Times change, many refuse to change with them

[LS2JSTS]

Perhaps if he had won his other landmark case, today things would be very different.

If you recall it was the Dodge brothers and his other investors who sued Ford to get Ford to distribute the profits to them. At the time he was sitting on close to 30 million dollars and wanted to further expand manufacturing capacity and employment numbers. Henry maintained that the purpose of the corporation was to grow itself and it's people, "to do the greatest good for mankind"...no coincidence that it would make him rich at the same time.

Unfortunately the Dodge brothers won, they and the investors were given their dividend, or at least a portion of what they sought. Forever more it would be written in stone that the primary function of a corporation was to return a profit to the investors/owners of that company.

Just a few years later, Ford had bought them all out and went ahead with his plans...history shows imo, Ford was right, the Dodge brothers and the investors were short sighted. The same short sighted quick profit mentality we see in business and it's bottom line profit mentality today.

 

[crw]

http://mjperry.blogspot.com/2010/10/general-motors-and-state-of-california.html

Sink or swim, fellas... How is Ford profitable right now, 2010? They are with much better management than GM. How can Idaho have a balanced budget and California, with much more in the way of resource, be billions in debt? Better management.

When I say "management", I mean all forms of management, including unions. Unions are living in a fantasy world. Public service unions expect full salary and benefits for retirees after 20 or 25 years of service. That, will never pan out. It's a pipe dream, completely unsustainable. The sooner those involved understand that, the better.

Meanwhile, I've been working 20 years and probably have another 25 to go. I don't expect to retire until at least 70, and am saving for my own retirement. As long as we have a hedge against inflation (stock market) I hope to survive.

 

[M1Accord]

Originally Posted By: Tempest
Quote:
The CEOs can't do the jobs of the mainline workers.

How many mainline workers can do the job of the CEO? The fact of the matter is that "evil and greedy" CEO is doing the work that ALLOWS those mainline workers to have a job.

He has to worry about rent, benefits, regulations, taxes, sales, labor relations, investments, customer service, productivity....

Dealing with ALL of that is not easy, and deserves a good wage.

You got to be [censored] me right? It's not the CEOs that develop the cars, build the car, or sale the car. The CEOs need the linemen much more than it is the other way around.

What do you do for a living? You seem to be a well trained slave to think that Americans should be acting like a trained Chinese hordes.

 

[mechanicx]

Originally Posted By: LS2JSTS
Perhaps if he had won his other landmark case, today things would be very different.

If you recall it was the Dodge brothers and his other investors who sued Ford to get Ford to distribute the profits to them. At the time he was sitting on close to 30 million dollars and wanted to further expand manufacturing capacity and employment numbers. Henry maintained that the purpose of the corporation was to grow itself and it's people, "to do the greatest good for mankind"...no coincidence that it would make him rich at the same time.

Unfortunately the Dodge brothers won, they and the investors were given their dividend, or at least a portion of what they sought. Forever more it would be written in stone that the primary function of a corporation was to return a profit to the investors/owners of that company.

Just a few years later, Ford had bought them all out and went ahead with his plans...history shows imo, Ford was right, the Dodge brothers and the investors were short sighted. The same short sighted quick profit mentality we see in business and it's bottom line profit mentality today.


Very well stated. And that is pretty much the crux of the issue. There are not too many if any business leaders like Ford around anymore, but plenty of the short-sighted quick profit mentality ones.

 

[Vizzy]

Originally Posted By: Tempest


Free trade has in fact, been good for the US.... (ELITE TOP 2% OF THE INCOME EARNERS..!)


Tempest, you are INSANE!!!!!!

 

[Tempest]

Originally Posted By: LS2JSTS
Perhaps if he had won his other landmark case, today things would be very different.

If you recall it was the Dodge brothers and his other investors who sued Ford to get Ford to distribute the profits to them. At the time he was sitting on close to 30 million dollars and wanted to further expand manufacturing capacity and employment numbers. Henry maintained that the purpose of the corporation was to grow itself and it's people, "to do the greatest good for mankind"...no coincidence that it would make him rich at the same time.

Unfortunately the Dodge brothers won, they and the investors were given their dividend, or at least a portion of what they sought. Forever more it would be written in stone that the primary function of a corporation was to return a profit to the investors/owners of that company.

Just a few years later, Ford had bought them all out and went ahead with his plans...history shows imo, Ford was right, the Dodge brothers and the investors were short sighted. The same short sighted quick profit mentality we see in business and it's bottom line profit mentality today.

Don't forget that he was trying to keep money out of the hands of the Dodge brothers because they were starting their own car company...

