We Can’t Cut Our Way to Success

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Last year, I stood before more than 1,000 workers at our company’s flagship factory and told them we were reducing their weekly hours from 40 to 32.

They cheered.

Why? Because they were keeping their jobs. With the housing industry in the worst downturn of our lifetime, our workers feared for their future. They’d seen others in our business cut jobs and even close plants in response to the prolonged housing slump. When they learned we wouldn’t be following suit, it was an emotional moment.

In today’s global economy, we’ve lost sight of what jobs mean to workers, companies and their communities. Economists and politicians discuss jobs in the abstract, as numbers. They measure the unemployment rate; they track jobs lost and gained; they project when the slow crawl to recovery might yield a few tenths of a percent in employment gains.

But look behind those numbers and you’ll find the real lives of workers and communities – and the profound effects of lost jobs.

Jeffrey Pfeffer, a professor at Stanford University’s graduate business school, has made a powerful case against job cuts. Citing decades of research, Pfeffer lays out a host of ills associated with layoffs, including:

Lower worker productivity

Lower company profits

Damaged employee morale

Loss of institutional knowledge

Increased rates of alcoholism, drug abuse, mental health problems and other health issues

As third-generation leaders of a family business, my three brothers and I believe we’d do more long-term damage to our company and our communities by cutting jobs than by toughing out a lean year or two. With more than a dozen fourth-generation family members preparing for leadership roles, we’d risk leaving them a permanently weakened company.

There will be times in the life of any business when drastic measures are required to ensure a healthy future. But I’m not sure that’s the reason for the millions of layoffs we’ve seen across our nation in the past few years. Is the viability of these companies really threatened? Or is it a case of leadership and/or public shareholders putting short-term profits ahead of the true long-term interests of companies and communities?

We share the profits of our business with employees when times are good. In the past 53 years, only four times have our workers missed an annual profit-sharing bonus. In 2009, we faced a choice: cut workers and show a profit for the year, or take a loss and keep our 5,000 employees in five states on the job. We took the loss, asking our employees – both hourly and salaried – to share the burden.

My late father, Bill Marvin, embraced the notion of stakeholders. He believed that the success of a company was inseparable from the success of the stakeholders who were crucial to the company’s viability – in particular, employees, customers and communities.

In recent years, business too often has put the interests of shareholders above all else. In doing so, we’re damaging the other stakeholders that we’ll need to create value for our companies and our communities in the future.

Our business relies on skilled workers to craft quality products. If we cut workers now, what effect would it have on quality and innovation in our business? And where will we find those skills when business heats up again?

How would our community benefit from fewer jobs, more empty homes and fewer kids in the schools? What would happen to our churches, our community organizations and our extended families?

Our workers aren’t taking this lightly. They have less money in their pockets and they’ve had to make some tough decisions about their own family budgets. But they’ve also got hope for the future – hope that would be shattered if we put them on the street in the worst economy since the Great Depression.

In letters, e-mails and in person, they’ve told my family that they appreciate the path we’ve chosen as a company. They know we’re in this together. And when we come out of it, they’ll know that our company – our family – honored their value by sticking with them when times were tough.

We realize that as leaders of a family owned and operated company, we’re insulated from some of the demands faced by our counterparts at publicly traded firms. But we’re not insulated from the realities of making a payroll, satisfying our customers and ensuring our company’s future.

And we believe the way to do that is by looking out for the interests of all the stakeholders that helped build our company. They got us where we are today, and we’re not going to cut them loose without a fight.

So send us your orders – we’re fully staffed and ready to go.

Susan Marvin is president of Marvin Windows and Doors, a leading manufacturer based in Warroad, Minn. Marvin’s Integrity Windows and Doors employs more than 200 workers in Roanoke, Va.