CEO Says He May Lay Off Employees if Obama Re-elected

David Siegel, CEO of Westgate Resorts, emailed employees with his concerns.

October 11, 2012, 9:01 AM

Oct. 11, 2012 — -- Outspoken time-share mogul David Siegel surprised his thousands of employees in an email this week that indirectly stated that layoffs could be likely if President Obama is re-elected, which some analysts say have crossed the line as a CEO.

Siegel founded Westgate Resorts in Orlando in 1982. In an recent email to employees, he said he did not want to tell them how to vote, but wrote:

"You see, I can no longer support a system that penalizes the productive and gives to the unproductive," Siegel wrote in his email. "My motivation to work and to provide jobs will be destroyed, and with it, so will your opportunities. If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about."

Siegel closed the email with: "Signed, your boss."

The Orlando Sentinel received an anonymous email about Siegel's message by someone who said, "I feel like my boss is threatening me."

Siegel confirmed with the Orlando Sentinel that that he wrote the email, saying he felt "an obligation to keep them informed."

Siegel did not respond to ABC News' multiple requests for comment.

"Four years ago when Obama got elected we were doing a billion dollars a year in sales with 12,000 employees," he told the Orlando Sentinel. "As a result of the last four years, we are down to 7,000… We're still a viable company, but if they start taking money out of my pocket with higher taxes and ObamaCare, there's going to be less money to build resorts."

Stephen Bronars, chief economist with Welch Consulting, said it is unlikely the letter violated any labor law, but as a CEO who is responsible to stakeholders and employees, "people would view it as unwise."

"One of the toughest tasks for the owner of a company is to deliver a message that things aren't going well and that there will be cutbacks," Bronars said. "If you panic your employees you are most likely to lose the ones with the best outside options - exactly the ones you would hate to lose."

Though it is a private company, firms with 100 or more employees must tell employees at least 60 days in advance of a mass layoff or plant closing.

"But not like this," Bronars said.

Bronars added that his "only caveat" is that Siegel may know his employees "better than critics on the outside looking in."

In his email, Siegel continued, "So, when you make your decision to vote, ask yourself, which candidate understands the economics of business ownership and who doesn't? Whose policies will endanger your job? Answer those questions and you should know who might be the one capable of protecting and saving your job," he said.

Earlier this year, Siegel filed a lawsuit against a documentary filmmaker for defamation. He had starred with his wife, beauty queen Jackie Siegel, in the film, "The Queen of Versailles" about his attempt to build a 90,000 square-foot palace known as the "American Versailles."

"Even to this day, every dime I earn goes back into this company," he wrote. "Over the past four years I have had to stop building my dream house, cut back on all of my expenses, and take my kids out of private schools simply to keep this company strong and to keep you employed…"

Bronars said CEOs should be concerned about who will be the next president if that is related to regulations that impact labor costs, such as marginal tax rates paid by corporations and small businesses.

"I would expect labor regulations in a Romney administration to be more friendly to management and less friendly to organized labor," for issues such as the prevailing wage for companies hiring seasonal foreign workers through the H-2A and H-2B visa programs, he said.

But Bronars added that Congress and the National Labor Relations Board play a role in labor, "so it's unwise to put too much emphasis on the president's role in this area."

Bronars added that Siegel's comments are at odds with data from the past two years with a fall in layoffs in 2011 and 2012.

"Companies are hiring fewer workers than before the recession but downsizing has often occurred through attrition -- and not replacing workers who retired or quit -- since 2011," he said. "So I find it unlikely that we will see a big increase in layoffs in 2013 whoever is elected president. A more likely concern is that hiring continues at a slow pace and we experience stagnation in growth rather than a wave of mass layoffs."

Harry Holzer, public policy professor at Georgetown University, said he was "very skeptical" about CEOs' claims that one candidate will directly affect a company's business practices.

"We don't even know, if Barack Obama is re-elected, what policies will come forth because he will have to negotiate with Congress," Holzer said.

Holzer said Siegel's email may have been inappropriate in a corporate setting. He said other business leaders have expressed direct support of a candidate, such as former Costco CEO Jim Sinegal speaking at the Democratic National Convention and former General Electric CEO Jack Welch expressing support for Mitt Romney.

"They might let it be known that they have preferences but that goes differently than pushing their employees," Holzer said.

"No one knows how the whole fiscal cliff will be resolved," he said. "Right now, the uncertainty is bad for business. Almost any resolution would be preferable to the current stalemate."

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