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Historically, companies - specifically their leadership - has tried to get the most they can out of people for the lowest cost. It has often gotten into ways th

by mfer 7y ago

Historically, companies - specifically their leadership - has tried to get the most they can out of people for the lowest cost. It has often gotten into ways that would be considered abusive today. Are people just a thing in a financial transaction where each side tries to get the most out of the other at the least cost? If someone thinks that then it's kind of a sad view on humanity.

seibelj 7y ago
Companies must optimize the cost of all inputs. No matter how much unions want to be paid, the market sets the price for cars, and if labor demands an absurd amount of money that prices GM's cars above the market price, the cars won't sell. This isn't "abuse", it's a free market system.
- mfer 7y ago
  Are companies all optimizing for cost? Isn't there a temptation to optimize for executive compensation? What it manufacturing was sent to the place in the world with the lowest overall expense. The extra money made could be put into bonuses and raises for execs. This is an honest temptation. It's not just about the company health. It prioritizes some employees over other employees. It's more than optimizing expenses.
  - seibelj 7y ago
    Every company takes inputs (labor and physical goods) and produces outputs (products and services). GM is not the only producer of cars, this is a very competitive industry. If they sell a car for $25,000 they can't simply raise the price without consequence - there are competitors' cars for sale. So how will they cover the extra expense demanded by labor? It sounds like you believe executives are paid too much, so the extra money to pay labor should come out of executive compensation. However, the vast majority of executive compensation is in the form of equity, and labor's demand for more cash will punish the stock price. Plus there really isn't that many executives and you can't squeeze them enough to cover the extra spend on labor.

by mfer 7y ago

seibelj 7y ago

Companies must optimize the cost of all inputs. No matter how much unions want to be paid, the market sets the price for cars, and if labor demands an absurd amount of money that prices GM's cars above the market price, the cars won't sell. This isn't "abuse", it's a free market system.

mfer 7y ago
Are companies all optimizing for cost? Isn't there a temptation to optimize for executive compensation? What it manufacturing was sent to the place in the world with the lowest overall expense. The extra money made could be put into bonuses and raises for execs. This is an honest temptation. It's not just about the company health. It prioritizes some employees over other employees. It's more than optimizing expenses.
- seibelj 7y ago
  Every company takes inputs (labor and physical goods) and produces outputs (products and services). GM is not the only producer of cars, this is a very competitive industry. If they sell a car for $25,000 they can't simply raise the price without consequence - there are competitors' cars for sale. So how will they cover the extra expense demanded by labor? It sounds like you believe executives are paid too much, so the extra money to pay labor should come out of executive compensation. However, the vast majority of executive compensation is in the form of equity, and labor's demand for more cash will punish the stock price. Plus there really isn't that many executives and you can't squeeze them enough to cover the extra spend on labor.