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> Increase pay/benefits to your rank and file employees for helping you get so much cash The auto industry did this through high wages and very large pension p

> Increase pay/benefits to your rank and file employees for helping you get so much cash The auto industry did this through high wages and very large pension plans, and got absolutely destroyed in '08 and also demonized by taxpayers for creating an undeserving "welfare class" of autoworkers that was too expensive to maintain. > Invest back in the business at reasonable levels so as to keep enough cash for an emergency fund What if you feel like any further investment yields negative return? Berkshire Hathaway has been sitting on cash for years because they felt that they couldn't put their money into any constituent businesses and generate the right return. Why purposefully throw money into a black hole?

adjkant 7y ago
> The auto industry did this through high wages and very large pension plans, and got absolutely destroyed in '08 and also demonized by taxpayers for creating an undeserving "welfare class" of autoworkers that was too expensive to maintain. I'm not sure I'd be making long term business decisions based on how reactionary people are to things after a crisis. I also don't think you're going to hear the argument that the reason the auto industry failed was because they were paying their rank and file workers too much... No one said use it all either, this is a balancing act, just as using up most of your free cash to buy stock back probably isn't a good long term idea either. > What if you feel like any further investment yields negative return? Why purposefully throw money into a black hole? First, yielding negative return and throwing into a black hole are two very different things. A negative return can either create more jobs for people, perform a social good, or help in some other way beyond raw return. Businesses of the scale of having billions in cash siting around are not going to run out of ways to improve their business efficiency.

adjkant 7y ago

> The auto industry did this through high wages and very large pension plans, and got absolutely destroyed in '08 and also demonized by taxpayers for creating an undeserving "welfare class" of autoworkers that was too expensive to maintain. I'm not sure I'd be making long term business decisions based on how reactionary people are to things after a crisis. I also don't think you're going to hear the argument that the reason the auto industry failed was because they were paying their rank and file workers too much... No one said use it all either, this is a balancing act, just as using up most of your free cash to buy stock back probably isn't a good long term idea either. > What if you feel like any further investment yields negative return? Why purposefully throw money into a black hole? First, yielding negative return and throwing into a black hole are two very different things. A negative return can either create more jobs for people, perform a social good, or help in some other way beyond raw return. Businesses of the scale of having billions in cash siting around are not going to run out of ways to improve their business efficiency.