A group of well-connected Washington entrepreneurs is trying to corner the market on the business of going out of business.
They are the owners and directors of Displacement Corp. of America, a new shop in town dedicated to the orderly shutdown of terminally ill companies.
It is a corporate hospice movement, meant to provide services for which the principals say there is a steadily increasing need.
"In the first half of 1982, 361 plants closed. In light of the recent rise in the unemployment rate to 10.1% and the drop in the factory utilization rate from 70% in 1981 to a new forty year low of 65% today, DCOA foresees a total of over 1000 plants closing by the end of 1982." -- DCOA press release, Oct. 25.
"It sounds ghoulish," said Harold L. Sheppard, DCOA's director of program development. "But you have the example of the hospice movement, where people make their living by helping families cope with the traumatic experience of death. I don't think that's ghoulish. It helps. The alternative, to do nothing, is worse."
Sheppard worked on various employment and aging projects for Presidents Lyndon B. Johnson and Jimmy Carter. He was on the scene in 1963 and 1964, helping to ease the social and municipal pains caused by the shutdown of the Studebaker Auto Co. in South Bend, Ind.
"250,000 workers will be displaced in 1982 as the result of total and partial plant closings. As many as 1 million workers have already been displaced through plant closings and other business interruptions this year." -- DCOA press release.
"The typical management approach to layoffs is to give an employe 'due notice' and severance pay," said Glenn E. Dropkin, DCOA's president. "That may be okay when you're laying off one or a few people. But with plant closings, you don't get a trickle of people into the local labor market and social service network. You get a wave.
"The unemployment offices are swamped, the remaining job market is saturated, everything is hit at once," said Dropkin, who worked as a specialist in plant closings and mass layoffs for the National Association of Manufacturers.
Dropkin said his company's strategy is to begin working with failing plants months before their demise. "That way, we have time to research the local job market to find out what other jobs are available, what skills are needed. We can help the company work with its employes in finding other jobs. The transition can be orderly . . . The problems you see today, the psychological stress, the pressure, come about because most managers aren't trained to implement shutdowns," Dropkin said.
"By helping workers find new jobs more quickly, employers can realize huge cost savings through reduced severance payments and through reduced future unemployment insurance premiums. Companies can save $14.50 for every $1.00 they invest in planned plant closings." -- DCOA press release.
"We all would like a world in which no shutdowns occur. But that is not facing the world of reality," DCOA board chairman William J. Usery said in a speech last month. Usery, secretary of labor under President Gerald Ford, has held five presidential appointments, three of which required Senate confirmation.
"Reality requires that we develop mature, effective policies and specific forms of technical assistance to help employers and employes in taking the most human and least disruptive route in dealing with the unpleasant reality of employe displacement in a dynamic economy," Usery said in his speech announcing the creation of DCOA.