Monday, October 15, 2012

CEOs Threaten Workers Over Presidential Vote

"If you vote for Obama I may have to sell my gold chair." 
Last week David Siegel, the CEO of Westgate Resorts, emailed all of his employees telling them that if Obama were to win the presidential election, their jobs will be threatened.  Siegel based his letter off a similar chain letter that circulated before but changed the letter to fit his circumstances.  Here is a breakdown of his letter (you can read the entire letter here):
As most of you know our company, Westgate Resorts, has continued to succeed in spite of a very dismal economy. There is no question that the economy has changed for the worse and we have not seen any improvement over the past four years. In spite of all of the challenges we have faced, the good news is this: The economy doesn’t currently pose a threat to your job.
Siegel makes some contradicting statements in his opening paragraph.  He claims the economy has gotten worse over the four years that Obama has been president but that his company has been able to succeed and that the present state of the economy, which he declared as "has changed for the worse," does not pose a threat to his employee's job security.
What does threaten your job however, is another 4 years of the same Presidential administration. Of course, as your employer, I can’t tell you whom to vote for, and I certainly wouldn’t interfere with your right to vote for whomever you choose. In fact, I encourage you to vote for whomever you think will serve your interests the best.
This is where Siegel threatens his employees.  A vote for the president would "threaten your job," but Siegel then tries to reassure his employees that he isn't trying to tell them who to vote for and that he encourages them to "vote for whomever you think will serve your interests the best."  Siegel just told them their interests -  an Obama win means their jobs will be threatened.  He then tries to explain to his employees what is in their best interest.
However, let me share a few facts that might help you decide what is in your best interest.The current administration and members of the press have perpetuated an environment that casts employers against employees. They want you to believe that we live in a class system where the rich get richer, the poor get poorer.
The real facts are that executive pay has outpaced workers' wages for sometime now.  Sarah Anderson and Chris Hartman of The Progressive explain it quite simply: "Here's one way to put the increase in CEO pay in perspective: If the minimum wage, which stood at $3.80 an hour in 1990, had grown at the same rate as CEO pay over the decade, it would now be $25.50 an hour, rather than the current $5.15 an hour. If the average annual pay for production workers had grown at the same rate since 1990 as it has for CEOs, these workers would have earned $120,491 instead of $24,668 in 2000."
They label us the “1%” and imply that we are somehow immune to the challenges that face our country. This could not be further from the truth. Sure, you may have heard about the big home that I’m building. I’m sure many people think that I live a privileged life. However, what you don’t see or hear is the true story behind any success that I have achieved.
You can however watch the documentary about Siegel and his family, titled "The Queen of Versaille," which details his quest to build the largest home in America despite being downgraded from a billionaire to a hundred-millionaire.
I started this company over 42 years ago. At that time, I lived in a very modest home. I converted my garage into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you. We didn’t eat in fancy restaurants or take expensive vacations because every dollar I made went back into this company.

I drove an old used car, and often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice. Meanwhile, many of my friends got regular jobs. They worked 40 hours a week and made a nice income, and they spent every dime they earned.

They drove flashy cars and lived in expensive homes and wore fancy designer clothes. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into this business —-with a vision that eventually, some day, I too, will be able to afford to buy whatever I wanted.
Edward Ericson Jr. wrote the following for Baltimore's City Paper explaining just how Siegel's fortune started:
Siegel tells his story of suc­cess, found­ing the com­pany 42 years ago and dri­ving an old car, work­ing hard from his garage while his neigh­bors worked 40 hours and “spent every dime they earned.” It’s an inspir­ing story. It con­trasts, how­ever, with the story he told me and Jeff Bill­man in his office in the sum­mer of 1999 as he tried (erro­neously, it turned out) to evict the ten­ant in his $22,000-per-month house. That was quite an inter­view, and the link is still live.

Siegel, 1999, recall­ing the rent-to-own store he opened in the early ‘60s in Miami:

“Soon Siegel had a store in Lib­erty City and a fleet of Volk­swagon vans. His sales­men offered the refur­bished sets to the area’s African-American res­i­dents for $10 down and $5 a week, he says, adding, ‘I only had about $10 in each one.’

Those $5 pay­ments soon financed three stores, a gas sta­tion, a house with a pool and a Buick con­vert­ible. ‘My goal was to make $125 a week,’ Siegel says. ‘I usu­ally exceeded that.’”

