Tool price increases

[sweensdv]

CEO's routinely take steps to maximize short term returns, even at the expense of long term growth and profitability, in order to justify wild executive bonuses.

Yup, there are those types of CEO's out there no doubt but they usually don't last too long. Are those types greedy, sure, but no more greedy, by definition, than a worker who only gives 20 hours of work in a 40 hour pay period. Greed is everywhere I guess so one must be willing to acknowledge that fact but it certainly can't be applied universally to CEO's in general. That point of view would makes as much sense as me saying that all blue collar workers are lazy. Of course that's not true but then again there are some that are.

[Charlie]

Deleted by me.

[OpaDC]

Where is Milton Snavely Hershey when you need him. A boss who cared about his employees.

To stay on topic with OP, it's kind of a d---ed if you do, d---ed if you don't situation. Materials/manufacturing costs up, sales down, which way to go with prices? Difficult to say the least.

[cwsmith]

I'll have to agree with Charlie, after spending most of my working life in industry, I've done more than enough presentations for the CEO's to realize that life is pretty much about where they can maximize the profits in the short term, thus increasing their bonuses.

"Cost Reduction" and "Return on Investment (ROI)" are both key to running a business, but in the last several decades we've seen American management place their sights on immediate and very personal goals, which looks great on their resumes, but does little to perpetuate the business over the long term.

In my personal experience, I've seen management move orders up from the next fiscal year, to the end of this one. simply to make their "numbers" and their own year end bonus. So October and November are booming with lot's of shop overtime, but two weeks into December everything goes belly up and they're laying off the workforce, reducing the manpower count. The workers spend the holidays and usually the first two months of the year out of work and collecting unemployment from the state and the executives live fat and happy with thier new found wealth.

You can usually only reduce costs of materials and labor so much when it comes to engineering and manufacturing a product; then, you have to take steps like reducing heat, lights, upgrading tools and machinery, and finally, worker-related accouterments like replacing old and wornout benches, stools, and cutting benefits and removing older workers whose pay scale no longer fits the new business model. All good ways to reduce costs, and double or even triple the income of the top management.

Finally, when it is deemed that the American worker can't give anything more, the top management has that wonderful option of "off shoring". Where OSHA and the Labor Department can't reach. It even comes down to changing the main business address, as our CEO was once quoted in Forbes magazine as bragging about the $80 Million in taxes he saved by movinig the HQ offices to the Caymens.

Then we end up borrowing from overseas, $ Trillions, the dollar falls in value and our poor waged, poor benefitted workers end up paying higher prices. And yes, some materials here in the good ol' U.S. of A could be cheaper because they're domestic... but it's much more profitable to move the price up to the world competitive scale! That's why copper and lumber, and many other products prices raise so rapidly. It's not that we don't have it... it's that it's cheaper and more profitable to sell it overseas and if we here in our own country want it... well, we just have to belly up to the bar and pay the new kings of industry who have put us it this position!

CWS

[cgallery]

Yup, there are those types of CEO's out there no doubt but they usually don't last too long.

I think when the likes of Warren Buffet and Charlie Munger rail about executive compensation, they are talking about the norm, not the exception.

Are those types greedy, sure, but no more greedy, by definition, than a worker who only gives 20 hours of work in a 40 hour pay period.

I don't know how you can say that. If you're talking about degrees of greed, then certainly the guy taking $2m-$20m home while making disastrous decisions is certainly more greedy than a guy doing $25k work for $50k pay.

Greed is everywhere I guess so one must be willing to acknowledge that fact but it certainly can't be applied universally to CEO's in general. That point of view would makes as much sense as me saying that all blue collar workers are lazy. Of course that's not true but then again there are some that are.

Greed is not good, it is a vice. Greed is defined as the excessive or rapacious desire and pursuit of money, wealth, and power.

And this isn't a capitalism issue. Capitalism=good. Greed=bad. Greed isn't born of capitalism, you find it in all sorts of economic systems. Plenty of greed in the old Soviet Union, and in today's Russia and China.