 

[Tempest]

Quote:
It's not the CEOs that develop the cars, build the car, or sale the car. The CEOs need the linemen much more than it is the other way around.

So I take it that the lineman develops the cars, runs the numbers, figures the cost of products, the cost of benefits, figuring if the product will be profitable, deciding what fickle customers will want 5 years down the road, dealing with unions strikes, the cost of gas....

Sorry, no.
Quote:
trained Chinese hordes

 

[Spyder7]

Originally Posted By: Tempest
Quote:
It's not the CEOs that develop the cars, build the car, or sale the car. The CEOs need the linemen much more than it is the other way around.

So I take it that the lineman develops the cars, runs the numbers, figures the cost of products, the cost of benefits, figuring if the product will be profitable, deciding what fickle customers will want 5 years down the road, dealing with unions strikes, the cost of gas....

Sorry, no.
Quote:
trained Chinese hordes

By any reasonable measure, CEO pay in recent decades has lost touch completely with that of the engine that drives the company. Its become plain ludicrous.

IMHO their based pay should be a reasonable 6 figure salary, MAXIMUM, with any additional earnings tied directly to the performance of the company; if the company does well, the CEO is then rewarded accordingly and still does well. If performance is under par, he makes his base salary for doing the job of overseeing the operations that netted no tangible return to investors, and is rewarded no better than they are.

I think that should actually be, and would serve as the ideal model, from the top down, but by using stock (and corresponding ownership) as the reward rather than fixed pay raises or the like. Employees, from the CEO on down, go in making a base pay for the work they do. After an arbitrary term of service is put into the company, then in lieu of a raise they receive a small portion of stock in the company.

You want to see quality of production go up, then you do it that way and you will. The problem in many companies, from QC to performance, is that most of the labor force are completely divorced from both the company and the product of their labor. The first is the product of the non-existent job security that has permeated the working class today; the second, from the factory assembly line approach to every type of product that has taken away the satisfaction from the craftsman of yesterday who could look at the final product, and say to himself: 'I built that.'

We can't turn back the clock to the craftsman days, but corporate culture could shift to a more invested team approach where every employ could take pride and profit from knowing 'we built that.' As it stands now there is a lack of pride, ownership, or dues felt owed to any employer. Most workers see their jobs, because of the way things are structured, as a paycheck and little else.

Today's status quo isn't working. A look at enough statistics to paint a broad enough context for how bad its gotten, and will continue to get, can show that readily enough; yet its not yet beyond salvage. But changes need to made, including on the way goods are imported if the changes are to be given the needed time to produce effect, for things to get better for everyone - and not just the guy sitting on top of the thousands strong workforce who is the only one profiting from their labor.

-Spyder

 

[Tempest]

Quote:
One popular explanation is that executive salaries are set by boards of directors who are spending the stockholders' money and do not care that they are overpaying a CEO, who may be the one responsible for putting them on the board of directors in the first place.

It makes a neat picture and may even be true in some cases. What deals a body blow to this theory, however, is that CEO compensation is even higher in corporations owned by a few giant investment firms, as distinguished from corporations owned by thousands of individual stockholders.

In other words, it is precisely where people are spending their own money and have financial expertise that they bid highest for CEOs. It is precisely where people most fully understand the difference that the right CEO can make in a corporation's profitability that they are willing to bid what it takes to get the executive they want.

http://townhall.com/columnists/ThomasSowell/2007/01/23/the_greed_fallacy
Quote:
What about complaints about CEOs earning so much more than the average worker? Before looking at CEOs, let's look at another area of huge pay differences. According to Forbes' Celebrity 100 list, Oprah Winfrey earned $260 million. Even if her makeup person or cameraman earned $100,000, she earns thousands of times what they earn. Among the celebrities earning hundreds or thousands of times more than the people who work with them are: Steven Spielberg ($110 million), Tiger Woods ($100 million), Jay Leno ($32 million) and Dr. Phil ($30 million). According to Forbes, the top 10 celebrities and athletes earned an average of $116 million in 2004 compared to an average of $59 million earned by the top 10 corporate CEOs.

http://www.wnd.com/index.php?pageId=45337

 

[Spyder7]

I don't see celebrity compensation as having any bearing on CEO compensation. Its a red herring as that's an apples to oranges comparison and another issue entirely that has no bearing on the thread subject matter.

That said, I will point out that athletes are paid on their ability to perform; if they don't perform, they don't make the majors and if they cease to perform, they get cut or traded. Also, part of their pay is meant to offset the risk of physical, career ending injuries many face, and the relative short period over which they paid productive salaries - in most sports, this may be over a 10 year period, after a 20+ year period of developing those skills they are so well paid for.

