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> bad salespeople More like the business culture is in serious need of recalibration. At the same time, some of it is easy to understand. Manufacturing is ha
by robomartin 5y ago
> bad salespeople
More like the business culture is in serious need of recalibration.
At the same time, some of it is easy to understand. Manufacturing is hard, for most, unimaginably hard. The sad reality in the US is that, because of costs and the layers of bullshit you have to deal with, the easiest way to survive is to focus on high dollar/high margin markets. That means that if you can land jobs in aerospace or government contracts you can be set. You might bring in other work on a very selective basis, yet, for the most part, your "meat and potatoes" has to be --by necessity-- the low volume/high margin stuff.
Going back to the sales folks. When your job is to bring in just a few deals per year and, more importantly, keep the customers you have, you are not going to kill yourself for every opportunity put on your desk. Sales people in the US are generally compensated in a mercenary fashion (something I have never liked). You get to make some baseline and then get paid on some percentage of what you land. This does not make for a sales person who actually cares about every single potential customer. In the long run they will, very naturally, optimize for their own ROI.
So, it can't be boiled down to "bad salespeople". There's a lot more to it than that. At this point thousands of elements working together to make it almost impossible to compete. Simple example: Stupid-as-fuck oil and policy that makes it so fuel and oil derivative products (oils, lubricants, plastics, etc.) cost more. So trucking your materials to your factory to make something cost more. Now we force a doubling of the minimum wage. Innocent enough, right? Well, the guy making $10 is now making $15. The folks making $15 now demand $20 (after all, they are not minimum wage workers). And so on up the entire wage scale. Your COGS goes up and your customers are not going to spend one additional dime for your products unless there is no other option. And this is where China comes in and is able to force such low pricing that your ONLY available option is to move all of your manufacturing to China and come in with a new price model and lower margins. In a lot of cases this will eventually lead to going out of business.
> an obsession with extracting profit
The only people who use phrases like this one are those who have never started and operated a non-trivial business. I don't know any successful business who's driving force is an obsession with "extracting profit". That term in particular, "extracting profit", is linked to Marxist indoctrination --which, in the US, is being delivered constantly by our universities by professors who have also never had to survive in the real world. In short, sorry, this is complete horseshit. Entrepreneurs and the companies they build are driven by wanting to delivery great products.
Profit is a necessity for growth and survival. I thought people were also going to learn this from the pandemic. Companies need cash to survive all kinds of issues that come up on a daily basis in the course of doing business. Once again, those who have never had to face these realities simply don't understand and refuse to listen, sometimes due to being in the grips of a truly astounding level of indoctrination.
I had an incident about 15 years ago when a multi-billion dollar company we were buying key sole-source components from discontinued these components virtually overnight and without prior notice. This cost us about a million dollars in real cash as well as about a year's worth of an engineering effort to design a product line based on these components. If we had not generated enough profit from our activities to survive such a hit everyone would have lost their jobs almost instantly. Instead, because we had the cash to weather the storm, we were able to regroup, invest and take a few months to redesign every single product around new components we could actually get.
Your views of business are as wrong as thinking that gravity pulls in the opposite direction. And yet I can't blame you for it, because it is obvious to anyone with business experience that you don't have the benefit of that experience. My suggestion would be to try to make something at a reasonable scale and learn from it. I and when you do, statements like "an obsession with extracting profit" will make your blood boil.
> inefficient work practices
Not so. In the US you have to be efficient or you won't survive. What we are competing with is obsessed with being efficient. The only companies in the US who can afford serious inefficiencies are those who do government/military work. This is where we waste more money than anyone can imagine getting work done for ten times the cost.
We have problems everywhere. This is what I am talking about when I say we need a major cultural shift. We have politicians constantly talking about raising taxes, as if we work for them. No! The conversation should be about ALWAYS lowering taxes and lowering costs. This means being more efficient at everything. Our national goal should be to half our expenditures and get more for our money. Not double our taxes and costs and support ever-growing bureaucracies. This isn't a formula for long term success. This is a formula for long term disasters.
I have sold product into various government agencies, from local transportation agencies to branches of the military. I left that world because it was simply disgusting to see just how much money we are burning for nothing at all.
I remember one case where we were bidding for a contract with a local public transportation agency for custom systems that needed to go into every passenger bus. We gave them a very reasonable bid. No special pricing, just normal "this is what it costs" pricing with normal profit margins. They ended-up giving the contract to someone who bid FIVE TIMES our bid. Why? Because the layers of people working at this agency are so ignorant that everything they do is designed to cover their collective asses. It isn't their money. They can't be fired. There are no consequences for them at all other than if something serious goes wrong. Even then, they probably won't lose their jobs. So they push the easy button (easy for them) and went with a contract that had all the "I will cover your ass 100%" elements they needed. So, we raise taxes and they spend five times more money than any reasonable buyer in the private sector would pay for exactly the same thing.
> I am also not willing to blame either the full price nor the whole exchange on 15$/h factory floor staff.