[gjat]

For the wages that some ( probably a good percentage ) blue collars get, who could blame some for bein lazy ?

ABSOLUTELY!
I'm 'middle management', who has worked their way up. I'd like to take a ball-peen hammer to any employee with that attitude. You knew what the pay was when you took the job, just as I did. There are plenty of your co-workers that work hard and put in 100% effort for the same **** pay. We end up carrying your lazy attitude and making up for your slack without any extra pay. You see it as doing the least amount of effort for the maximum amount of immediate gratification. Others, take pride in doing a good job and giving full effort for their pay. We're usually the ones who are the last ones to get laid off, the first ones to get perks, the ones who get promotions, but get derided for being suck-ups. We also realize that it doesn't happen overnight, some employers don't or can't reward the extra effort, so you take the good work ethic elsewhere. It works out more often then a childish, selfish, and infantile attitude of societal losers. My life experience has been that it's having to carry the dead load of lazy co-workers that steals more out of my kids mouths than my boss making 'too much' money. I sure as **** blame you!

[vaking]

Everything has a price, CEO and "Blue Collar Worker" included. In the past 20 years the world has globalized. Countries like India or China have millions of blue collar workers available but not many CEOs. That means good CEO is in high demand - higher then blue collar worker. BTW - wages for blue collar workers may have decreased but only in US and developed countries. Wages in India, China, Malaysia and other developing countries increased alot.

Patriotism is an emotion, good CEO makes decisions based on logic and not emotions. Whether CEO is patriotic or not - it does not factor into his/her decisions. Besides - most big companies today are multinational. CEO has obligation to company shareholders wherever they are ahead of obligations to any particular country.

Companies often do strange things to increase short term performance but CEOs are not the ones to blame for it. We should blame incompetent shareholders instead. Too many people are buying stocks or other securities without real understanding what they are buying and why. They make their decisions based on the most recent quarterly report alone even though such report does not reflect company long-term plans, positions or investments. CEO is being rewarded for company stock going up in the short term, so he/she does exactly what shareholders want.

There was a time when people were playing the stock market with their own money. The ones who knew what they were doing -got rich, others went broke. When you invest your own money into some stock - you do a research and take into consideration many factors, including some intangibles. Today most companies have pension or 401K plans where many people are participating (people like many here). All these money usually end up in the stock market thru some funds. Fund manager invests money with a short term horizon. So if you want to blame somebody - blame all of us who invest our money in stock market indirectly rewarding short-term performance only for our money managers.

[Rand]

What about limiting executive salary and bonus compensation to a certain dollar amount - say $500,000 per year? Pay them the rest of their compensation in stock of the company that they have to hold for 5 years before they can sell it. That way they have an incentive to look out for the long term good of the company rather than worrying about the current quarter.

I had heard that before Ben and Jerry's ice cream sold out they had a rule that no employee could earn less than 10% of the highest paid employee. So, if Mr. Bigshot wants to make a million dollars a year he has to do well enough that the Janitor makes 100k. Seems fair to me.

[chopnhack]

Saved me from saying it.....probably more thoroughly than I would have anyways, kudos to you!

ABSOLUTELY!
I'm 'middle management', who has worked their way up. I'd like to take a ball-peen hammer to any employee with that attitude. You knew what the pay was when you took the job, just as I did. There are plenty of your co-workers that work hard and put in 100% effort for the same **** pay. We end up carrying your lazy attitude and making up for your slack without any extra pay. You see it as doing the least amount of effort for the maximum amount of immediate gratification. Others, take pride in doing a good job and giving full effort for their pay. We're usually the ones who are the last ones to get laid off, the first ones to get perks, the ones who get promotions, but get derided for being suck-ups. We also realize that it doesn't happen overnight, some employers don't or can't reward the extra effort, so you take the good work ethic elsewhere. It works out more often then a childish, selfish, and infantile attitude of societal losers. My life experience has been that it's having to carry the dead load of lazy co-workers that steals more out of my kids mouths than my boss making 'too much' money. I sure as **** blame you!

