The Book of the Week is “Taken For A Ride, How Daimler-Benz Drove Off With Chrysler” by Bill Vlasic and Bradley A. Stertz, published in 2000.
This was a story not atypical in many ways, of any 1990’s merger between two big-name public companies. One difference, however, was that one was American (Chrysler), and the other, German (Daimler-Benz). Thus, there was the additional difficulty of minimizing employee friction in connection not only with the different corporate cultures, but with the different national cultures.
Another difference was that Daimler and Chrysler weren’t direct competitors– product-wise demographically or geographically, so there was little personnel duplication between them. So minimal employee layoffs were in order.
Initially, Kirk Kerkorian was a major shareholder of Chrysler. In April 1995, his group Tracinda made a tender offer for all of Chrysler, but unwisely publicly admitted it had yet to line up the financing for purchasing the company. The news brought out all the greedy stakeholders: Tracinda’s people, and institutional and individual shareholders of Chrysler. Other parties to the possible transaction included investment bankers, and consultants of various kinds– image, financial, M&A, and legal.
The media stoked public anger at Tracinda for its poor planning (which might have been deliberate, to rattle the target). The Wall Street Journal made the emotionally charged claim that Kerkorian would saddle Chrysler with a heavy debt load if his bid was successful. Of course, regardless of success, he knew he would boost Chrysler’s share price and make more money for himself.
There were various times when different male corporate leaders became angry at others, usually when they felt they had or were going to get, less power or money than they thought they deserved.
For example, anger was directed at Lee Iacocca, former turnaround artist of Chrysler around 1980. At the time of the Kerkorian affair, he was a paid corporate consultant to Chrysler but contracted with Kerkorian, too. So Chrysler revoked the stock options he still had. “He [Iacocca] was… madder than a hornet when he heard he would get only $42 million…”
By the mid-1990’s, auto industry executives knew their companies would be swallowed up by bigger ones if their own companies didn’t make acquisitions or team up with their competitors.
One other possible way to expand was to try to sell cars to Third World countries like Vietnam. However, the bulk of those Asians– who were still farming and fishing– would need to save their entire annual salaries for forty years (!) if they wanted to buy even the lowest-price Chrysler car, the Neon. Besides, their country still had few paved roads, anyway.
In summer 1997, the timing just happened to be right for Daimler and Chrysler to get together with a stock swap (rather than a tender offer– buying the stock from the shareholders to cash them out– make them no longer owners of the stock). Nevertheless, the months-long merger talks had to be kept secret because if the news was prematurely leaked, Chrysler’s stock price would skyrocket, making a deal prohibitively expensive.
Read the book to learn what, in summer 1999, prompted the following: “His aides had never seen Kirk Kerkorian so mad. In two days he lost almost $600 million on his Daimler Chrysler stock” plus all the other details of the whole story.
The Book of the Week is “Whittaker Chambers” by Sam Tanenhaus, published in 1997. This large volume described a situation that lends itself to the hypothetical board game “Survival Roulette: Alleged Commie Edition” (See “Blind Ambition” post).
Alger Hiss and Whittaker Chambers were just two of thousands of people starting in the late 1940’s who were losers of this game. The winners actually won only temporarily: Joe McCarthy, Richard Nixon and other bullies.
The board’s spaces could describe wiretapped conversations of such evil Commie fronts as the Boy Scouts, and dossiers acquired through the Freedom of Information Act in which every word of every page has been redacted (blacked out) except the names of the 205 guilty State Department officials.
Of course, there could be spaces such as “Go to the Electric Chair” and “IRS Audit.” A “Commie Chest” (rather than Community Chest) card, for instance, could say “Collect $1 in a libel suit while your attorneys collect $50,000.” By the way, any player wearing a red necktie is a Commie.
Chambers, born in 1901 in Brooklyn, was accepted to Columbia University in 1920 through, at that time, simply passing an intelligence test rather than taking entrance examinations. He was fluent in several languages and was a skilled writer. As a commuter from Lynbrook in Long Island, New York, he paid only the school’s annual tuition of $256. The following year, living on campus, he also paid room and board of $400.