You are correct in that it isn't just one thing. At this point, it is thousands. Wages are a big deal though because they setup a chain reaction that ripples through the entire ecosystem. It isn't just a few people working for you that just cost more. As I explained above, this explodes through your entire wage scale. And, of course, it does the same for every single supplier and company you work for. The net effect is that the entire commercial/industrial ecosystem in the entire nation sees a step change in the cost of doing business. When they deal with each other, when the flour making company sells flour to the bakery, the cost will be higher and the baker, in turn, will have to charge more or make less, and so on. Making less is not sustainable. It leads to the destruction of businesses and industries.
What we have is a complex multivariate problem. At the most basic level we need a serious shift in culture and policies. We need to be more pro-business, pro-oil, pro-entrepreneurship than ever. The clean future with equality and a solid social net we all want cannot happen with oil at $100+ per barrel, an anti-business ideology and our schools teaching Marxism and Socialism rather than graduating rabid entrepreneurs full of solid skills right out of high school. None of what I am saying is ideological in nature. I want 300 million electric cars in the US. I've done the math. I've taken the time to analyze this and understand what it will take. The shit people like AOC is pushing for will not get us there. That's ideological fantasy land. In the real world, we need to do almost the opposite of what we are being fed day after day.
I challenge anyone to show me that we can actually achieve a clean energy future with oil at over $100 per barrel. No hand-wavy stuff. Math and physics. Numbers. They don't lie and they don't do ideology.
For example: What does it cost to build a solar power plant that will produce output equivalent to a 1 GW nuclear power plant? How much land will it consume? How much steel, concrete and other key materials? What will it cost to transport all of the materials and elements needed? How much fuel/oil will it require to manufacture all the pieces, transport them, and do the construction? How much will it cost to maintain and service this plant over a period of fifty years? How much waste will it generate? How will it affect the environment (for example, wildlife)? Etc. Real analysis, not "solar is pink unicorns and bubble gum". Once you look at these realities with honesty and start to pull back the layers, the inevitable conclusion is that we have allowed our politicians to destroy our nation from the inside-out. And for what purpose? All I can think of is that their optimization function is only focused on keeping their jobs and retiring with a solid pension and benefits. Their equation does not include consequences for any of their actions.
This is not a simple problem.
- hotpotamus 5y agoI would think that the higher oil goes, the more incentive there is for clean energy. Here's a guy who actually formed a company based on that premise. https://caseyhandmer.wordpress.com/2022/02/03/terraform-industries-whitepaper/ https://caseyhandmer.wordpress.com/2022/02/03/terraform-indu...
- robomartin 5y ago> I would think that the higher oil goes, the more incentive there is for clean energy. Sure? Yet that misses my point entirely. We all want clean energy. We all want electric cars. Even those who say they don't eventually will. How do we get there? We need to double our power generation capacity and seriously upgrade the grid, our ability to deliver power, in order to support this desirable future. Just for a sense of scale: That means building a full duplicate of our entire power generation and delivery system. It's like having to provide power for two nations, both the size of the US. That means we need to go from 1200 GW to about 2400 GW. To state the obvious: We cannot transition to electric transportation with the power we produce today. No way. It isn't enough. It's about half of what we need. How do we make it happen? Well, without getting into specific technologies we know one thing that cannot be disputed: The solution will require massive construction projects across every state, city and town in this nation for probably somewhere in the range of 25 years. This is an endeavor of an almost unimaginable scale from our current context. We lack the leadership, regulatory freedom, culture and maybe even resources to do it. The cost of construction at this scale is dominated by one variable: The cost of oil. Every piece of machinery used to grade, dig and reshape terrain runs on oil. Every truck, crane, hoist, van, pickup, big rig and car used in these projects runs on oil. The materials required are made with the use of oil and derivatives, from lubricants to fuels. Everything depends on oil. Even the very cables used to transport energy at scale depend on oil for their manufacture. If oil is expensive, we will will never be able to afford the cost of transforming our infrastructure to fully embrace "clean" energy. In quotes because it isn't really as clean as people imagine it as being. If you want solar power plants the size of states, you need cheap oil to build them or you are not going to get there. That's why I say we need $20/barrel oil if we want to realize a clean energy future. The two are very much connected at the hip. In the long term, at scale, you cannot have one without another. No utility grade solar farm has been built without using a massive number of barrels of oils, from manufacturing every single component in China and elsewhere to moving all the materials by cargo ship, train, big rigs and local delivery trucks...and then all the construction equipment you need to run after you receive the materials. So. Want a clean energy future? You need to lobby your representatives to push down the cost of oil as low as it will go. Or you will not get what you want. We don't have enough money to approach such a transition at a national scale. China, on the other hand, does and likely will. What is bound to happen is that China will leapfrog everyone in transitioning to nuclear and solar --all paid by us-- and the US and Europe will simply not be able to afford transitioning at the same rate, if ever. The cost of oil will continue to increase. With every increase our ability to afford it will deteriorate more and more. We can't approach massive projects with gasoline at $7 per gallon. I don't even want to imagine what happens if it goes much higher.