In the case of celebrities, the name says it all - their pay isn`t about performance, but about image and popularity. Two characteristics that are entirely irrelevant to whether a CEO is good or poor at what he does, and how his pay should be structured.

There are always exceptions, but they don't form the rule or make the comparison valid.

-Spyder

 

[LS2JSTS]

Originally Posted By: Tempest
Originally Posted By: LS2JSTS
Perhaps if he had won his other landmark case, today things would be very different.

If you recall it was the Dodge brothers and his other investors who sued Ford to get Ford to distribute the profits to them. At the time he was sitting on close to 30 million dollars and wanted to further expand manufacturing capacity and employment numbers. Henry maintained that the purpose of the corporation was to grow itself and it's people, "to do the greatest good for mankind"...no coincidence that it would make him rich at the same time.

Unfortunately the Dodge brothers won, they and the investors were given their dividend, or at least a portion of what they sought. Forever more it would be written in stone that the primary function of a corporation was to return a profit to the investors/owners of that company.

Just a few years later, Ford had bought them all out and went ahead with his plans...history shows imo, Ford was right, the Dodge brothers and the investors were short sighted. The same short sighted quick profit mentality we see in business and it's bottom line profit mentality today.

Don't forget that he was trying to keep money out of the hands of the Dodge brothers because they were starting their own car company...


Well, not really.

The Dodge Brothers company was founded before the FoMoCo even existed. By 1914 they were building the Model 30 and on their way to becomming the number two manufacturer, the Model 30 was very popular. The lawsuit came two years after this, when Ford wanted to plow ALL the profits back into the company and build the Rouge Complex. The question was never, should there be a dividend, it was more about what the split would be.

Assigning alternative/revisionist motives for the lawsuit works well in hind sight. But the fact of the matter is that Ford wanted to build Rouge, it was the dream currently going around in his head...and he needed all the cash he could raise to do it. If Ford didnt want the Dodge Brothers to have cash, he never would have bought them out and made them filthy rich...affording them all the cash they needed to grow their competitive company. No, he would have paid them their usual 1 or 2 million dollar dividend and gone on as usual.

 

[Duffman77]

Living wage???
Part of the problem is our new age media of reality TV. People see the Paris Hilton lifestyle and somehow think that they are entitled to it to but maybe on a lower extent. Your wife/kids don't need $300 shoes, $1000 handbags, designer everything... you don't need a 3000 sq foot house or granite counter tops. You don't need a new car every 3 years or a $40,000 vehicle for that matter.

Other people thought they could take out second mortgages and become real estate barons. Housing correction anyone?

Fact of the matter is that any good or service that can be outsourced overseas will have to compete on a global market. That is a reality that cant be undone, we are now feeling a long coming correction, denying that it is happening or blaming the “haves” will not fix anything.

 

[mechanicx]

I don't really agree with Oprah Winfrey's salary or other TV celebrities, let alone how they pay all the people who make their show possible. She or other stars are basically the CEO of their shows. Even if you watch the show that doesn't mean you support that so much money is paid in advertising with the products everyone buys.This is a big part of the reason things cost as much as they do and real workers are getting squeezed. If an actor in a movie earns their salary from tickets sold or a musician then if they can make a billion dollars that's fine by me. It still doesn't mean I have to agree with how they share pay with their production crew.

I think comparing CEOs, celebrities and royalty is actually a good comparison. They are all compensated more for emotive rather than tangible reasons and all are of about equal worth(lessness). CEO's have become the new clebrity/royalty nowadays. Having said all that, still a celebrity draws the viewers and that's why they draw the money. Today's CEO can run a company in the ground and still draw the money.

 

[Tempest]

Quote:
This is a big part of the reason things cost as much as they do and real workers are getting squeezed.

Here is the real reason:

And this:

CEO pay is meaningless.

And why is it anyone's business what a private company wants to pay it's executives? The company doesn't owe you anything and you don't owe the company anything.
This is pure jealousy and class envy. Emotive, rather than tangible reasons.

 

[mechanicx]

Originally Posted By: Tempest


CEO pay is meaningless.

And why is it anyone's business what a private company wants to pay it's executives? The company doesn't owe you anything and you don't owe the company anything.
This is pure jealousy and class envy. Emotive, rather than tangible reasons.


