4 ms·

A solid argument for vertical integration if ever there was one

by rusk 5y ago

simne 5y ago
Only for people, who have not seen dying giants of Soviet industry, which where like large ships - when sink, pull to bottom everybody and everything near them. Other known problem - "too large to fall" - government try to save such large enterprises so hard, that lead to default.
- Gollapalli 5y ago
  Same thing happened to the auto manufacturers in Detroit. Used to be one of the richest cities in the world, now one of the poorest and most violent in America.
  - simne 5y ago
    No. Detroit is the case of overestimate their success, and they just got too much debts. Usually investors are much more cautious, but in Detroit, used standard scheme of distributed responsibility, where not exists one person, who responsible for bad decision, but these decisions made by committee or by some collegial scheme. This is also known as one of the biggest problem of democracy - some subject could manipulate others. In craziest form, one subject could ask other parties with vote power, to jail any other party, and than divide its property between others (who stay free), and repeat this until all others will be in jail, and all property will belong to this creative subject. In real life, very typical thing, to make mega-projects (which where really created in Detroit), to plunder taxes. BTW this is easy to see, by looking on projects distribution. For example, normal community build lot of cheap projects, but little number of mega projects, and community which is not well enough mature, will attract to mega projects, because they fear to got response of making little things.
    - Gollapalli 5y ago
      You're not wrong on the problems of distributed responsibility. But Detroit was destroyed by the looting of the American auto industry, which was offshored, outsourced, and automated in the pursuit of efficiencies by people who were well-suited, well-heeled, and not far-sighted. The automakers had been in decline by the 70's, but the manufacturing of automobiles in Detroit sustained that city, and when you remove the chief industry of a city, the results are predictable: the city declines.
      - simne 5y ago
        Look, in business good CEO estimated as 80% of business value, or if say scientifically, value is depend much more on leadership and on quality of control, than on capital cost. Detroit before raise of automobile industry was little periphery town, very depressive place like all periphery, so no leadership, no control (in this case, sure mean local government), simply because there where empty place, nothing to control. In very short time appear automobile industry, which attract capital, but it is unfortunately typical, that business does not care about control, even more - in many cases business struggle against local government. So that's all history - money tsunami appear, and flooded city; local government was not appear, it can't appear so fast, without special measures (I studying community dynamics and local governments for more than 10 years, and I have not found any facts about special programs to raise level of Detroit local government; unfortunately I seen extremely anti-local government measures); this money flood disappear, left debts. And unfortunately that's typical history, poor cannot become reach just getting money, he should learn, change his mind.
  - michaelbrave 5y ago
    Most people who talk about the fall of detroit ofter refer to as "bean counters vs car guys" (metrics and commity vs passionate people)and once the company was entirely "bean counters" and all the "car guys" were pushed out it quickly fell.
- rusk 5y ago
  You mean like Boeing
  - simne 5y ago
    Definitely, NO! Boeing exists on concurrent market. And its large size not because it could just have some moderate benefits from size, but because it is impossible to build so large objects within small business. Just imagine, 747 estimated to 500-700 man-years, nobody will wait even 1/10 of so long. C64 totally different case.
    - rusk 5y ago
      You and I must have different thoughts about how well Boeing is doing in that space vs let’s say, airbus.
      - simne 5y ago
        I just compare with different base - really seriously ill Russian enterprises - VAZ, KAMAZ. And in Russia things are so bad, that few years ago there literally stole jail. - One entity won tender, than few months imitate works and sure, received money, and finally declare themselves bankrupts.
        rusk 5y ago
        LOL Russia
        simne 5y ago
        It is really luck for you, if you could see bad habits of other people and use this info to make yourself better. Not too much people have such opportunity.
Hatrix 5y ago
In this case it resulted in a toxic site contaminating the ground water: https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0301146 https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0...
- rusk 5y ago
  Do you think that’s because of vertical integration? I’d have thought you’d run this kind of risk with any sort of industrial facility. It seems they had discontinued this by the time this story commences.

