Do the struggles of Minnesota’s business icons signal trouble for the state’s economy?

General Mills and Medtronic have both announced layoffs in recent days, and Best Buy’s profits have declined sharply. Today’s Question: Do the struggles of Minnesota’s business icons signal trouble for the state’s economy?

  • John

    There are a huge number of people cutting back on spending due to rising prices of food and fuel. And when the record number of people out of work who fall off the benefit rolls and are not reported by the government or media are added to the 8% that is reported, you have a huge number of people with either no income or no disposable income.

    The wars continue.

  • Ben

    The price of gas falling nearly fifty cents per gal should add some to disposable incomes. As for unemployment, high levels of productivity are one of the biggest reasons we have high unemployment. It take fewer workers to make the same products.

    General Mills will adjust it’s workforce to squeeze out even more productivity in order to deal with the rising costs of it’s ingredients (commodity prices). The old economy is dead, welcome to the new economy. And please remember the old economy was fueled by consumer debt.

  • Hiram

    The problems Best Buy is facing have more to do with systemic problems in their business. They are the last survivor in their business. They just aren’t immune from the forces that put so many of their erstwhile competitors out of business.

  • Ann

    I have lost a job and I have seen many other people lose their jobs when the employers have relocated the jobs to other states.This is a more important problem than the General Mills and Medtronic woes.I have bought generic products for years because General Mills is too expensive for me.As I have said before, the legislators should have spent their time on real jobs with benefits, not the Vikings stadium. Our state is one of the most highly taxed states.We should not have had a government shutdown that closed the state on a holiday weekend. Thousands of dollars were spent to attract tourists and then they were turned away.

  • Duane

    Signal??? I believe the state’s and nation’s economy is already is trouble and little is being done to correct it. Layoffs generally are a sign of competent management decisions during a slow down since the labor expense represents the major expense item in a operating statement next to cost of goods. Our country has a lot of cash sitting on the sideline waiting to be invested. Government regulations, unknown health care costs and the tax hit that is expected after the first of next year have most investors waiting until they have a better picture of what to expect.

  • Jim G

    Bad news for their workers and that’s Minnesota workers. During the Great Recession one of the most interesting factoids was the increasing productivity of the American worker and a corresponding increase in profit margins of their corporate employers. This was achieved at the expense of remaining employees. As corporations cut employment, they decreased the numbers of hourly positions and increased the the numbers of exempt salary positions where they can force their workforce to work 50-60 weeks and legally not pay overtime.

    We could cut the unemployment rate in half if the exempt category for salaried workers was done away with. It would force companies to hire more workers, and it would mean that American workers would be paid again for hours worked over a 40 hour work week. This is a real problem that has had zero media investigation. Over time corporations have won the argument of the expected hourly work week. It’s not 40 anymore.

  • Clark

    Though not specific to Minnesota, every since our current president has pushed for increased reulations, my companies regulatory cost has increased from $1 million a year to $1 million a month. We don’t steal money from the elderly and are not in the pay day loan business. That is $11 million we can’t use to hire more workers or grow our business.

    I have no issues with some government regulations, but obama and the democrats, who all HATE private business, have no understanding of the law of unintended consequences.

    Keep the democrats in power and you will all be searching for employment.

  • Regnar James

    Is this the start of GD 2.0?

    Times are a lot different in 2012 vs. 1929,,,, 3x the population, food production tied to petrol farming, very small percentage of population that knows how to farm.

    I just hope and pray that my children have something to look forward to.

    “Soviet Union suffers worst wheat harvest in 55 years… Labor and food riots in Poland. Soviet troops invade… Cuba and Nicaragua reach troop strength goals of 500,000. El Salvador and Honduras fall… Greens Party gains control of West German Parliament. Demands withdrawal of nuclear weapons from European soil… Mexico plunged into revolution… NATO dissolves. United States stands alone.”

    DTOM

  • Steve the Cynic

    Absolutely it does. Those three companies in particular are iconic of what’s wrong with our whole economic system. General Mills makes its money by turning food into, well, food, but food that’s less nutritious than the natural stuff. Medtronic exploits a health care system that’s based on extracting profits from sick people, or people who can be persuaded that they’re sick, or people who are deathly afraid of becoming sick, rather than promoting health. Best Buy, whose advertizing slogan for a long time was “Get yours!” has a business model based on getting people to covet the latest new thing and to believe the lie that stuff will make you happy.

    The economy seems worse than it really is, because it was overheated in the ’90s and ’00s, being fueled by excess consumer debt. The problem was exacerbated by the repeal of Glass-Steagall and other examples of excessive deregulation, which only encouraged parasitic and predatory business practices. When people keep demanding more and are never satisfied with enough, this is the predictable result. Contentment is bad for the ecomony, and vice versa.

