4 ms·
Since the article didn't answer their own question, I'll offer up my own guesses based on what the article said. Keep in mind that I have very little respect f
by JonFish85 13y ago
Since the article didn't answer their own question, I'll offer up my own guesses based on what the article said. Keep in mind that I have very little respect for hedge fund managers, so that may taint my opinion.
Two sentences stick out:
"There's a devoted factory workforce where you still count as a "new guy" after 16 years."
and
"[at Steinway] the person who does that has been trained for ten years."
If I'm a person looking just at squeezing every last drop of money out of a company, long-term consequences be damned, this is the very first thing to ditch. If you're still a new guy after 16 years, you're an expensive new guy. Let's hire someone who costs, say, 50% and does the work 60% as good as the older worker. Cut costs, and hope that you can keep revenues high for awhile and bring costs down. Then shortly you have a multi-billion dollar company that you paid $500M for. Then, like any "good" hedge fund guy, sell and ditch it before you have to deal with any long-term consequences.
- keithpeter 13y agoSteinway's business depends on the mystique and skillset. These are not joannas they are selling, and it is a very analogue product. 60% as good as they are now would be worse than a Chinese mass produced baby grand voiced by your local tuner. Not the target market, a few scales in the showroom and you have lost them. I accept that (say) a chocolate manufacturer or people who make network cards, or even hifi components, your strategy might work.
- mynameishere 13y agoErr, that's his point. You cheapen the product and then sell when profits are up before the reputation goes down.
- keithpeter 13y agoAnd the point I was trying to make is that the time delay between quality drop and reduced profits will be very short.
- GFischer 13y agoHonest question: wouldn't the workforce or unions revolt if new management did this? (especially if they guessed at the underlying plan)