Wednesday, September 20, 2006

Business Unsavvy in Oregon...Shock of Shocks

Major Mike

The Oregonian continuously demonstrates why newspapers are the business dinosaurs of our age. AGAIN (and before)…they subtly go about telling Nike how to run their business and spend their money.

Earlier this week Judge Gayle Nachtigal ruled that Beaverton’s actions during its ongoing lawsuit with Nike, regarding possible annexation of Nike into the city of Beaverton, were “inexcusable,” and found the city in contempt. Score a victory for the democratic process, and for transparency in government. Beaverton should have long ago suspended its fight with Nike and ceased in wasting the taxpayers’ money, but Mayor Drake’s idiotic insistence on confronting Nike, and confounding the legal process, has now led (?) the city to the point where they will have to pay $272,000 in document search costs, and will likely have to pay Nike’s legal fees.

All righteous in my mind.

Cities and corporations have the same obligations in our legal system as individuals. No mayor should be able to use the shield of their city government, or its financial resources, to operate outside the law. In this case, they continuously attempted to obfuscate their actions, and in doing so engaged a private entity in a drawn out, and expensive legal battle, that in the end, will have added zero value to either party. The city of Beaverton should pay the $272,000 AND Nike’s legal expenses.

BUT, as always happens in the People’s Republic of Oregon, the Oregonian decides today to act as the mediator, and they offer up a solution as to how this chapter should end. And, as before, they tell Nike how to spend their money.

In their lead editorial today (paper edition), the Oregonian supports the judge’s ruling and, in turn, admonishes Mayor Drake for being wasteful of the City of Beaverton’s resources, AND they slip in this little beauty…

The judge also should order Beaverton to pay Nike's legal expenses. Then the company, having made its point, should turn around and contribute that sum to a suitable city project.

I guessed they missed this item that also ran in today’s paper…

Nike announced plans this morning to close its Wilsonville distribution center by the end of 2008, as it consolidates two footwear shipping operations into a new facility to be built near Memphis, Tenn.”

So, we have it again…the business savvy Oregonian, is asking Nike to either absorb $475,000 in unbudgeted legal fees and let an unrepentant Mayor Drake and the City of Beaverton off the hook for their misbehaving, or accept the legal fees and in turn, give the money right back to the city in the form of some gift of Nike’s choosing…right at the time that Nike is announcing the future layoffs of some 250 employees in the Wilsonville Footwear Distribution facility.

This is why Oregon and the Oregon political mindset don’t get business…contrary to popular belief here…money doesn’t just roll into businesses…it has to be earned. And once that money is earned, it is generally budgeted for a …get this…business purpose. When unbudgeted items arise, some other portion of the business receives less money, or the bottom line, and potentially the company’s market value is negatively affected.

Wouldn’t it be better for all parties for Nike to take the $475,000 and spend it towards the transitions that will have to occur for the 200+ employees that are going to be displaced in Wilsonville?

Until the Oregonian, and state and local governments can quit viewing Oregon businesses as cash cows, Oregon will continue to be looked at as business unfriendly.

Ask yourself, why is there only one Fortune Five-hundred company in Oregon? It is because, apparently, few people at the Oregonian, and few people in Oregon government have heard the fable of the goose that laid golden eggs. It seems neither entity has the understanding of how businesses operate, and how they budget and spend their monies.

It is long past time for the Oregonian to stop telling Nike how to spend its money…when they become a Fortune Five-hundred company, maybe someone will listen, until then…they stay off the field…they are way out of their league.

In the interest of full disclosure...I am a Nike stockholder.

1 comment:

David said...

A very well-argued and interesting post. Thank you for sharing.