To be fair, he didn’t say whether the Buick con­vert­ible was new.

Shock­ingly, Siegel’s store got burned down in the riots and he ended up in Cen­tral Florida sell­ing swamp land to gullible “investors.” He quickly went on his own and in a few years (if his 1999 rec­ol­lec­tion is to be believed) made mil­lions on those unde­vel­opable acres, mostly by tout­ing their prox­im­ity to Dis­ney World–but also by draw­ing up bogus devel­op­ment plans and occa­sion­ally clear­ing a dirt road. He sold to peo­ple in New Jer­sey, Mex­ico, and as far away as Bel­gium. State reg­u­la­tors and the fed­eral Depart­ment of Hous­ing and Urban Devel­op­ment came after him, but he lawyered-up and stared them down. Most of the buy­ers of his prop­er­ties (includ­ing the young man who would go on to become musi­cal direc­tor of Glo­ria Estefan’s Miami Sound Machine) had lit­tle or noth­ing to show 20 years later.
 So Siegel started his business by duping people with bum land.  He did well for himself but for Siegel not well enough.

Even to this day, every dime I earn goes back into this company. Over the past four years I have had to stop building my dream house, cut back on all of my expenses, and take my kids out of private schools simply to keep this company strong and to keep you employed.
What?  He had to put his lavish 90,000 sq. ft. home building on hold and pull his kids from private school so he could keep running his business?  What a swell guy making so many sacrifices to keep his employees employed.
Just think about this – most of you arrive at work in the morning and leave that afternoon and the rest of your time is yours to do as you please. But not me- there is no “off” button for me. When you leave the office, you are done and you have a weekend all to yourself.
I unfortunately do not have that freedom. I eat, live, and breathe this company every minute of the day, every day of the week. There is no rest. There is no weekend. There is no happy hour.

I know many of you work hard and do a great job, but I’m the one who has to sign every check, pay every expense, and make sure that this company continues to succeed. Unfortunately, what most people see is the nice house and the lavish lifestyle. What the press certainly does not want you to see, is the true story of the hard work and sacrifices I’ve made.
But I thought he didn't have a lavish lifestyle.  I thought he spent all his time at the office.
Now, the economy is falling apart and people like me who made all the right decisions and invested in themselves are being forced to bail out all the people who didn’t. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed 42 years of my life for. Yes, business ownership has its benefits, but the price I’ve paid is steep and not without wounds.
Talk about hypocrisy.  The guy is building the largest home in America but had to stop because the economy went south.  Now he is resuming building his home and he doesn't want to stop again? Scott Maxwell wrote the following for The Orlando Sentinel:
Only here's the thing: Siegel's company started tanking before Barack Obama was ever elected.

The Sentinel carried its first headline — "Westgate Resorts to lay off hundreds" — in September 2008.

Back then, Siegel was quick to assign blame — not to himself, of course, but to Wall Street and Washington, where George W. Bush was presiding.

Those cuts were followed by stories about Westgate closing a call center in Missouri and Houston. Then 600 more jobs. Soon, an additional 1,000.

By December, Westgate had announced 4,000 layoffs — and the company was such a mess Siegel was urging employees to ignore rumors of bankruptcy.
So now his economic woes are caused by Obama?
Unfortunately, the costs of running a business have gotten out of control, and let me tell you why: We are being taxed to death and the government thinks we don’t pay enough. We pay state taxes, federal taxes, property taxes, sales and use taxes, payroll taxes, workers compensation taxes and unemployment taxes.

I even have to hire an entire department to manage all these taxes. The question I have is this: Who is really stimulating the economy? Is it the Government that wants to take money from those who have earned it and give it to those who have not, or is it people like me who built a company out of his garage and directly employs over 7000 people and hosts over 3 million people per year with a great vacation?
He had to hire people to manage his business?
Obviously, our present government believes that taking my money is the right economic stimulus for this country. The fact is, if I deducted 50% of your paycheck you’d quit and you wouldn’t work here. I mean, why should you? Who wants to get rewarded only 50% of their hard work? Well, that’s what happens to me.

