Area executive urges firms: Resist layoffs

It was during a morning workout on his treadmill early last week that Steven Korman felt inspired to make a public appeal to business leaders:

Resist layoffs - even if that means smaller profit or a drop in stock prices.

The chief executive of Plymouth Meeting-based Korman Communities was watching Pfizer Inc. chief executive Jeff Kindler on CNBC discussing the drug company's planned $68 billion acquisition of Wyeth.

Korman, who owns Pfizer stock, grew peeved when Kindler said Pfizer would eliminate 8,000 jobs before the merger. If such cost-cutting news was welcomed by Pfizer shareholders, Korman did not share their glee.

By week's end, he had placed $16,000 in ads in the business sections of The Inquirer and the New York Times urging CEOs to "please keep your employees working."

"I have listened to the executives of many companies say that they are eliminating thousands of jobs to 'improve the bottom line,' " Korman's ad said. "I own stock in many of these companies and would prefer that the company make a smaller profit and [that] the stock fall, in the short term, rather than affect the lives of our neighbors and their families as jobs are lost.

"Please join me in reminding all CEOs that we are not just dealing with numbers and profit, but with real people and real families who need to keep their jobs."

He's not done.

Today, Korman is sending by Federal Express similarly themed letters to Kindler and the chief executives of 16 other corporations whose stock he owns. Those companies are Exxon Mobil, Apple, Google, Cisco Systems, Caterpillar, General Electric, Kraft, Nokia, Intel, Johnson & Johnson, EMC, Chevron, DuPont, Coca-Cola, Oracle and Dow.

"I just want them to stop for a second and think," Korman said yesterday during an interview at one of his company's short-term-housing properties just off Rittenhouse Square.

A spokeswoman for Pfizer said the company would have no comment on its layoff plans' having motivated Korman's campaign against job cuts.

The 69-year-old businessman and philanthropist acknowledged that his fourth-generation family business of 500 employees is privately owned and thus without the shareholder pressures that shape decisions at public companies.

That doesn't mean that he doesn't know what it's like to run a business in tough economic times, Korman said, noting that occupancy across the company's properties is "3 [percent] to 4 percent below normal" and that "we have a lot of good people who right now don't have a lot to do."

Rather than cut anyone's job, Korman said, the company "will make less money" until the recession ends.

Not above firing an employee for poor performance, Korman said he also has "no problem" with companies that have to resort to layoffs "to stay in business" - just those that say, "I'm dropping people to get our earnings up."

Although he has watched his own stock-market investments drop 40 percent in value in recent months, Korman said he would prefer that leaders of hard-pressed companies figure out how to tell their shareholders, "I'm going to keep [employees] working when my competition is not."

That's easier said than done, said John McCall, a professor of philosophy and management at St. Joseph's University, where he is also director of the Pedro Arrupe Center for Business Ethics.

"Given the Wall Street pressures and the quarterly return pressure, managers are going to have a hard time doing what [Korman] wants them to do," McCall said, "unless they can convince the shareholders this is in their long-term interests."

In the letter he is sending out today to CEOs, Korman says layoffs made for short-term gains could have damaging long-term results.

"If your company is making money and you cut these jobs, you are telling the world that you have no plans for future growth," the letter states.

Korman contends that every one of the 90 written correspondences he has received - most of them e-mails - since his ads first appeared Thursday has been positive.

His hope now is to get even just one CEO of a high-profile corporation to take a similar public stance against layoffs.

"They have a chance to do something special," he said.