As a sophomore and rebellious intellectual, Chambers penned an offensive, blasphemous piece for one of a few campus publications for which he wrote. Fierce critics forced him to take a leave of absence from the school.
In the next several years, he traveled around Europe, came home, held short-term odd jobs he obtained through friends, returned to school, rode the rails out West, etc. in an effort to find himself; also in an attempt to escape his dysfunctional family. According to the author, Chambers suppressed his homosexual urges by having affairs with women.
In the course of his voracious reading– a lifelong passion– Chambers discovered a speech of Vladimir Lenin called The Soviets at Work. In it, Lenin advocated violent authoritarianism. Curious factoid: a line in the speech is reminiscent of a line in the Elton John song “Yellow Brick Road” paraphrased: “… where the dogs of society howl… I’m going back to my plow…”
Anyway, in February 1925, Chambers joined the Workers Party of America, a then-illegal political party that espoused Communist ideals. Its American members numbered about sixteen thousand. He also joined the International Workers of the World.
In the spring of 1927, Chambers was found to have stolen tens of books from Columbia University’s libraries and various other libraries. He was proud rather than ashamed. He wrote articles for The Daily Worker and other Communist publications, got a short story published in The New Masses, that was turned into a play performed internationally.
Some Americans became Communists because they felt that capitalism was the cause of the Great Depression— with its breadlines, labor unrest, suicides, protests, etc. In spring 1932, Chambers joined the OGPU– the Soviet agency that eliminated anyone who expressed the least negative thoughts about Comrade Stalin or his ilk.
Chambers was a valuable addition, as he had experience in bureaucracy, was fluent in German and Russian and literate in the Classics. The American chapter of the Party forced him to become a secret agent man.
But it was fun to play adolescent-boy spy games. And the pay was really good. He played well with others. He and his comrades got secret messages in invisible ink and microfilm from the Germans in their safe house on Gay Street in Greenwich Village. They spied on businesses and the military. He helped steal blueprints for weapons to be built by military contractors, and sent them to the Soviets.
In summer 1934, Chambers was relocated by the Soviets to Washington, D.C. to become a New-Deal advocate for sharecroppers and tenant farmers, who were opposing landowners and big growers in the agricultural industry.
Then Chambers started assisting with generating false passports to be used by his comrades. The initial step was to comprehensively extract information (such as birth dates and names) from the archives of obituaries of babies, in the research branch of the New York Public Library (yes, the one with the lion statues in front).
A birth certificate was then the only proof of citizenship that was required to obtain an American passport, which allowed the easiest travel. The above information (reflecting the then-age and gender of the agent who traveled internationally) would be used to apply for a fraudulent birth certificate, which could then be used to obtain a fraudulent passport.
The Party headquarters was in the U.S.S.R., though, and was the ultimate boss. It could shut down a cell if it saw little productivity. For example, an agent was reassigned to Riga (equivalent to Siberia). But before the transfer, the agent did win the handball championship at a YMCA in the closed Tokyo cell.
Across the United States, there were plenty of organizations posing as Communist fronts, such as a literary agency in San Francisco, the Unemployed Council in Queens county in New York State, and the Federation of Architects, Engineers, Chemists and Technicians. Chambers used a series of aliases for himself, his wife and daughter with each new assignment.
Changes were always afoot. In the mid-1930’s, the OGPU became the NKVD. Chambers’ boss was purged by Stalin. His highly-strung new boss reflected the Soviet mentality of proactively engaging in an act of generosity to butter up his new office in Washington, D.C. He therefore gave it a large cash gift that was used to purchase Oriental rugs to be given to the top operatives there.
In December 1936, the Soviets considered Germany, Italy and Japan their fascist enemies. The United States, France and England were passively standing on the sidelines. Chambers’ new mission was to, with the help of comrades, procure stolen original State Department documents, take photos of them, and return them, turn the photos into microfilm, and send it to Moscow. Although the documents usually didn’t contain anything world-shaking.
