17 October 2005

PRIDCO Slim(m)ing

Submitted for your disdain:

--PRIDCO, the Puerto Rico Industrial Development Company, a government agency with a track record of waste, ineffectiveness and inanity dating back to the 1970s.

--An agency with the following breakdown: 360 managers, 290 non-management union workers, a ratio of 1.24 "chiefs" for every "Indian." (Let's hear it for PRIDCO's organizational skills!)

--Their ongoing plan: to reduce said "work"force to 150 workers by firing hundreds and offering "early retirement" to a few dozen.

The Jenius is on record as indicating that cutting the size of the local government is not just needed, it's mandatory. And yes, these cuts are disruptive and create a huge perception of ill will. But in PRIDCO's case, the cuts are not enough. The whole agency should be deep-sixed right now.

Extremist positions are popular as "button-pushers." The Jenius isn't pushing buttons. He is merely stating what has become self-evident: PRIDCO is no longer useful to Puerto Rico's interests.

A 75+% cut in personnel is not--clearly not--an "adjustment for effectivity." It is not intended to create a "leaner, more efficient agency," because this implies that 24% of the old group can match or exceed what was once the province of a monolith four times larger. That begs two questions:

1) If 150 can do the work of 650, why were We paying for 650? Answer: Politics and the jobs-buying-votes system so endemic to democracies.

2) If 650 couldn't do enough to justify keeping this bag of crud agency alive, what are 150 people going to do to justify their existence? Answer: Nothing. They are being asked to do nothing and they will, with remarkable success, do exactly that.

The Jenius knows there are good, even great talents in PRIDCO. But they are a mere handful, best served by being released to serve in other areas where their talents can serve Us--and them--better.

The only possible answer to the PRIDCO situation is to simply eliminate the entire agency once and for all. As a bastion of "big box manufacturing," PRIDCO is as in tune with Our times as Victrolas. It seems logical to believe that the 150 remaining drones in the slimmer version of PRIDCO will be 75% of the "managers" and 25% of the "workers," reflecting the "monkeys plucking fleas from each other" social system We see in Our government. That kind of "top heavy" agency will basically be another place where mediocre ideas go into coma and die years later when life support is terminated because of budget cuts.

Is the "PRIDCO Plan" the solution? No. No plan will fit every agency and department in this government, but as a solution, what's happening to PRIDCO should be a first step in a series of similar cutbacks in Our government.

And the next target for massive personnel cuts should be a worthy one, not a backwater. That target is the Department of Education.

The Jenius Has Spoken.


Aníbal said...

(disclosure: I am a public employee...)

Facts. Puerto Rico has a population of almost 4 million. And over 300,000 public employes.

Facts. Massachussets has a population of a little more than 6 million. Public employee count? 80,000.

Brighter minds than me, hear my plea. please explain how the above statements are logical...

Luis said...


I thought as you when I first heard of the PRIDCO plan. But after reading today's END article (here) I changed my mind.

I think Mr. Silva is doing the right thing. First off, he is not cutting 350 employees and letting 150 old employees. He is cutting 'everyone' and opening every new post to competition. He says current workers will have priority on the new PRIDCO, but he says they will need to meet strict qualifications.

Another thing that I find excellent, is that in the new PRIDCO, promoters will only get a 50% salary. The other half will be a commission according to the number of industries they can establish in Puerto Rico. Finnally the government will start rewarding merit instead of a biweekly cheek for coming in.

To anibal,

I completely agree. Heck the whole federal government (excluding military) has a little over a million workers, for a country close to 300 million. It's absurd for our little island to have a quarter of the workforce the Federal Government has.

Yet all is not so bleak. According to El Vocero: http://www.vocero.com/noticia.asp?n=60883&d=10/10/2005 , there are 22,000 less government employees when compared to August 2004. So something is being done.

Gil C. Schmidt said...


First of all, thank you for writing.

I read the article in "Negocios" and, based on my 14 years of working with PRIDCO/Fomento, I still feel this plan is falling short of the mark. It seeks to cut back personnel at a time when other countries, notably Ireland, South Korea and that juggernaut, Singapore, are increasing their "global sales force."

The plan creates a "new agenda" based on a report that is 3, maybe 4 years behind the current economic reality of PR and does not take into account that the initiatives suggested by McKinsey are still aimed at "wage earners" rather than "growth companies." Fomento forced a manufacturing bias on the results. Evidence: A call center or medical device maker is basically a factory, one for phone calls, the other for some instrument or the other. That these are "major" initiatives is a bad sign, as they are both cost-sensitive, namely centered on wages, an area we should no longr try to compete in.

To reduce personnel and switch to 50% commission may be a good idea, but it seldom works. Human nature takes the change from "100% you 'earn'" to "50% you now MAY earn" quite badly. The predicted result: an exodus of promoters, followed by an influx of "carpetbaggers," promoters so intent on closing a deal that they literally shred the prospects that could be clients.

As for closing a deal, a government that can't get out of its own way to help businesses get off the ground in under a year isn't going to be able to close deals fast enough to keep good promoters around. This could lead to one of three results: (1) private companies take over this effort; (2) business organizations take over; (3) the goverment increases the number of paid promoters. I present them in descending order of value, with a 200% drop-off in quality from 1 to 2 and another 200% drop-off between 2 and 3.

Luis, I hope I write to you someday and say "I was wrong." Stay in touch, for you have an optimistic view that I share. (I actually am an optimist about PR; I'm just pessimistic about The Fools in charge...for now.)

Thank you again!