The Count of Monte CristoChapter 93 Valentine
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Employer faced with laying people off in economic tough times, hires more people instead.
‘What am I going to do? I just don’t know what I should do. What am I going to do?’
After spending many sleepless nights troubled by his floundering business, ironically, it was Valentine’s Day, 2010, when Edward Benedict had an inspired idea. From that one idea, he developed his financial strategy and future business plan to have ready and in place one year from today, Valentine’s Day, 2011. Even though his official first day to open for business was January 2nd, 2011, it was important that he’d have the grand opening on Valentine’s day. He’d use the preceding six weeks to advertise and market his grand opening. This story is about the period of time that preceded the grand opening.
After tossing and turning day after day and week after week, Edward had an epiphany. As a tsunami would withdraw the waters from shore, Edward’s epiphany erased all his indecision. The lull before the storm, once he had his idea and knew what he needed to do, the voices of his accountants and bankers were all quieted by his determination. Then, as if in a tidal wave of activity, he was a driven and motivated man to do all that he needed to do within a year.
‘Yes, of course, that’s it. That’s what I’ll do.’
Edward Benedict was a small man, but for a man with a diminutive presence, he had big ideas, bigger dreams, and larger aspirations. For such a small man, barely 5’5′ tall and weighing 130 pounds, except for his size, everything else about him was big. With millions of square feet in area, he owned the biggest building in the city and one of the biggest buildings in the state.
Even his car, the only luxury he afforded himself, other than the splendor of his house, was a new 2 door, Rolls Royce Phantom coupe. He bought the car for the craftsmanship and the handmade workmanship, something that is dear to him. From a family of automotive aficionados, his Dad loved his 1963 Chrysler Imperial Crown coupe and his grandfather drove a 1929 Duesenberg.
A giant in his community, he was not only well respected but also beloved. A man with a caring heart bigger than Santa Claus’ generosity, he helped those in need, whenever he could. Anyone who entered Edward’s office with hat in hand left with a smile, a job, and/or money in their pocket. The richest man in the community and one of the richest men in the state, his pockets were as deep as his compassion was limitless for those less fortunate than him. For such a small man, his empathy for others was huge.
With him being so big inside, anyone who knew him, never thought of him as small. When asked to describe him, after they met him for the first time and listened to him talk about people in his community in need, about those who worked for him, and about his plans for his building, it’s funny how everyone described him as being bigger in size than he was in stature. With his reputation preceding him, after reading countless articles about him and his company, those who never met him imagined he was bigger. Someone you’d listen to, when he talked, he lit up the room with his presence.
For the sake of the promise he made to his father, he decided against taking the advice of his lawyer, accountant, banker, and other financial advisers. They didn’t understand the personal burden he shouldered. Just as they thought him a poor businessman for the indecisions he struggled with and for the financial decisions he made that were contrary to their advice, he more considered the human elements. His employees and the people who lived in the community equally were as important, if not more important, when making his business decisions, than the numbers his accountants crunched. When his financial people only considered balance sheets, cash flows, income statements, and budgets, Edward knew they couldn’t possibly understand his emotional motivation that tempered his values, when making his business decisions.
‘Numbers, all they see are numbers, but I see the faces behind the numbers. I know what numbers can do for happiness or for ruination. If I just considered the numbers, I’d devastate the lives of so many people and change the landscape of this community for the worse for years. For what? For more money? I have enough money, more money than I need.’
Valentine’s day, a day of love not only meant the love that he had for his wife and for his children but also the love that he had for others, especially for his employees and those ties that his family business has had in the community for decades. Weighted down with obligation, feeling financially, morally, emotionally, and spiritually responsible for all those who worked for him, highly skilled craftspeople, who plied their laborious lost art, while unfairly competing in a world of high volume, computerized production, third world labor rates, and mass marketing, his workers were more family than employees.
In the way that he financially supported his workforce, with his yearly business losses escalating, even the IRS deemed his venture more of a hobby than a business. Edward keenly understood that the money his employees earned from the jobs he gave them, for the skills that no one else wanted, was the only money they had. Many of his employees were second and third generation family members, with many having worked for his father and grandfather, before him. How could he abandon them in bad times, when they worked so hard to give him and his family so many good times?
A community decimated by high unemployment, home foreclosures, and crime, a downward spiral of urban devastation, too many residents had already fled their city for the peace and safety of the suburbs. Yet, tied to their jobs, most of his workers lived where they worked. After many of them had worked loyally for him for so many years, he’d be humanitarianly irresponsible to just let them go to fend for themselves, especially at a time when there were no jobs.
For sure, it would be different and his decision easier, if there was another job they could get, but there wasn’t. In their one community alone, the unemployment rate pushed 20% and that’s what the state finally admitted that it was. Yet, when counting those residents who stopped collecting unemployment and who gave up looking for work, the real unemployment number approached 30%.
Where would they go and what would they do without the job he gave them? Working for him and for his father before him is the only job that many of them have had. Continuing his father’s legacy, his products had more become labors of love than competitive products in the world free trade marketplace. Committed to making the best product that he could, he was true to his art. Albeit, a lost art, mass production had ruined the appreciation to have something beautifully handmade and that was made in America, instead of cheaply manufactured overseas in China.