That's a very simplistic way of looking at it. It depends on if the company is truely private, and not getting government contracts, tax breaks etc. Or a bank that got bailed out while the executives made millions. Or maybe if your retirement is invested in the company's stock. Putting that aside, maybe someone doesn't want to do business with a company that they would not be willing to work for. There could be a number of reasons of principle besides class envy and jealousy. Class envy and jealous goes both ways, you know. If you think upper-class people aren't jealous and envious as any group, then I don't know what to tell you. But if a small group hord wealth that is others' business since effects them economically. I left out your graphs that put all the blame on gov spending, but you do realize there are plenty of countries with low spending and workers still being 'squeezed' as much or more, so I'd say that's faulty attribution. I don't know you just make out like it's good for a small group to be exeedingly rich and that everything else is bad. No offense but it just seems like an extreme view and extremes are usually incorrect.

 

[Spyder7]

Originally Posted By: Tempest
Quote:
This is a big part of the reason things cost as much as they do and real workers are getting squeezed.

Here is the real reason:

And this:

CEO pay is meaningless.

And why is it anyone's business what a private company wants to pay it's executives? The company doesn't owe you anything and you don't owe the company anything.
This is pure jealousy and class envy. Emotive, rather than tangible reasons.


If you look at the graph, it proves my point (despite what you may have intended). Though it was to fund U.S. participation in the 2nd world war, there is no denying that government spending boom erased the unemployment that plagued the country for decades before it, and created an enormous manufacturing based that continued on long after the war ended, and also created the much hailed 1950s middle class.

Back then CEOs were paid a reasonable salary, as were their workers. Tariffs and protectionist schemes existed to ensure the American manufacturing base remained strong. Despite massive debt taken on to fund the war effort, the US - and the middle and working classes - prospered.

In the 1970s this began to decline. But the 80s, and into the 90s, things were in free fall. That has continued into today.

GDP may have continued to increase, but there has been a massive loss in wealth from the middle and working class, while the top 1% has grown astronomically in their (ever expanding) piece of the pie.

Pointing to things like Paris Hilton worship oversimplifies the problem. Its a symptom of a malady, not the cause - no more than, in Roman times, what passed for democracy (and despite the dictatorship that existed for centuries, Rome was a republic, the people did have their senate, and elections were held) then kept the people docile - so long as they had their bread and circuses.

That the elections were corrupt, the candidates for every office limited to those from only the richest segment of society who had the needed connections and could afford the bribes necessary, still passed - to the Roman citizen of the time - as democratic government and the best form of civilization of the time, as the size and prosperity of the empire could readily be pointed as proof to.

I'm not making any direct comparisons. I bring it up only to point out that eventually the Roman empire became too riddled with internal problems to continue to exist, and when the tipping point came, it crashed and was succeeded by other empires.

"The West" would be the present empire, I suppose, given our prosperity and influence. What prosperity isn't given away is becoming so concentrated that it is a problem, as its something more at home in feudal systems, Mussolini's Italy, or the former USSR. It is not democratic, and as in those former systems, there will come a tipping point where internal contradictions (one being the tenet that every American is entitled to the pursuit of happiness; the corollary to that is the pursuit of wealth, however that "American dream" can exist only so long as one can have a reasonable chance of achieving it) will lead to either (bloody) revolt; reform; or collapse.

I single the US out only to the degree that it best typifies the present malady that afflicts the "West" to varying degrees: if, or when, any of the above occur it will send tidal waves across other nations, and the current status quo will change.

-Spyder

 

[Vizzy]

Tempest...

Please explain why so many CEOs even when they fail miserably seem to get huge rewards, and are often never fired, just shuffled around to another "division" .

As a rank and file employee THAT CERTAINLY IS MY BUSINESS.

If the typical employee doesn't perform well or fails to perform they are most often fired!

That is another problem with the elite execs that are put in charge of these companies they simply DO NOT lead by example.. I can promise you that you will get NO employee loyality will the likes of this [censored] going on in an organization.

 

[Spazdog]

Originally Posted By: Vizzy
Tempest...
Please explain why so many CEOs even when they fail miserably seem to get huge rewards, and are often never fired, just shuffled around to another "division" .

CNBC named Chrysler (and former Home Depot) CEO Robert Nardelli the "Worst CEO of all Time". He left on his own terms

CEO Bob Eaton presided over Chrysler immediately after Iaccoca. At that time, Chrysler was one of the most dynamic car makers. Like it or not, the Ram forced Ford and GM back to the drawing boards. The LH platform cars were way ahead of the W-body at GM and D186 platform at Ford. The Jeep Grand Cherokee earned every one of it's accolades. But NONE of the credit for those designs go to Eaton. All those designs were already under development. He sat on those designs with virtually no updates and no attention to quality concerns. His sole purpose seems to be to sell the company to a foreign interest. (Daimler Mercedes Benz) he brought in only the worst of GM manangement techniques. He left with a big wad of cash.

