Editor's Page -- Emerging From Enron's Ashes

Dec. 21, 2004
It's time for true business leaders to step up and call for corrective action.

I must say I'm a little disappointed, though not too surprised by the muted reaction from manufacturing executives regarding the Enron Corp. debacle. After all, the now-disgraced Enron leadership epitomized the people who led the most recent assault in the ongoing, sporadic trashing of American Industry. Though they likely bore no ill-will toward manufacturing companies, Enron executives' overheated, derisive proclamations about ditching "hard assets," along with their artificially inflated growth rate and stock valuation, damaged U.S. manufacturing. They reinforced the myth that making money by making products is pass. One would think a manufacturing executive would speak up and remind everyone that Enron's business model failed, while the company's competitors, who maintained a significant manufacturing capability, survived. Yet the silence can be understood after tallying up the reasons for staying clear of the fray. Could it be that executives of manufacturing companies harbor doubts about the importance of U.S. manufacturing strength and their role in sustaining it? Did the aura surrounding Enron's growth bewitch them too? Also, with so many other factors playing a role in Enron's comeuppance, certainly the question looms: Could Enron executives have pulled off the new business model had not hubris caused them to reach too far, too fast? Perhaps the commoditization of manufactured goods is inevitable, and Enron's business model will prevail. Better not deride it, and be branded a hidebound, old-school bureaucrat protecting the status quo. Better to close ranks, deal with the situation amongst our own, executive to executive, as police officers and doctors discipline wayward practitioners behind closed doors. There's always the easy dodge of withholding comment on a case still under investigation. We don't really know if laws were broken. Ethical lapses? Well sure, but we don't know if they were committed to enrich individuals, or simply were the unintended consequence of a fast moving team churning through uncharted territory. The trouble with these excuses for many major manufacturers, is that, as public companies, they are suffering the consequences of silence: a stock market dropping while other economic indicators rise, jeopardizing the economic recovery. It's times like these -- when economists speak in the same sentence about how both the fear of terrorist attack and the mistrust of our nation's executives are eroding investor confidence -- when true business leaders -- the leaders of leaders -- are born. They take the risk and call for corrective action. And a true manufacturing leader will assert that, when the new economy arrives, it will, like the service sector before it, be built on the backbone of a strong manufacturing infrastructure. Patricia Panchak is IW's editor-in-chief. She is based in Cleveland

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