A solid argument for vertical integration if ever there was one

by rusk 5y ago

A solid argument for vertical integration if ever there was one

Only for people, who have not seen dying giants of Soviet industry, which where like large ships - when sink, pull to bottom everybody and everything near them. Other known problem - "too large to fall" - government try to save such large enterprises so hard, that lead to default.

Gollapalli 5y ago
Same thing happened to the auto manufacturers in Detroit. Used to be one of the richest cities in the world, now one of the poorest and most violent in America.
- simne 5y ago
  No. Detroit is the case of overestimate their success, and they just got too much debts. Usually investors are much more cautious, but in Detroit, used standard scheme of distributed responsibility, where not exists one person, who responsible for bad decision, but these decisions made by committee or by some collegial scheme. This is also known as one of the biggest problem of democracy - some subject could manipulate others. In craziest form, one subject could ask other parties with vote power, to jail any other party, and than divide its property between others (who stay free), and repeat this until all others will be in jail, and all property will belong to this creative subject. In real life, very typical thing, to make mega-projects (which where really created in Detroit), to plunder taxes. BTW this is easy to see, by looking on projects distribution. For example, normal community build lot of cheap projects, but little number of mega projects, and community which is not well enough mature, will attract to mega projects, because they fear to got response of making little things.
  - Gollapalli 5y ago
    You're not wrong on the problems of distributed responsibility. But Detroit was destroyed by the looting of the American auto industry, which was offshored, outsourced, and automated in the pursuit of efficiencies by people who were well-suited, well-heeled, and not far-sighted. The automakers had been in decline by the 70's, but the manufacturing of automobiles in Detroit sustained that city, and when you remove the chief industry of a city, the results are predictable: the city declines.
    - simne 5y ago
      Look, in business good CEO estimated as 80% of business value, or if say scientifically, value is depend much more on leadership and on quality of control, than on capital cost. Detroit before raise of automobile industry was little periphery town, very depressive place like all periphery, so no leadership, no control (in this case, sure mean local government), simply because there where empty place, nothing to control. In very short time appear automobile industry, which attract capital, but it is unfortunately typical, that business does not care about control, even more - in many cases business struggle against local government. So that's all history - money tsunami appear, and flooded city; local government was not appear, it can't appear so fast, without special measures (I studying community dynamics and local governments for more than 10 years, and I have not found any facts about special programs to raise level of Detroit local government; unfortunately I seen extremely anti-local government measures); this money flood disappear, left debts. And unfortunately that's typical history, poor cannot become reach just getting money, he should learn, change his mind.
- michaelbrave 5y ago
  Most people who talk about the fall of detroit ofter refer to as "bean counters vs car guys" (metrics and commity vs passionate people)and once the company was entirely "bean counters" and all the "car guys" were pushed out it quickly fell.
rusk 5y ago
You mean like Boeing
- simne 5y ago
  Definitely, NO! Boeing exists on concurrent market. And its large size not because it could just have some moderate benefits from size, but because it is impossible to build so large objects within small business. Just imagine, 747 estimated to 500-700 man-years, nobody will wait even 1/10 of so long. C64 totally different case.
  - rusk 5y ago
    You and I must have different thoughts about how well Boeing is doing in that space vs let’s say, airbus.
    - simne 5y ago
      I just compare with different base - really seriously ill Russian enterprises - VAZ, KAMAZ. And in Russia things are so bad, that few years ago there literally stole jail. - One entity won tender, than few months imitate works and sure, received money, and finally declare themselves bankrupts.
      - rusk 5y ago
        LOL Russia
        simne 5y ago
        It is really luck for you, if you could see bad habits of other people and use this info to make yourself better. Not too much people have such opportunity.

Hatrix 5y ago

In this case it resulted in a toxic site contaminating the ground water: https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0301146 https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=0...

rusk 5y ago
Do you think that’s because of vertical integration? I’d have thought you’d run this kind of risk with any sort of industrial facility. It seems they had discontinued this by the time this story commences.