Nevertheless, circumstances were getting dangerous for Chambers. He was considering withdrawing from the Party, but then he and his family would have to disappear. He didn’t want to end up like Ignace Reiss, a “…well dressed corpse, perforated with bullet holes.” In spring 1938, he took the plunge and went into hiding. About a year later, he was able to get a job through a friend at Time, Inc.
Chambers knew the NKVD could kill him or harm his family at any time. Besides that, he could be convicted and imprisoned for treason, and he couldn’t afford to flee. So in September 1939, he turned state’s evidence instead. He named names of Treasury Department and State Department members and discussed the U.S. military’s Communist spy ring.
Into the 1940’s, Chambers continued to work around the clock at Time, Inc., where he received an obscenely high salary for his new rabidly anti-Communist editorial bent. His intuitions were correct, however. He knew that the Soviets had designs on world domination.
In August 1948, Chambers was subpoenaed to appear before the House Un-American Activities Committee (HUAC). Reputable officials and journalists were angry that in a public hearing, Chambers claimed that Alger Hiss, a high-level State Department official had been a Communist in the 1930’s. Hiss’s integrity had been irreproachable up to that point. The then-freshman Congressman Richard Nixon (R., CA) was the only member of the Committee who insisted on continuing the case against Hiss.
Initially, Chambers couldn’t name anything Hiss had done that was illegal. For, Party membership hadn’t been illegal in the previous decade. Neither had paying Party dues, nor meeting with other Communists.
However, with circumstantial evidence that Chambers produced in his own sweet time, he was able to convince the authorities that Hiss had lied under oath. Another crime that Hiss might have been punished for, was espionage. Fortunately for Hiss and Chambers, the three year statute of limitations on that had expired.
Political accusers always seem to scream about risks to national security!!! But it has become a cliche that more often than not, documents have been labeled top-secret, not to become declassified for decades– in order to cover up government’s bad, embarrassing behavior, NOT because American lives are at risk.
For approximately the last seventy years, on and off, vicious political vengeance has been the norm– best interests of the country be damned. However, the punishments haven’t fit the crimes. The most guilty and least punished perpetrators have acted in ways that have resulted in needless deaths and ruined lives.
Who knows what else Hiss did– making love to an intern in the Old Executive Office Building? He did get caught lying under oath.
Based on lies, the most guilty perpetrators have led the United States to attack other countries and smeared their political opponents for their own selfish political and financial ends. At least they didn’t get caught lying under oath.
Anyway, as is common with these kinds of situations, different government agencies are fighting to grab glory for bringing the perpetrators to justice. In the Hiss case, it was the Justice Department, the U.S. Attorney’s Office for the Southern District of New York, and HUAC.
Individuals such as Nixon and Robert Stripling, the chief investigator of HUAC, were also jockeying for power and bragging rights. Then-Supreme Court justice Felix Frankfurter testified on behalf of Hiss, an unprecedented move, and possible conflict.
Read the book to learn why Chambers wasn’t also tried for lying under oath, even though he was the biggest liar in the world; every ugly detail of the Hiss case, and much more about Chambers’ life.
The Bonus Book of the Week is “Lewis Carroll, A Biography” by Morton N. Cohen, published in 1995.
Born into a family whose children eventually numbered eleven, in January 1832 in Cheshire (England), Carroll was given the name Charles Lutwidge Dodge. His father was curate of the local parish.
The headmaster of “Rugby”– the boarding school Carroll attended (which gave rise to the eponymous sports game), couldn’t “… rid the school of drunkenness. The boys were served beer with their meals– water was unsafe– and from beer to strong libations is not a long leap.” Rugby was considered England’s best public school (in America this means an elitist private school) at the time.
Carroll endured the usual abusive hierarchy (frat boy behavior) that occurred at such a place for nearly four years. Later, he was accepted to Christ Church, at Oxford University. Students from wealthy families brought their hunting dogs to school, and continued their shooting and riding, as they had at home. Academics were way overrated.
Carroll, however, majored in and got high grades in mathematics. After graduating, he became a math tutor and lecturer. But he got upset when he saw freshmen who were ignorant of material he thought they should have already learned.
