conversation is an engine

How do you say “Fridley” in Irish?

To those who live as if words are worthless and refuse to see the role of systems in building wealth, let us now gaze on Medtronic’s deal to buy Covidien. What does $42.9 billion get you these days, besides a cohesive portfolio of medical devices and a bunch of intelligent workers and systems? Smart people are speculating it also buys freedom to spend foreign profits without worrying about more taxes, which may amount to a roughly $20 billion future spending spree.

Of course corporations will seek the best deal for making money—that is the project of corporations—and will surprise no one. Do Minnesotans worry a beloved company born and bred in Minnesota is growing up and leaving home? Of course. But the significant investment Medtronic has made in their operations in the state should cause worriers to back off a bit. A quick driving tour through Fridley and Mounds View reveal a rather permanent corporate presence.

How can you control chaos and churn?

But then—of course—stuff happens and things change. Which produces anxiety in hard-working people.

What I find interesting is that while the deal involves a significant exchange of money, it also changes a key definition that then dodges a set of tax requirements. Note this: becoming an Irish company is mostly in name only. The StarTribune quotes Eric Toder of the Urban-Brookings Tax Center as describing the newly formed Irish company an “accounting fiction.” So while Medtronic will always be a Minnesota company, it will become an Irish company. And there is money to be saved in being an Irish company. By cutting this deal—by pronouncing these words in international legal documents—a new thing happens at Medtronic that will please shareholders and worry local workers. JL Austin might call that corporate speech-act a performative. And there is no question that performative will change things in the real world.

[Full disclosure: The author has worked for Medtronic and continues to consult for Medtronic.] [At least the author did until posting this.]

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Image credit: Kirk Livingston