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They're referring to the Dodge v. Ford Motor Co. lawsuit https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.m.wikipedia.org/wiki/Dodge_v._Ford_M
by RakutenSatori 3y ago
They're referring to the Dodge v. Ford Motor Co. lawsuit
https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
Basically Ford wanted to cut shareholders dividends to dramatically increase production and the number of people employed in his plants while at the same time cutting the costs and prices of his cars.
He told his shareholders that the goal was the long term benefit of the company and the value of this strategy to them was not a consideration for the plan.
Shareholders didn't like it and the Dodge brothers, who were among the largest ones, indeed sued him.
The court held that Ford could not lower consumer prices and rise employee salaries.
It also upheld the order requiring that directors declare an extra dividend of $19.3 million.
Many people point out at this lawsuit when questions arise as to why corporations squeeze as much value as they can for the shareholders at the expenses of basically everything else.
- FrustratedMonky 3y agoSo Dodge Brothers themselves were shareholders. So this is more about shareholder rights? They can vote for board members, and then those board members can direct strategy. It seems like a corporation can do all these things that Ford was planning, it just has to factor in shareholders. So if shareholders wanted to paint all the plants purple, they have some rights to force that. Is this correct: It doesn't have to be about profits, it is just about control?