*The loyal-employee zaibatsu model was defeated by the oligarch shareholder-value model.
Why is "Forbes" telling us this, one idly wonders
The End of Loyalty (Public Affairs, May 2017) by Rick Wartzman tells the story of the destruction of the social contract between employer and employee in America through the lens of four iconic companies: Coca-Cola, GE, GM and Kodak. At the start of the story in the 1940s, these firms—and, by implication, many others — were obsessed with creating more and better jobs. The economy and the middle class flourished. Today, that social contract has been destroyed.
Two of the four companies, Coca-Cola and GE, have been hugely successful over a long time. They’ve had their ups and downs but they have had an incredible run of growth and profitability for a long, long time. The other two, GM and Kodak, faltered and went bankrupt. (GM has in many ways recovered, but Kodak is just a shadow of what it once was.) Yet in the end, it didn’t matter. Whether the company has been successful or not, the social contract — job security, pay, health benefits and pensions — has weakened immensely.
A big reason for this is that the firms became preoccupied with maximizing shareholder value. Until 1980, increases in productivity were shared with the workers who had created those gains. After 1980, almost all the gains went to the shareholders and the executives....
