he was commenting on how obvious (and, while he didn’t say it, I think he though it, amateurish, or maybe contempt for non-US?) it was.
I’m not saying he’s a good average example of a manager in the Europe, but he happens to have a lo of business relationships with senior managers in central Europe. By his reaction, this was so much out of what he’d expect that I doubt he ever saw anything like that.