Dial tone deaf

Arkansas Business, June 16, 2008 by Gwen Moritz

EVEN IF HIS FATHER HADN'T built Alltel from the small, rural phone company that his mother's father founded, and even if Jack Stephens hadn't been his mentor, Scott Ford by any other name would be a player in Corporate America. He's just that smart and just that good. He's a master of the board room, and every acquisition he has touched turned to gold for investors in Alltel, of which there have been many in Arkansas.

Unfortunately, young Mr. Ford is not (in the words of Jerry Maguire) a master of the living room. As I watched video (available at ArkansasBusiness. com/Alltel-Verizon) of his press conference addressing the sale of Alltel to Verizon, I was struck by just how cavalierly he dismissed the very real and completely reasonable fears of Alltel employees in Little Rock.

Everything--well, almost everything--Ford said at the press conference was true, of course. Most Alltel employees will simply be doing the same job for another, bigger company. The management's first duty was to maximize return for investors. Alltel had been "taking synergies out of businesses" for a dozen years and is on the other end of the deal this time.

He seemed to be trying to commiserate when he referred to "those of us" in "corporate staff functions" whose "lives most likely will change." But the change coming to Scott Ford's life is not like that coming to the lives of the other corporate staffers who weren't born to Joe and Jo Ellen Wilbourn Ford and who weren't mentored by Jack Stephens and who weren't C-level at the time TPG and Goldman Sachs bought Alltel last November. He'll be walking away with more money in severance pay than even well-paid Alltel employees will earn in a lifetime, not to mention the 30 percent return he'll make on the money he (but few other Alltel employees) had the chance to invest in privately held Alltel.

Scott Ford doesn't have to worry about what his next job will be or where it will be or how much it will pay and what kind of health insurance benefits it will offer. If he ever worried about how he could afford to educate his kids, he sure isn't worried about that now. For mid-level "corporate staff functions" at Alltel, without whose work Ford wouldn't be so well fixed, these are very real concerns.

So when Ford said, "But it's not a tragedy. Everybody that's had tragedy in their lives knows the difference," he made an awfully big assumption. A glut of suddenly unemployed telecom workers in a market the size of Little Rock means some people are going to either take a step backward in their standards of living or be forced to uproot their families and leave friends and relatives behind. And that can feel pretty tragic, especially if it just happens to come at a very bad time to try to sell a house.

Now, Scott Ford certainly knows all this, and perhaps he was just trying to stay upbeat. But it seems to me that he could have remained upbeat and positive while expressing a modicum of sympathy for employees who helped make him fabulously wealthy, rather than dismissing their anxiety as simply fear of the unknown. It's not the unknown they fear; it's what they know about corporate mergers. They've been the windshield, and they've seen what happens to the bug.

While he wasn't expressing much appreciation for the fact that employees' lives would be turned upside down, Scott Ford seemed almost giddy with admiration for the deal that Verizon struck. He used phrases like "very shrewd" and "very smart" and "a great Corporate America move for the financial system." The deal, he said, demonstrated "the great thing about capitalism in America."

Capitalism is great, and if Ford says this was a shrewd deal, I'm sure it is. But I have friends whose futures are now very uncertain, and the realization that this deal returned some liquidity to a banking system that was suffering from its own excesses isn't going to make it easier for them to sleep at night.

Gwen Moritz is editor of Arkansas Business. E-mail her at gmoritz@abpg.com.