Friday.....America.....People...Assets or Liabilities?

An article in the January 18, 2010 issue of Forbes sheds a lot of light, and not only on the topic it is written about. Titled Carbon Windfall and written by Jonathan Fahey, it tells the success story of John Rowe, Exelon's CEO. He has been at the head of this utility for a long time and Exelon is labelled the country's most valuable utility. Through mergers, Rowe created Exelon in 2000 and promptly began selling coal fired power plants to rely on 17 nuclear reactors, by far the largest nuclear fleet in the nation. Rowe desires to be a visionary. The article quotes him in I thought climate legislation would come sooner or later and I'd rather have my money in the nuke fleet. Today, Exelon depends on this legislation being passed. I wrote in a previous blog how some electric utilities are pushing for cap and trade legislation for a different reason. The financial collapse of last year took its toll on the industry and cap and trade is one possible way to recoup those losses. It depends on the final decisions made by Congress on how companies will get the required permits. Everyone acknowledges that power prices will go up should this legislation become law. John Rowe is counting on making money through this price increase while his competitors suffer at a disadvantage for they will have expenses in complying with the emission restrictions. Both sides want the legislation but for different reasons. The article continues, the company (Exelon) views spending on lobbying for legislation almost like a capital expense and (Lowe) has emerged as a lobbyist for cap and trade. It gets tackier. Although Lowe is a Republican, Exelon has deep ties to the Obama administration. One Exelon executive helped advise Obama before he ran for President and is one of Obama's largest fundraisers. Obama's chief politcal strategist, David Axelrod, worked as a consultant to Exelon. Obama's chief of staff, Rahm Emanuel, helped create Exelon. The article reports that Emanuel e-mailed Rowe and asked for help before the vote on the carbon trade legislation. Exelon was one of the utilities that quit the United States Chamber of Commerce because of its opposition to the legislation. The writer of the article takes the position, which I disagree with, that fossil heavy utilities want the legislation because it would rather have the certainty of the legislation, over the unknown regulation the EPA would require. Commenting on the government's powers to limit excessive profits, Rowe says The government has innumerable ways to take money from us if they really want to (tell us about it.). The second part of the article examines how Exelon has succeeded. Rowe's heavy emphasis on efficiency is one reason...nothing wrong with that. Nuclear power plants take an average of 40 days for refueling (downtime), Exelon averages 27 days. Thousands of documents were drawn and codified on how to do a given task. The article goes on to describe a number of innovative ways Exelon increases efficiency and thus profits. It sounds like something out of Japan's original workforce philosophy, with one possible exception, and it's a big one. Japan cared just as much for its workers, for they were considered assets, even family. Now I don't have the slightest idea how Exelon treats its employees. I do know that part and parcel of the current rage for windfall profits and ever-increasing profit margins, in much of America, relegates its employees as little more than necessary liabilities. Exelon might not be like this but it would be encouraging to have read in the article of their appreciation and care for their employees. Cutting the outage time as drastically as Exelon does must put tremendous pressure on everyone involved as the article describes the initial shutdown as choreographed down to the minute, like a Nascar pit stop. Exelon is still seeking to grow, in fact they were turned down on two acquisitions in recent times. John Rowe has gambled and so far it has paid off but a frozen world puts Rowe's prediction on passage of the cap and trade in 2010 as better than one in four, as overly optimistic. It's an ugly article in many ways. What does it say when a CEO is gambling on higher electricity prices as the source for his profits? What does it say about concern for users of the electricity? What does it say about any utility heavily promoting and lobbying for cap and trade under the guise of helping the environment? This is not the first time in American history that industry and Wall Street seemed to lacking a soul and were intoxicated with personal profit, but it is the first time that it corresponds with the nation on the brink of losing its liberties and freedoms, with enemies at its doors, and an with potential second economic crisis that would dwarf the Depression. Today's New York Times posted and article by David Barboza, titled The Man who Predicted Enron's fall Sees a Bigger Collapse Ahead. Its about hedge fund architect James S. Chanos who bets on companies to lose and a country this time, China, is in his sights. Should China's economy collapse, the global economy collapses. We need a return to people oriented corporations in these treacherous times for all of the efficiency innovations in the world won't help when the determination of the workforce, an asset and a blessing, is what would be needed most.