In an attempt to cover up this embarrassing truth, in April 1864, the school administration proposed lowering its standards, and finally succeeded in doing so in February 1865. In protest, Carroll resigned as Mathematics Examiner.
On another topic, of course, Carroll became best known for Alice’s Adventures in Wonderland. It started in July 1862, as an extemporaneous story he made up about Alice Liddell, one of the middle daughters (about twenty years his junior) in a large family full of them. He became quite close with the girls socially, accompanying them on walks, picnics, boating outings, in playing croquet, etc.
Nearly a year later, he rode a train alone with the girls– who were without their usual adult supervision. Shortly thereafter, their mother forbid Carroll to see them. Wild rumors swirled around the mysterious incident; the page on which Carroll wrote about this in his diary was removed– lost to history– by his niece.
As an amateur photographer, Carroll had been taking photos of his aforementioned unnaturally close friends, as well as daughters of other families in his community. In spring 1867, he began taking photos of girls in the nude.
Read the book to learn of all of the details about the above, other highlights of his life, and how the “Alice” stories evolved into an enduring piece of work.
ENDNOTE: Curiously, the author of Peter Pan, J.M. Barrie, befriended a family of sons. He took an especial liking to a middle son, Peter, about which he made up stories at the dawn of the twentieth century. Both Alice and Peter Pan have been enjoyed in various incarnations internationally for decades and decades. Parallels can be drawn between their authors. The stories must therefore delve into the deepest, truest universal aspects of human nature. That must be why they are still classics.
The Book of the Week is “Ten Green Bottles, The True Story of One Family’s Journey From War-Torn Austria to the Ghettos of Shanghai” by Vivian Jeanette Kaplan, published in 2002. The author was actually the writer of the story of her mother, Nini.
The story started in Vienna in 1921, when the five-year old Nini, her thirteen-year old sister Erna, ten-year old sister Stella, and newborn brother Willi, began to mourn the loss of their father, the owner of dry goods stores. Their mother then had to run the business. They continued to enjoy the benefits of growing up in a wealthy Jewish family, with lessons in piano, violin, skiing, skating and French. They went to the opera and belonged to a synagogue.
However, beginning in 1933, the Social Democratic state of Austria was occupied by German anti-Semitic Fascist agitators called Nazis. Nini attended rallies that defended the political status quo, to no avail.
Nini’s uncles and aunts were naively optimistic, rationalizing that eventually, the oppressive conditions would go away when Austria’s leadership changed. The Nazis brainwashed non-Jewish Austrians into believing that the Jews were to blame for the country’s problems, as it was clear that the Jews had conspiratorially amassed power and wealth. Jews were beaten in the streets, had their jobs, assets and civil rights stripped from them by the Nazis.
As the months passed, the Murphy’s Law variant, “Nothing is ever so bad that it can’t get worse” applied to Nini’s family and her new Polish boyfriend– who encountered Mussolini’s wrath when he went to visit relatives in Milan.
As is well known, Austria was annexed to Germany in spring 1938. Nini’s family hired a Jewish attorney to help them procure documentation that allowed them to flee to Shanghai. Nini’s family’s new home was not much better than the old one. Just different. The Japanese were oppressing the Chinese, Nazi-style. The Jews weren’t being treated significantly better, either.
Eventually, Nini’s kin found their way into communities of people of their own kind (Jewish) who rebuilt their lives and again prospered. Poldi fit right in, as he had a knack for bartering on the black market. Even under occupation, they re-created civilization– starting small businesses like coffeehouses, a school, a chamber orchestra, and a movie theater that screened old Hollywood movies. They secretly got access to shortwave radios so they could hear war news from Europe and the Pacific.
Nevertheless, Hitler’s persecution machine learned of the Jews’ new-found happiness and put the kibosh on it by having the Japanese herd them into ghettos in spring 1942. So their fortunes changed again.
Read the book to learn of Nini’s and her people’s postwar fate, considering that the reputation of “… the new State of Israel was rumored to be a hostile desert in the Middle East where thousands of Arabs angrily resist the arrival of Jews.”
