September 8th. 2005,
Sent to Boston Globe but not published

Thank you for giving James Kilts a pulpit from which he can assure the rest of us that the Proctor and Gamble merger with Gillette is a good one (Globe, Op-Ed, September 8th., 2005, A17).

The unanswered question in his piece is: Good for whom?

All of the people he mentions who endorsed the merger represent just one of the many stakeholders in Gillette -- the shareholders. What about the employees -- many of them will lose jobs. What about the cities in which those employees live. They will lose the purchases of those employees with a knock-on de-multiplier effect: the stores and service establishments patronised by those employees will lose business. What about consumers? There is no mention by Mr Kilts of the benefits to consumers that the merged company will provide. If he did not mention them, does that mean there are none?

Of course Mr Kilts, who is now drawing a retainer as a Board Member of the New York Times Company (owner of of the Boston Globe), is the biggest beneficiary of all. He walks away with an enormous $156 million golden parachute.

Let's see what that means in terms that we can all understand. The average salary in Boston is $48,000. So, if Mr Kilts had declined this package, about 3,421 persons could have continued to be employed by Gillette in Boston for a year. Maybe those job losses could have been achieved by attrition rather than lay-off. Mr Kilts, of course, did not mention that in his paean to the merger.

In the interests of full disclosure he should have.

The picture is darker and more complex than that painted by Mr. Kilts. Even if the plant remains, with decision making moving from Boston to the headquarters in Cincinatti, can we be sure that Boston's concerns will be front and center? I am not sure.