CEO Bernd Pischetsrieder did get terminated.
Bimmer-philes disagree with me strongly but I think he didn't really want Rover. I think he wanted a stake in Honda or to just get Honda out of producing cars in Europe. his subordinates didn't cross thier t's and dot thier i's and BMW had to go to Japan to sign off on the deal as well as forfeit the rights to produce Rovers in Asia to Honda.

He saw the writing on the wall with Honda. with the introduction of Acura, magazines proclaimed that "Honda Builds a Better 5-Series!" The NSX was everything the legendary M1 was in an aluminum body. And they had turned Rover cars into a legitimate competitor for many BMW models if in nothing else but "snob factor". To Bernd, BMW was "the motorcycle company that made great automobiles", not Honda. He had seen the way Honda attacked the motorcycle world and now it seemed they were doing the same with cars.

Rover ultimately cost BMW $6-Billion and Pischetsrieder his job. But I think his motive was good and MINI may bea success afterall if they don't fall into the PT Cruiser design trap.

So to me, the exception proves the rule.

 

[Tempest]

Quote:
but there has been a massive loss in wealth from the middle and working class,

Or not:
http://www.nber.org/digest/oct08/w13953.html

http://mjperry.blogspot.com/2008/06/real-compensation-has-risen-with.html

http://www.cato.org/pub_display.php?pub_id=6655

 

[Spyder7]

Tempest, the properly worded articles and cherry picked statistics can demonstrate whatever point you want to illustrate. And anything posted from the Cato Institute on the subject isn't worth the time it would take to even glance at it as far as this subject goes. Not only are they NOT any kind of impartial body, they are a "think-tank" and policy formulation organization (i.e., government lobbyist) whose membership is made up exclusively of card carrying neo-conservatives (or neo-liberal, take your pick of terms as they are interchangeable) with their own policy agenda that they make no secret about. Free markets and the supposed benefits it brings to all is something they've claimed long before NAFTA and such even existed.

This is a pile of streaming manure. The facts, whether you want to admit them or not, are that:

1. The middle class is not only shrinking, but those comprising both its ranks and those of the working classes, are worse off than they ever were. This began decades ago and the rate has only been accelerating.

2. The wealth that was once held by this segment didn't simply vanish; it was merely transferred: from the middle class to the wealthiest percentiles of society.

This is not something that is debatable. Political scientists, economists, and sociologists have observed this wealth transfer taking place for decades and have produced volumes of paper to substantiate the same claims I have made here (and I acknowledge them because it was part of the material I covered as an undergrad while shifting back and forth between political economy and behavioral science, or social psychology, as my social science concentration that was to prepare for further post-graduate study).

The only thing that's debated anymore, are the causal factors, and how much influence each has had on our new reality. Those who oppose globalization and free trade, point the finger mainly at those forces (and its conceivable, and even likely, that this is why oppose free trade and globalization). Others attribute it to technological developments that have rendered much domestic manufacturing "obsolete," and the transference of this pool of labor from better paying manufacturing jobs to lower paying service sector jobs. And on it goes. The list of likely causes are many, and with the overlap among them, exact causation has proven impossible to nail down.

Selective statistics prove nothing, and anybody (such as myself) who has studied even basic statistics and the subjects they are used in, knows this. For statistics to be meaningful, you have to look at many indicators and compare them to intervals across a fairly lengthy period of time. The most useless of all statistics are those compiled by special interest groups who have a special interest (hence the term they are referred to) in using measures the paint the picture that is in accord with the very policies they promote.

Nice try though, but unlike the "people in this thread who have no grasp of economics" you referred to earlier in this thread, I did my economics and business electives, and I also did a 4th year undergrad course taught by the department head in my major on the labor market and unemployment, and which was grounded in a study of how government policy and spending has evolved since the time of Keynes and his (then) revolutionary impact on macroeconomics, coupled with the transformation in the methods of domestic production, shifts and changes within the labor market, and the net effects of this transformation.

By the way I also WORK in a field where we deal daily, face to face, with the products of our evolving society. I hear their stories, and that real world, first hand experience has strongly influenced the beliefs I hold today.

And I then get to compare my front line experience with those of the policy makers (in government, and within my own health care corporation), and take stock of how they compare to one another. And that's all I can say about that as, even in my personal time, I'm not permitted to discuss that issue any further - as much as I'd love to (but I love my job more).

-Spyder