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Corporations should care less about the buck
University Chronicle
EDITORIAL BOARD
The issue: Fingerhut will close within a year if a buyer isn’t found.
What we think: Corporations like Fingerhut should take more responsibility for the humanity of their workers rather than simply trying to make as much money as possible.
Federated Department Stores, Inc. bought Fingerhut in 1999 for $1.7 billion. For most citizens, $1.7 billion sounds like a pretty hefty amount of money, but for Federated, a company that operates department stores around the country, including Macy’s and Bloomingdale’s, the price tag showed a bargain deal. After all, Federated makes $15 billion per year.
Since Federated bought it, Minnetonka-based Fingerhut has had a few slow years, including 2000 when the company lost $200 million in operating profits. This number sounds big too, but to a multi-billion dollar company like Federated, the dent can’t really be that big, especially when the numbers for 2001 are expected to show a profit of $103 million.
The resurgence to the plus column for this company, the second largest catalog company (trailing only J. C. Penney) shows it is still a viable organization, one that can continue its 54-year tradition of selling discounted mail-order merchandise.
Why then, is Federated looking to close Fingerhut’s doors? Perhaps it’s all about the numbers. Selling Fingerhut will generate $1.1 billion to $1.3 billion, which, after repaying debts, will leave a hefty $950 million for owners. Quite a bit more than the $103 million for 2001.
The numbers that should mean more to Federated, though, are the numbers that will impact all of Fingerhut’s employees, not just the owners. These numbers include the 2,670 employees of the St. Cloud Fingerhut that will be out of work if the plant closes. Special attention should also be paid to other numbers, such as 6,000 (the number of employees nationwide) and 4,700 (the number of employees in Minnesota) or 54 (the number of years the company has been around).
What Federated needs to do is pay attention to these smaller, but more meaningful numbers. Keeping the humanity of America’s workers in tact is more important than adding millions and millions of more dollars to an already rich multi-billion dollar company.
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