Jones' column overviewing the takeover of a lumber mill and subsequent disdain for the employees and rape of the environment is typical of the results of LBOs.
History does not support that LBOs result in more efficient and competitive companies benefiting employees, stockholders and the general economy. Were that the case, our country would begin building better quality products and generating more innovative ideas for the marketplace through research and development.
The real motivation for LBOs is greed. But this greed is not limited to the Milken variety of predator. They take full advantage of the greed of senior executives who create golden parachutes while many employees lose their jobs, pensions and insurance. The stockholders' greed is evidenced by their desire for short-term profits. It is time we stopped hand-wringing about the rape of our industries and begin taking action.
ESOP is one method of getting involved as the lumber company employees hope to accomplish by buying back their company. Stockholders should profit on their investment but why not help by getting more involved. Ask questions about the company's ability to compete by turning out a better quality product. Is it making a long-range commitment to R&D; rather than an excessive concern with next quarter's earnings?