  • Craig

    Best Buy is in trouble. Discs are over. Amazon sells electronics. Walmart and Costco drive walk-in prices very low. Computer inventory expires faster than fresh fruit. And Apple is so strong they can dictate margin-less pricing for the privilege of offering their products. Best Buy’s troubles will have a local impact but are not indicative of an underlying flaw in the state’s economy.

    Medtronic’s move, on the other hand, may indeed signal competitive pressure on the local economy.

  • James

    General Mills’ and Medtronic’s announcements are company specific and are the sorts of things companies do to address performance issues and juice their stock prices.

    At the same time that they are announcing waves of layoffs, there is a continuous and offsetting trickle of hiring going on elsewhere, and problably even at GM and Medtronic that goes unannounced.

    Companies are supposed to please customers and make profits. Jobs are a by-product. There is constant tension and ebb-and-flow. These announcements are no big deal except for the people directly affected.

  • GregX

    when the economy is good – we ignore the littel tea leaves. When the economy is off – every single ede on every single tea leaf is some critical message about the entirety of the situation. lighten up – judge the overall tea.

  • suestuben

    I believe the layoffs are the result of the corporate model that demands immediate profit for the shareholders, instead of long-term success for the business. The ‘owners’ took a hit in the last quarter so the companies feel forced to generate some immediate income for the greedy few. Hence, good-bye to people who have made the company successful and whose reliance on public assistance will help drag the economy down further which will cause the cycle to repeat.

    The corporate model is not humane and causes the most immoral workers to rise to the top. They apparently have no problem working for the wealthy few at the expense of the workers who rely upon a regular income to house and feed the family. Those unconscionably-rich few seem to lack the fully formed psyche we term necessary to be a whole, well-rounded human being; the lack of which lowers one to a sociopath(the inability to empathize with another’s pain). Our country is founded on this model, a terribly faulty financial system that will ultimately cause the 1% to rule the 99% with an iron hand while those masses scramble for the pitance that escapes through the fingers of the folks in the well-guarded gated communities.

    Historically, a populace will tolerate the system until they have nothing more to lose; do we want to wait that long?

  • georges

    “Sociopaths (psychopaths) are glib, superficial, egocentric and impulsive. They have no guilt, remorse or empathy.”

    Hmmmmmm……

    Fits a wide range of modern Americans.

    Went to a dance,

    Lookin’ for romance,

    Saw Obama-man,

    And I thought I’d take a chance.

    ‘Bama-man…man…man,

    Thought I’d take a chance…Bama-man…man…man….

    Confucius say:

    “If you romance a sociopath for 4 years, you’ve given it your best shot.

    Time to kick her to the curb, man.”

  • Steve the Cynic

    I agree with suestuben. Sociopathic is an apt adjective for corporate business. Being literally soulless entities, corporations necessarily lack the human qualities of empathy, conscience, compassion, and a sense of justice. The people who run the businesses may have those qualities in spades, but the logic of the business world precludes them from acting on their nobler impulses outside of their private lives. It’s like that famous line from The Godfather: “It’s nothing personal. Just business.”

  • Sue de Nim

    Speaking of which (soulless corporations, that is), what’s with the sponsorship messages from “Allied Bank, who believes….”? A bank, being an impersonal entity, is a what or a which, not a who, and not having any mind of its own, a bank doesn’t believe anything. Or do the folks at MPR believe Romney’s preposterous assertion that corporations are people?

  • georges

    Ahhhh…..

    So many liberals here who believe in the righteousness of the Citizens United decision, giving human behavior conditions (such as sociopath) to Corporations, labor unions, etc.

    Personally, I disagree with the Citizens United decision, as it gives the vile Labor Unions the right to ripoff their rank & file slaves and spend the money on the political campaigns of their Democrat Party overlords.

    For 25 years, I have been trying to get various politicians interested in a simple law that would make it illegal for anyone running for public office to solicit, accept, or use in any way money from any source whatsoever that cannot actually vote for said candidate in the election.

    Simple. And effective. With a 20 year hard labor penalty for violations.

    No more Corporations or Unions funding advertisments.

    No more Senator 90210 in Minnesota. You remember Paul Wellstone, who earned the nickname “Senator 90210″ because he got about 85% of his campaign funds from the movie business folks out in Beverly Hills.

    No more of that. Those overpaid faux people cannot vote in the U.S. Senator election in MN, therefore, they cannot contribute any of their ill gotten cash to a race here.

    Funny thing, though, I can’t get any politician to introduce such a simple idea in a House or Senate bill. Wonder why?

    Paul and I discussed political ideas several times. And, everytime, he lied right to my face. Maybe he was tainted by the Hollywood money. Or the Democrat Party. In any case, he knew I was not buying his lies, so they weren’t really lies, were they?

    That’s the way politicians think, anyway.

  • Steve the Cynic

    “Democratic Party overlords,” georges? I thought the standard GOP talking point on that was that the Democratic Party was in the hip pocket of the unions, but you seem to be implying that it’s the other way around. I guess consistency is irrelevant if your only aim is to cast aspersions on anyone who disagrees with your ideology.

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