I am pleased to announce that my book: “The Education and
Deconstruction of Mr. Bloomberg, How the Mayor’s Education and Real
Estate Development Policies Affected New Yorkers 2002-2009 Inclusive” is
available through the following online channels:
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The Book of the Week is “Highly Confident, The Crime and Punishment of Michael Milken” by Jesse Kornbluth, published in 1992. This volume described a situation that lends itself to the hypothetical board game “Survival Roulette: Wall Street Edition” (See “Blind Ambition” post).
There have been countless ultimate winners of this game through the decades: all the people never caught for securities-industry crimes. A million lawbreakers a day go unpunished. That doesn’t mean the crimes didn’t happen.
However, the most famous hypothetical losers of the game in this book were Ivan Boesky (an independent bond trader in New York) and Michael Milken (bond-trading executive at Drexel Burnham Lambert in Los Angeles). Other losers could include Dennis Kozlowski, Bernie Ebbers, Kenneth Lay, Steve Jobs and Richard Scrushy.
The board spaces could include Go To Jail (of course), and describe the financial crimes of: insider trading, Free Parking (or “stock parking”), disclosure failures, material misstatements, accounting irregularities, re-pricing stock options, and fraudulent conveyance, but also specific actions of conscience-salving philanthropy in which Milken engaged– such as throwing money at cancer research, and volunteering to teach math to nine and ten year-olds.
In August 1986, the U.S. Attorney’s Office of the Southern District of New York began an investigation into Securities and Exchange Commission (SEC) violations in the bond industry. By October 1986, the head federal prosecutor there, Rudolph Giuliani, was taping phone calls between Boesky and Milken. This, because Boesky had immediately accepted a plea deal to turn state’s evidence in exchange for a slap-on-the-wrist, country-club jail sentence. Boesky was one of the game’s lesser losers, to be sure. He was the king of lying, cheating and stealing.
Milken was a creative workaholic math genius whose meteoric career-rise allowed him to head an entire bond-research department in his mid-twenties. But he had zero ability for honest introspection.
Milken was a master at controlling his environment and other people, but he deceived himself about his “breaking the rules of the game” in his industry. He thought he was helping people all the time, but didn’t see how others were indirectly hurt by his actions. This kind of hubris syndrome is not uncommon in alpha males.
In 1978, Milken initiated the push to have Drexel underwrite junk-bond deals that financed hostile corporate takeovers. This wasn’t illegal in itself, but Boesky persistently badgered Milken until, by the early 1980’s, the latter was eventually manipulated into breaking the law.
Milken had a history of selfless philanthropy, yet his business actions gave rise to obscenely high fees made by his employer, an obscenely high income for himself, and crushing debt load for his clients. This led to extremely adverse financial and social consequences for thousands upon thousands of laid-off American employees of merged companies, subjected to disrupted lives and untold stresses.
The mood of the securities industry could be described thusly: “… with the election of Ronald Reagan… All that mattered was an ability to make money — without concern for risk, without regard for regulation.”
The investigation and resulting plea deals had the law enforcement agencies patting themselves on the back for convincing the perpetrators (other than Milken and Boesky) to implicate others, but the immunity deals the perpetrators got were a joke, considering that they themselves had serious credibility problems, and serious violations. It was a kangaroo court.
Nonetheless, the following parties launched investigations: Drexel and its attorneys, Milken and his attorneys, the U.S. Attorney’s Office, and the SEC. Those last two, of course, engaged in fierce rivalry. By September 1991, there was an orgy of litigation against Milken. The roll call involved fifty-eight lawyers (!)
Around the same time, Wedtech was another 1980’s scandal borne of out-of-control greed. In that case, a personal injury attorney generated billing documents that purported to show charges for legal services, that were actually for lobbying. Wedtech’s executives bribed politicians for the purpose of influence peddling, and swindled shareholders. This kind of crime is not uncommon.
Along these lines, if, for instance, a real-estate mogul declared business bankruptcy repeatedly throughout his business career, why did investors trust him with their money again and again and again and again and again?? Perhaps there was influence peddling. The politicians were his puppets who eventually passed legislation favorable to them all. It was worth it to them to risk losing all their chump-change investment to get access to future (much more) profitable contacts and politicians who did their will.
