4 ms·

Kind of but it was moreso that he wanted to invest in expansion and R&D while driving prices down for consumers See: Dodge vs Ford

vlovich123 1y ago
Fascinating read especially when viewed from the strategic angling to make Ford less profitable and cut off the minority shareholders the Dodge brothers from the dividend revenue stream they were using to build a rival company. So ironically, while the court held that the board had to prioritize shareholder profits, he would have realized greater shareholder profits by stifling the competition in its crib.
- burnerthrow008 1y ago
  > while the court held that the board had to prioritize shareholder profits It's a bit more nuanced than that. The court held that company directors have to be acting for the benefit of shareholders. They still have wide latitude about how to do that. The reason Ford lost is because his legal position was essentially "I am king, therefore I can do whatever I want". But you can't do whatever you want. You can't lock the workers in the factory and burn it down with them inside, for example. You need to have some kind of colorable argument that what you are doing is somehow in the interest of shareholders (either long or short term). The problem for Ford was that he couldn't articulate any reason for how his actions were beneficial to shareholders (probably because the real reason, killing the Dodge Brothers Company, would have been illegal under the antitrust laws of the time).
  - vlovich123 1y ago
    “Paying people more money makes them more efficient, motivated, and productive which benefits the company more than it costs. The expansion investment is to grow even faster to bring even more profits over the long term”. Done. I doubt Henry Ford had trouble coming up with a fig leaf explanation if that’s all that was truly needed.
    - immibis 1y ago
      A parent comment hypothesizes that Ford, being a ruthless capitalist, literally couldn't think of that.

vlovich123 1y ago

Fascinating read especially when viewed from the strategic angling to make Ford less profitable and cut off the minority shareholders the Dodge brothers from the dividend revenue stream they were using to build a rival company. So ironically, while the court held that the board had to prioritize shareholder profits, he would have realized greater shareholder profits by stifling the competition in its crib.

burnerthrow008 1y ago
> while the court held that the board had to prioritize shareholder profits It's a bit more nuanced than that. The court held that company directors have to be acting for the benefit of shareholders. They still have wide latitude about how to do that. The reason Ford lost is because his legal position was essentially "I am king, therefore I can do whatever I want". But you can't do whatever you want. You can't lock the workers in the factory and burn it down with them inside, for example. You need to have some kind of colorable argument that what you are doing is somehow in the interest of shareholders (either long or short term). The problem for Ford was that he couldn't articulate any reason for how his actions were beneficial to shareholders (probably because the real reason, killing the Dodge Brothers Company, would have been illegal under the antitrust laws of the time).
- vlovich123 1y ago
  “Paying people more money makes them more efficient, motivated, and productive which benefits the company more than it costs. The expansion investment is to grow even faster to bring even more profits over the long term”. Done. I doubt Henry Ford had trouble coming up with a fig leaf explanation if that’s all that was truly needed.
  - immibis 1y ago
    A parent comment hypothesizes that Ford, being a ruthless capitalist, literally couldn't think of that.