Civic Empowerment in an Age of Corporate Greed

Civic Empowerment in an Age of Corporate Greed

Edward C. Lorenz
Copyright Date: 2012
Pages: 350
https://www.jstor.org/stable/10.14321/j.ctt7zt79c
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  • Book Info
    Civic Empowerment in an Age of Corporate Greed
    Book Description:

    A thought-provoking investigation of an urgent issue facing American communities today, Edward C. Lorenz's book examines the intersection of corporate irresponsibility and civic engagement. At the heart of this case study is a group of firms responsible for seven of the most contaminated Superfund sites in the United States, the largest food contamination accident in U.S. history, stunning stock and financial manipulations, and a massive shift of jobs off shore. In the face of these egregious environmental, employee, and investor abuses, several communities impacted by these firms organized to confront and combat failures in corporate and bureaucratic leadership, winning notable victories over major financiers, lobbyists, and indifferent or ineffective government agencies. A critical analysis of public and private leadership, business and economic ethics, and civic life, this book concludes with a stirring blueprint for other communities facing similarly overwhelming opposition.

    eISBN: 978-1-60917-322-7
    Subjects: Business, Environmental Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-v)
  3. Preface
    (pp. vii-x)
  4. Introduction
    (pp. 1-20)

    While innumerable historic examples exist of abuse of individual power and excessive self-interest, early twenty-first century global financial crises illustrate that such abuses can impact large numbers of people and communities. Individual excess transitioned into a fundamental societal problem when its pathologies were magnified in corporations no longer properly controlled by either civic processes or cultural norms. As the new century’s financial crises unfolded, a common error of analysis focused on relatively recent changes in law or policy that encouraged imprudent behavior, such as the repeal of bank regulations in the previous decade.¹ The problems that became evident in the...

  5. CHAPTER 1 Corporate Leadership Problems
    (pp. 21-58)

    On December 29, 1999, Fruit of the Loom, the underwear giant, filed for bankruptcy protection in Wilmington, Delaware. What had gone wrong to turn the owner of one of the world’s best-known icons, the Fruit of the Loom trademark, into a financial failure? Its CEO until early in 1999, William Farley, had once boasted that he would reverse the decline in U.S. manufacturing jobs; yet, in the mid-1990s he had begun moving thousands of jobs out of the United States to Central America. He even shifted the corporation’s legal headquarters from the Sears Tower to the Cayman Islands. One business...

  6. CHAPTER 2 New Corporations and New Regulations
    (pp. 59-84)

    On June 14, 1965, the Chicago and North Western Railroad (C&NW), headed by Ben Heineman, confirmed rumors of the previous month, announcing that it was buying Velsicol Chemical from the Regenstein family.¹ Velsicol now joined the same type of corporate structure that housed Fruit of the Loom and Union Underwear. Heineman was in the early stages of moving North Western from being a railroad into being the name for a holding company controlling a conglomerate. While there had been holding companies for nearly a century, the new feature of firms such as the North Western was that they controlled subsidiaries...

  7. CHAPTER 3 Disempowering Communities
    (pp. 85-110)

    If Velsicol’s sole problem in the 1970s had been the one in St. Louis, Michigan, the firm might be seen as the unfortunate victim of an accident. If the deals that shut the St. Louis plant were the only ones signed by the firm, Northwest Industries might have been regarded as a model of corporate propriety with one blemish on its record. As an individual political actor, Heineman continued to support leaders in environmental protection.¹ Yet, a cursory review of the era’s news revealed Velsicol as a repeat offender, driven by corporate policy not just to cut costs on environmental...

  8. CHAPTER 4 New Management
    (pp. 111-132)

    It was not surprising that Ben Heineman paid little attention to Velsicol except after crises that had festered for years. Throughout Heineman’s ownership, Northwest repeatedly faced the challenge of staying ahead of the creditors. Since many of its subsidiaries resembled Velsicol in their liabilities, the preferred way to pay debts was to buy new firms, refinance the conglomerate, and use short-term profits to diminish the mounting losses. However, although Heineman pioneered the conglomerate style, he did so with moderation, always keeping debt within bounds so he could serve with honor on presidential advisory panels and various boards, such as that...

  9. CHAPTER 5 Creating Junk
    (pp. 133-154)

    The fundamentals of Farley’s methods of operation were so typical of the behavior of a large class of American entrepreneurs that few business leaders would criticize him, until it was too late. By contrast, the people at West Point, Georgia, noted two dangerous features of his methods as soon as they encountered him. One was his excessive debt, which would be a hallmark of both private and public finance at the start of the new millennium.¹ The second was his willingness to abandon established manufacturing facilities and experienced work forces in order to gain short-term financial benefit. The tragedy of...

  10. CHAPTER 6 Importing Fruit
    (pp. 155-184)

    Similar to the troubles at Acme and Doehler, after 1990, the problems at Fruit of the Loom devastated communities, workers, and investors. As happened with the other subsidiaries, neither the media nor pubic officials got the story right until too late. After the loss of control of West Point, Farley especially needed to advertise Fruit’s economic viability and contribution to communities—but that is an explanation, not excuse for civic and media leaders who failed to notice ruin as it approached. Their acceptance of neoliberal ideology blinded them to the causes of abandonment of U.S. manufacturing and massive shifts of...

  11. CHAPTER 7 Experts and Local Knowledge
    (pp. 185-210)

    Fruit of the Loom and its subsidiaries, by transferring work overseas, instigated the theft of jobs at home and the loss of technological expertise to benefit a few incompetent managers. In contrast, Velsicol symbolized the looting of natural resources in the name of technological innovation. Consequently, while the former firms received a pass for many years from the business press and the finance community, Velsicol was overlooked for criticism by fellow technical experts, including those in regulatory agencies. If its exploitation of the community had ceased in 1986, the common link would have been ownership by Bill Farley and his...

  12. CHAPTER 8 Consequences and Controls
    (pp. 211-232)

    The history narrated in this inquiry exposes corporate leadership failures and some institutional pathologies that require clarification and study. It recounts more than the rise and fall of a chemical, boot, underwear manufacturer. It also details social, intellectual, political, environmental problems, as well as the assumptions that underpin much modern behavior and the structures of many contemporary institutions. As exemplified in the three generations of Fruit of the Loom directors, predecessors, and its subsidiaries, some practices have become so outrageous and some ideologies so contradicted by reality that they clamor for reform. On the positive side, this investigation uncovers a...

  13. Notes
    (pp. 233-306)
  14. Bibliography
    (pp. 307-326)
  15. Index
    (pp. 327-332)
  16. Back Matter
    (pp. 333-333)