Thousands of American companies are creating jobs and increasing sales at record rates. But with the exception of Facebook, not one is represented on President Barack Obama’s Council on Jobs and Competitiveness.
The CEOs who serve on the commission are a who’s who of big, lumbering companies that are resistant to change and slow to grow-General Electric, Intel, Proc-ter & Gamble, Citigroup, American Express, Southwest Airlines-plus the former top executives of AOL and Time Warner.
The president picked his commission members the same way lots of people pick their stocks: He just assumed that big names are good investments. They are not.
Eastman Kodak Co. is the latest dismal example from the president’s jobs council. Just last week, stock of this onetime industrial giant sank 54 percent in one day. Though its price rebounded on Monday, the stock is down more than 75 percent from the beginning of the year.
If I put this stock into the portfolios of widows, orphans or pension funds, I would go to jail.
While we do not need to pick on Kodak for losing the race to adapt to modern markets, neither should we rely on Kodak to advise us on exactly what it cannot do for itself.
Many of the other commission members differ from Kodak only in degree, not quality.
GE, for example, has returned minus 6.6 percent a year to its investors over the last 10 years. Its CEO, Jeff Immelt, heads the president’s commission and regularly makes news for taking federal bailout money and paying almost no corporate taxes.
The commission members who used to be CEOs at AOL and Time Warner made business history by engineering the worst merger ever.
Southwest may be a good airline, but it has lost 4 percent a year for the last 10 years. That’s dividends and share price together.
Even before its recent stock dive, Kodak was losing value at 20 percent a year over the past decade.
Citigroup received one of the biggest financial bailouts in history. I’m not sure what its CEO is doing on the commission. Is Citigroup?
A rogue trader at UBS-another commission member-recently lost $2 billion of the company’s money, tarnishing the reputation of the onetime giant of the banking industry and causing the European CEO to resign.
These are the people who are advising our president on how to create jobs? No wonder the unemployment rate has barely budged for months.
These are tough times, no doubt. But some companies are thriving in tough times and making money for their shareholders. Here are just a few:
- Autozone is growing and hiring because its CEO figured out that people are replacing mufflers and tires rather than getting a new car.
- Apple, of course, is a shining example of the best of America.
- CSX is one of America’s largest railroads. Next time you see one of its trains barreling down the tracks, just imagine it is carrying jobs and money, because it is.
- Most people know Priceline from the commercials featuring William Shatner. It turns out that Shatner, who took stock options from Priceline, knew a heck of a lot more about investments than all the other financial and political talking heads.
The list goes on and on: Green Mountain Coffee, Panera Bread, Continental Resources. America has tens of thousands of companies, public and private, that have figured out the jobs and growth question.
They are too busy making money to serve on make-work, do-nothing commissions. That doesn’t mean we should be too busy to learn from them.
Bill Gunderson is owner of Gunderson Capital Management in Oceanside, Calif. He hosts a show about investing on KCEO-AM in San Diego.
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