I have personal experience that relates to King's post from today.

I was employed by IBM during their rough years. Some of their problems had been brought on by themselves and not listening to the field people. Some problems were the result of market changes. Down-sizing occurred nine of the 17 years I spent there. IBM got behind the marketing curve. Their stock price plummeted and competitors were excited that Big Blue was in trouble. What did IBM do?

They finally realized the business model that had driven IBM's phenomenal success was no longer viable. Executive management was brought in from the outside - a difficult concept in a company that prided itself on training its managers and promoting from within. We heard that the outside CEO was told, "Don't let IBM fail." He didn't. Many people took early retirement; product production lines were reassessed and revamped; a couple of inefficient lines of business were sold; one or two plants were closed.

We never knew if we would keep our jobs but we kept going. IBM came back to life. The sales force was streamlined. Today, positions within the company are quite different. (Full disclosure - eventually, I took one of the buyouts.)

Net, IBM struggled, made changes, adapted and is still a force to be reckoned with. Never did IBM ask some politician to bail them out.

Labels: economics