Why Did We Lose Sparta?

[donquixote99]

Here's a bit of the story of 'just another plant that got offshored.' Except it wasn't just another plant, it was a superstar profit machine, where the workers excelled at doing what was supposed to make everyone prosper. They were productive as hell, and kept getting more productive. But it didn't matter.

Employees stuck around for years, knew their jobs inside and out, and had a rare esprit de corps. When they faced tight deadlines, fabricators would volunteer to come in as early as 4 or 5 a.m. so they could get a head start before the paint crew arrived at six. In December 2009 the Sparta facility was named by Industry​Week as a Best Plant of the year, one of the top ten in North America. In the months that followed, it won Best Plant within Philips’s global lighting division as well as the firm’s global “Lean Challenge.” That summer, plant managers invited state officials and legislators to Sparta to celebrate.

Then, one morning in November 2010, a Philips executive no one recognized drove up and walked into the plant, accompanied by a security guard wearing sunglasses and a sidearm. He summoned all the employees back to the shipping department and abruptly announced that the plant would be shut down.

Read the whole story (long form journalism, in Virginia Quarterly Review) here: http://www.vqronline.org/reporting-a.../losing-sparta

I'll make two points:

1. First, the central claim of orthodox economics is that theory, predictions, and policy can and should be based on 'economic actors who make decisions based on rational analysis to maximize their economic well-being'. This case shows how questionable this claim is. Phillips blew off a strong, well-supported, funded proposal to keep this plant open. Then they lost hundreds of millions by moving this plant.

2. Given this sort of insane and irresponsible behavior, corporations do not deserve the freedom to make decisions like the one that closed this plant, without being answerable to anyone, or even having to explain themselves.