Anyway, Milken hired a team of lawyers who were the cream of the crop of Northeastern elitists. Yet, unfortunately for him, the media and law enforcement made him the poster-boy / scapegoat for the greed of the 1980’s.
Ben Stein, a wannabe Hollywood writer, was, according to the author, an individual who fueled public outrage against Milken. He was unwisely hired to write articles for Barron’s (a major Wall Street publication) after Milken was indicted. The nature of his utterances in print were “Shocking, unsubstantiated, never-proven assertions made with absolute certainty.” Stein claimed his taking of the drug Halcion caused him to produce such libelous garbage.
Strangely enough, insider trading wasn’t what Milken was jailed for, but rather, a minor disclosure failure. The judge in his case was ridiculously misguided, considering that the court calculated the dollar value of damages Milken caused was a mere $318,000. But the court saw that the revenues generated by him and his firm were in the hundreds of millions of dollars. So the court fined him $600,000,000.
Read the book to learn of Milken’s prison sentence and numerous other details of the whole tabloid-crazy affair.
The Book of the Week is “Women Who Work, Rewriting the Rules for Success” by Ivanka Trump, published in 2017. As is well known, Ivanka is Donald Trump’s daughter.
This volume described the business the author co-founded in an attempt to persuade females to vote for Trump for president in 2016. It was a redundant, wordy “do’s and dont’s” guide / bragfest (for the author, who used real-life examples from her own personal and professional life), interspersed with interesting research results, for women in the workplace. There were two words used grammatically incorrectly: “architect” was used as a verb, and “evolve” was used as a transitive verb.
Anyway, the Women Who Work website was started in November 2014. The tips provided were mostly common sense, like– listen to your coworkers at meetings, don’t gossip, lead by example, etc. One particularly curious line included: “… being authentic doesn’t mean candidly sharing every thought that comes to mind… using authenticity as an excuse to be unprofessional (“I am who I am!”).”
It was unclear at whom the author was targeting her vast generalizations and a few incorrect assumptions: experienced or inexperienced female workers. The author assumed that the reader had a female boss, worked with females, and worked with a team. She did provide some good tips for entry-level workers. However, she cited a 2014 study of Harvard Business School graduates in connection with gender roles in the home– but obviously, that group isn’t representative of the entire country.
Ivanka had to be vague, as every workplace is different. Her tips were unrealistic for women in male-dominated fields. Besides, the vast majority of employers in this country are still run by men. Ivanka also assumed the reader ran meetings, delivered presentations and managed a team. But if the reader had already reached a position with such responsibilities, she wouldn’t need this book.
The author wrongly assumed that the best way to get a job is through a recruiter. That might be true in some fields, such as information technology. But if the reader is a creative, independent thinker, she might get a job via thorough research on her situation, approaching employers directly, even if she has few or no contacts in the industry.
If the reader was laid off by her employer, Ivanka wrote, “Know that your manager probably doesn’t enjoy the conversation any more than you do and it may not have even been her decision to let you go.”
Letting employees go immediately is a far smarter policy than letting them know one, two or three months in advance of their firing but allows them to keep working. The latter scenario means the now-former employees will have zero productivity, will steal resources from their former employer, and will simply spend all their time looking for a new job.
Fired employees on the same level will be competing with each other for a new job so if they’re smart, they won’t tell the others they’ve been fired, but they’ll certainly be resentful, angry and possibly be sufficiently disgruntled to hurt their former employer.
The former employer thinks they’re saving money by not paying unemployment insurance– avoiding paperwork. They’re providing full pay for three months rather than half pay for six months. It’s actually more costly for them in the long run, in terms of personnel issues. And such former employers usually have unfriendly corporate cultures in the first place.
Ivanka said, “You’re never too old, experienced or far into your career to make a change.” That’s a lie, according to the AARP, which says that cases of age discrimination are on the rise. Nevertheless, young females just entering the workforce might want to read the book to get some tips.