Friday, May 20, 2005

What Are Companies For?

It was my turn.

I called Andrew as soon as the mail had arrived and didn't bother to check the time in Washington.

He sounded disgustingly awake when he answered, even though I knew it was about 4:00 a.m.

"Andrew!" I exclaimed heartily. "I've got a question for you."

I was sure he had a question for me, too, and that it would begin, "Just what the hell do you think . . . ."

"Go on, Commander," he said as cheerfully as if he had just finished his second cup of coffee and several slices of toast with bacon.

"What are companies for?" I asked.

"They make things and sell them, or they sell services," he answered.

"That's what I thought," I said.

I heard another cup of coffee being poured.

"Well, you know Sarah and I are negotiating to buy a small publishing company from an American branch of a Japanese conglomerate?" I said.

"Yes," he said.

"Well, word about the sale has got out and so the corporation issued a statement to the press and shareholders," I said.

"That's normal," Andrew said.

"Ordinarily, I would have agreed," I said, "but listen to this: 'Yanamaki Corporation of America, Inc. and its subsidiary division, YCIA Press, have as their first goal the delivery of value to shareholders and will enter into agreements that will maximize that value.'"

"And you thought you were buying a publishing business," Andrew said.

"Yes."

"Look, General Motors' biggest business is now financial services. The cars have become a necessary vehicle - sorry - to generate the brand to leverage that financial business."

"What about the cars?" I asked.

"Does it look like any of the major car makers care about cars?" Andrew asked. "Look at them, you can'te tell them apart, and they all look like suppositories. With a French wife, I see a lot of them, so I know."

"Are there businesses that care about what they actually do and not just about delivering shareholder value?" I asked.

"Not with turnovers over half a billion dollars," he said. "I't sad, but true. Of course, in Europe, you're still recovering from the notion that it's not the business of a large company to make anything, they just exist to provide jobs."


"Fair point," I said, remembering my recent encounters with various telephone companies.

"Everyone knows that companies are in business to make money," Andrew began, "but advertising the fact is, I agree, pretty tacky. I mean, when I buy a book that you've published, I don't want to be reminded that I just paid for another Tom Collins for you in your retirement; I want to be exciting about the prospect of reading something good by an intelligent writer."

"Exactly," I said.

"I'll tell you what you do: Call Yanamaki - this is a good time of day to do it, too - and tell them you want to reduce your offer because they've just reduced the net worth by reminding the world that YCIA Press doesn't give a damn about contributing to the timeless sum of world culture, but seems only to care about the next quarter's bottom line. You should get at least a 30% reduction."

"Do you want a commission if I get a reduction?" I asked.

"No, I can't be seen to make any money from being in the Senate. I'm just in charge of spending it."