Finding himself in a similar but not as a life and death situation, as Steven Spielberg’s main character, Oskar Schindler, in the movie Schindler’s List, for the sake of his employees, he found himself writing a similar list. Spending day after day of worried indecision, he debated which of his employees to keep and which of his employees to let go, while stubbornly continuing to produce a product that so few wanted for the sake of giving his employees jobs and healthcare benefits. Grateful to his employees for providing his family with a good life, he was lucky in the regard that he was a wealthy man, but now it was his turn to return the favor.
The son of Benjamin Benedict, who owned the business before him, a legacy left it in his hands to safeguard, his father’s dying wish was that he continue the business and not sell it.
‘You take care of it and it will take care of you,’ his father enjoyed telling him, when referring to the success of their family business, after so ma
ny years of economic recessions and wars.
Only, too ingrained in making his handmade products and too engrossed in helping his employees live better lives, his father’s vision was narrowed by his community spirit and neighborhood involvement. Times were different today. Instead of a statewide and national market, it was a global market and his father never planned for the future technology that he’d need to compete in the global market of today. Edward had the vision and could clearly see that his company was sixty years out of step with progress, technology, and the rest of the world.
A dying dinosaur that bled red ink daily, now too late to reinvent his wheel, it would cost him a fortune to reinvest in the technology that he needed to remain competitive by making a product that the rest of the world wanted but that he’d abhor. High volume with a product line that consisted of more cheaply made items over lower volume and higher quality was the present and what he needed to have to compete in a global market in the future. Only, a real business dilemma, Edward would never forsake quality for volume.
A time when a handshake was your word and was as good as a binding contract, with his father truly believing in good Karma and bad Karma, that high moral philosophy that worked so well in the past was lost on too many of today’s businessmen, and now was the undoing of the son. Reaping what he sowed, truly a good hearted man, his father lived by the simple fundamental golden rule principle of do unto others and you would have others do unto you. He also truly believed in what goes around comes around and Edward believed in that, too.
‘We don’t just make toys here, Edward,’ said his father. ‘We make friends. We make families. We make people happy by giving them a job they are proud to have. We make productive workers by giving them the opportunity to ply the skills that few possess and so many appreciate. Don’t forget that,’ he told his son. ‘What we do is not about money and the bottom line. It’s about people and giving back what we’ve been so fortunate to have.’
Only, with third world labor rates, the skills that few possessed were lost in progress and automation. The quality that so many appreciated gave way to mass production. Further, without money and without paying attention to the bottom line, he’d exhaust his personal resources just paying for wages and for the materials to make merchandise that didn’t sell.
After indirectly taking care of all those who lived in the community and directly taking care of all those who worked for him, Benjamin didn’t want his son abandoning his employees and the community where this factory stood for more than one hundred years. With the death of his father, Benjamin’s lifelong endeavor of helping those who were less fortunate had now become Edward’s reality. Now it was Edward’s responsibility that weighed so heavily upon his shoulders because of the dire economic circumstances of the economy that hit his community much worse than others.
Before mass production and production lines had become the way to mass produce everything, Edward’s grandfather, Horace, started the company, The House of Benedict, in the late 1800’s. The House of Benedict manufactured custom, handmade, wooden toys, cars, trucks, trains, planes, ships, even doll houses and doll house furniture. As Rolls Royce is to automobiles, the products of House of Benedict are those to the few who appreciated them and who could afford to buy them. Made laboriously one at a time, they accepted custom orders for those willing to pay the time and material price for pieces that had become works of art. One of a kind, no two pieces were exactly the same.
Decades later, going against technology, instead of embracing it, when all modern factories were automated and computerized and their inventory was scrutinized, counted, and cost accounted for, Benedict’s factory had a human production line of highly skilled workers. Finally taking the plunge and buying computers, now with 3D animated CAD CAM software, they could make anything that the customer wanted, so long as it was made of wood and not plastic. Trying to walk the fine line of production versus quality, even though the handmade quality was still there, it paled in comparison to how his grandfather and father made their products with love in mind, instead of profit. Their specialty, of course, was still custom wooden toys, costly, but still well worth the money.
Sadly, their business declined when plastic was cheaper to use than wood. Rather than buying his toys, people bought Legos or cheap imitations of his toys from China that sold for much less. The foreign mass produced toys that were licensed to large American toy companies and sold under their brand had routinely been recalled because of lead paint and other manufacturing defects that made their toys unsafe for children. Moreover, the inferior products that China made didn’t last much longer than the Christmas that they were given.
At the height of his father’s success, once the favorite and preferred toy, right up there with Lionel trains, Teddy Bears, Pogo sticks, and Duncan Yo-yos, and later Barbie dolls, no one wanted custom, handmade wooden toys anymore, when they could buy similar plastic toys for a fraction of the cost, first from Mexico, then from Taiwan, Japan, Sri Lanka, Bangladesh, and now from China. Now, the big seller was video games and competing against that was akin to bringing a straw to a gunfight.