Here is what most people don’t understand and the press and our Government has chosen to ignore – to stimulate the economy you need to stimulate what runs the economy. Instead of raising my taxes and depositing that money into the Washington black-hole, let me spend it on growing the company, hire more employees, and generate substantial economic growth.
So Siegel wants more money to be kept in his pocket and why?  To build his massive house?  To take out more loans to build more resorts?
My employees will enjoy the wealth of that tax cut in the form of promotions and better salaries. But that is not what our current Government wants you to believe. They want you to believe that it somehow makes sense to take more from those who create wealth and give it to those who do not, and somehow our economy will improve.
In the last four years, in the period that Siegel himself described as continued success, did Westgate employees experience increased wages and promotions?

If anyone can remember, a couple years ago Westgate Resorts got into some trouble for apparently not paying their associates appropriate wages at all (maybe Siegel should hire another department to manage that).  The U.S. Department of Labor said that an investigation had determined that 1,065 company employees were not paid at least the federal minimum wage for all of the hours they worked. The agency also said that the workers' premium pay did not include commissions, overtime was incorrectly computed, and Westgate failed to keep accurate time-card records.  How about the sexual harassment lawsuit against Siegel, in which he was found guilty after a former employee claimed Seigel offered millions to have sex with her.  Is this Siegel's idea of trickle down economics?
They don’t want you to know that the “1%”, as they like to label us, pay more than 31% of all the taxes in this country. Thomas Jefferson, the author of our great Constitution, once said, “democracy” will cease to exist when you take away from those who are willing to work and give to those who would not.”
This falls into the same area as Mitt Romney's "47 percent"' comments and Paul Ryan's "makers and takers" comments, where he insists those who earn less are simply not as motivated as the job creators like Siegel.
Business is at the heart of America and always has been. To restart it, you must stimulate business, not kill it. However, the power brokers in Washington believe redistributing wealth is the essential driver of the American economic engine. Nothing could be further from the truth and this is the type of change they want.
How will businesses succeed if nobody can afford to purchase their products?
So where am I going with all this? It’s quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone.

So, when you make your decision to vote, ask yourself, which candidate understands the economics of business ownership and who doesn’t? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of protecting and saving your job.

While the media wants to tell you to believe the “1 percenters” are bad, I’m telling you they are not. They create most of the jobs. If you lose your job, it won’t be at the hands of the “1%”; it will be at the hands of a political hurricane that swept through this country.

You see, I can no longer support a system that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities. If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about.
Did Siegel just call his employees, those who have helped him amass his fortune, "unproductive?"  Is Siegel saying that if Obama is elected he will no longer feel the desire to make money and finish his mansion and become a billionaire again?

This is just ridiculous, but not to everyone.  Arthur Allen, CEO of ASG Software Solutions felt inspired by Siegel to write an email to all of his employees threatening them with termination unless they vote for Mitt Romney.  
Many of you have been with ASG for over 5, 10, 15, and even 20 years. As you know, together, we have been able to keep ASG an independent company while still growing our revenues and customers. But I can tell you, if the US re-elects President Obama, our chances of staying independent are slim to none. I am already heavily involved in considering options that make our independence go away, and with that all of our lives would change forever. I believe that a new President and administration would give US citizens and the world the renewed confidence and optimism we all need to get the global economies started again, and give ASG a chance to stay independent. If we fail as a nation to make the right choice on November 6th, and we lose our independence as a company, I don’t want to hear any complaints regarding the fallout that will most likely come. Remember, in the world of business, companies are consolidators or they get consolidated; so far ASG has been a consolidator, completing over 60 acquisitions in our 26 year history. When we buy a company, we eliminate about 60 percent of the salaries of the employees of that company. If we lose our independence and get consolidated, the same thing would happen to ASG’s employees.
I thought Allen's email particularly interesting for a couple reasons.  He claims they have been a successful independent company but then claims that if Obama wins, other companies will buy them out and cut employees.  As a point of reference, Allen talks about how he is responsible for eliminating employees of companies he acquires.  Basically, he praises his company for creating jobs while at the same time explaining that his company kills jobs.

In some ways, he does more to discredit himself than the delusional Siegel.  He admits that he is not really responsible for job growth.  He basically doesn't want to become someone else's employee and face the same threats that he is placing on his workers.

Maybe this is Mitt Romney's newest method of getting votes.  Romney has hit the millionaire fundraising circuit to a point that he is running out of millionaires so now those millionaires are resorting to threatening their employees to vote.  I bet next step is forcing them to vote for Romney like a coal worker being forced to attend a Mitt Romney event without pay.

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