I have no idea whether IBM senior vice-president Bob Moffat is guilty of insider trading or not, though that’s what he was arrested for yesterday. What I do know is that Moffat’s job since 2005 has been as the architect of IBM’s project called LEAN, which is intended to adjust Big Blue’s global labor force to maximize profitability. I’ve written quite a bit about LEAN, much to the consternation of IBM, characterizing it in large part as a way to replace expensive older American workers with younger and cheaper workers in India and Argentina while cleverly dodging U.S. age discrimination and possibly other civil rights laws. Whatever the legality of LEAN it is downright mean and shows little respect for the people who made IBM what it is today.
What does it say, then, when the architect of LEAN is arrested for alleged insider trading?
The good news, I guess, is that he was caught. The rest of the news is bad. If Moffat is guilty as charged then it shows serious ethical and moral lapses at the very top of IBM (Moffat has been mentioned as a possible successor to IBM CEO Sam Palmisano). Even if he is proved innocent Moffat is still guilty of poor judgment in his choice of friends and of being a blabbermouth. Since Moffat is being charged, in part, with insider trading of IBM’s own shares, then LEAN itself should probably come under some scrutiny as a possible tool for generating insider profits.
Worst of all, this might well turn out to be yet another example of parasitic management using the power of the corporation entirely for self-enrichment. There is no insider tide that raises all boats. There is no insider trickling down, except perhaps in the manner of honor among thieves. Moffat and his gardener may have benefitted, the latter by getting to mow twice per week instead of once, but the rest of us — and certainly the 398,000 other people who work at IBM — are no better off for his alleged actions.
So Moffat is guilty or he’s stupid, neither of which says much for IBM.