Yet, compared to Benedict’s toys, most of the plastic toys made today were junk. Benedict’s toys were treasures that would last a lifetime. Benedict’s toys, especially the older ones, had become valuable collectors’ items traded and even sold at auction the world over. When the toy line fell short of production goals, beginning in the 1980’s, Edward started making furniture, chairs, tables, and hope chests mostly, copies of those toys, that decorated his doll houses, but made to full scale with the use of his CAD CAM software program.
Over the decades, the factory had become more than a business. With its huge tower with a clock face on all four sides that stopped working with the great New England Hurricane of 1938, the building was an icon in the community and everyone gave directions to and from places based on the central location of the House of Benedict. The building had slowly fallen into disrepair over the years. The property was so big, an eight story, brick building the size of an entire city block, it would take a huge amount of money to bring it back to the way it once was, the gem of Lowell Massachusetts but, hoping to do just that was Edward’s secret plan.
Edward couldn’t count the times he and his dad were offered money for his building and land, enough money so that he, his children, and their grandchildren would never have to work. Only, he couldn’t sell the property to someone who didn’t give a care about the workers, about the community and its residents, and about the long standing history behind the building. It was a factory that stopped toy production to assist in two World War efforts by making military barracks, housing materials, and furniture.
If he sold his prime, centrally located land to real estate developers that were eager to build luxury condos, he’d decimate an already impoverished community by putting so many people out of work for the sake of making more money, when he had more than enough money to last him ten lifetimes already. Even though the potential buyers promised they wouldn’t, they’d tear down his building. Once he sold them his building, they were free to do whatever they wanted. For sure, they’d level the lot and sell off all the building materials they could. The slate roof, the copper flashing, the interior woodwork, the antique doors, fixtures, hinges, doorknobs, lighting, and windows, even the old bricks and cobblestone that paved the courtyard and driveways, when all tallied the building materials were worth a small fortune and worth much more sold
piecemeal than they were when selling the building as a whole and in as is rundown condition.
Every year, the offers increased and every year he’d turn them down. Often tempted, he patiently waited for the right offer and the right economic time to cash in and retire. Finally, it came, when an investor, along with his realty agent, tax accountant, and architect, asked Edward for a tour of his factory. They wanted to make an offer on his property. Instead of tearing down the building, they wanted to refurbish it and hire many of his employees and others from the people in the community to work for them. They, no doubt, believed that once he saw their plans, he’d sell.
‘I wouldn’t even consider your offer, had you told me that you wanted to tear down the building,’ said Edward happy they realized the true value, charm, and characters of his building. ‘The fact that you not only want to refurbish the structure but also rehire many of my employees and others who live here would be a boon to the community.’
Yet, because of the recession, because real estate prices had fallen dramatically, their offer was not even half of what his highest offer had been in previous years. Moreover, the people they’d hire were only for temporary, low paying jobs, jobs that more favored the younger, unskilled workers than the older, well paid craftspeople that he had in his employ.
‘So, what do you think?’ They showed him their business plan.
Edward read their prospectus and reviewed all their drawings. Excited at first about their offer to buy his land and his building, it was then that he realized that they didn’t share his vision.
‘No thank you,’ he said.
‘No thank you? You’re crazy not to take my offer,’ said the investor, suddenly losing his temper, along with his business decorum, to his frustration in not getting Edward to agree to sell. ‘No one else in their right mind would offer you what I’m offering to buy this dilapidated building and this useless parcel of land.’
In the look that Edward gave the man for insulting his building, as if he had insulted his grandfather for building his precious building, even if they doubled their offer, he wouldn’t sell.
‘We can go two million dollars higher,’ said the real estate broker, ‘but that’s our final offer.’
‘In this economy and your accountant would assuredly agree,’ said their tax accountant, ‘you must consider the positive tax benefits of taking a loss on a property, such as this, one that is in such disrepair. We wouldn’t be tearing it down to sell of the bits and pieces but, instead, we’d make the property better, mixing old with new, wood and brick with glass and steel.’
‘I already have enough carryover losses,’ said Edward with a laugh. ‘I don’t need anymore.’
‘These are the plans,’ said the architect rolling out rolls of paper that filled Edward’s huge conference room table.
Edward looked over the plans with a jaundiced eye.
‘I don’t like your plans for my building,’ said Edward, as if rejecting a college, while considering at a life plan for his son.
‘This is what people want,’ said the architect. ‘They love living in old factory buildings, once refurbished and made modern. We can even make a place for you and your wife, a penthouse suite.’
‘I already have a home not far from here, thank you very much.’
‘Here’s the prospectus, the brochure, and our card. Talk it over with your financial people and please reconsider our offer,’ said the broker.
Before the meeting, Edward had carefully reviewed several exterior plans and several interior plans they had sent him by courier. Yet, all the plans were as devoid of character and imagination as the men were filled with greed. No doubt, they were hoping to but his building at a reduce rate to fatten their profit. The dollar signs they saw had nothing to do with his employees, the community, and/or with the people who lived here. After losing their jobs with Edward, many of his employees, the present residents who lived here, would assuredly be displaced for those who could afford to live here and buy the luxury apartments that would fill his building.
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