[paintandbodtman]

Interesting thread along with a lot of the threads on this and other forums I frequent. I have been self-employed 95% of my adult life and I cringe every time I read these sort of posts.
Everyone should be self-employed one time in their life.I have a saying about our obesity problem in this country goes something like this-if we would make most people drawing a paycheck from corperate america or the goverment be it state,local or federal and made them self-employed and they did'nt produce anymore for theirselves then they do for their employer then they and their families would starve to death obesity problem cured.I log on to forums and see people posting at all hours of the day when they should be working and I know that is the case when comments are made about the suitably of going to a certain web page during work hours.
Everyone wants to make as much as possible and spend as little as possible and wonder why we have the economic problems we have today.Some of you people need to get a life and lose you sense of entitilement that so many people today expect and take for granted.

[Charlie]

Deleted by me.

[Stytooner]

Guys, heated discussions are one thing. Personal pokes and jabs though are not needed nor wanted. Lets start being a little more tolerant.....of others and their opinions.....some more. Cooler heads are needed to continue this discussion.
Thanks in advance for thinking a post through before hitting the reply button.

[gjat]

Blame me for what ? I don't remember takeing the job. Nice signature by the way, I'm sure your kid loves you equally.

There's a phrase 'writing in context'. "you" is an identifier to specifically point to the vague "some" who you identified as being blameless for choosing to be lazy. It seems I either over-estimated a reader's comprehension level, or over-estimated my literary skills.

My sig is relative to another thread about a 28 year old blogger who lives at home and think it's cool to blog about his crazy dad pointing out his idiocy. Thankfully, I've been much more successful in raising my children.

[woodturner]

I had heard that before Ben and Jerry's ice cream sold out they had a rule that no employee could earn less than 10% of the highest paid employee. So, if Mr. Bigshot wants to make a million dollars a year he has to do well enough that the Janitor makes 100k. Seems fair to me.

Perhaps that is one reason why Ben and Jerry's is stuggling.


As a CEO, if my market value is $1M a year, and the janitor's market value is $18K a year, that is what they should be paid. If my employer doesn't want to pay me the $1M, I'll just go work somewhere else. That's one reason that companies that don't compensate their CEOs well often fail.

Think about this issue in another context - sports figures or actors. I recall reading a few years back that Bill Cosby's income was among the top 10 GNPs for the world. One guy making more than most countries? How can that be? Well, ultimately the market sets prices, and that is what the market decided he was worth. If everyone objected to high sports ticket prices and stopped buying them, prices and salaries would drop.

So the real solution to high executive salaries is the consumer's hands.

Blue collar worker wages are a different issue - much of our current economic issue is a result of workers paid too much, so that companies cannot compete in the global marketplace. Everyone want's to make more money, but the part many people miss is that if a worker is paid more than the market value of his or her work, the company cannot compete and will not survive.

When you consider that many jobs require a college degree to earn $9/hour, it's not unreasonabl to expect lower skill jobs to pay less. The problem is that our expectations in the US are out of hand - everyone thinks they are entitled to own a big house when they start working, drive a fancy car, etc.

[cgallery]

Perhaps that is one reason why Ben and Jerry's is stuggling.

They sold out to Unilever for something like $300M, and had "insignificant liabilities" at the time of the sale, which means they pocketed most of that $300M. Not exactly struggling.

As a CEO, if my market value is $1M a year, and the janitor's market value is $18K a year, that is what they should be paid. If my employer doesn't want to pay me the $1M, I'll just go work somewhere else. That's one reason that companies that don't compensate their CEOs well often fail.

I really have no problem with paying some guy $1M a year. That works out to $480/hour, which is certainly less than many attorneys, especially at larger firms where partners typically bill out at $600/hour and more.

Think about this issue in another context - sports figures or actors. I recall reading a few years back that Bill Cosby's income was among the top 10 GNPs for the world. One guy making more than most countries? How can that be? Well, ultimately the market sets prices, and that is what the market decided he was worth. If everyone objected to high sports ticket prices and stopped buying them, prices and salaries would drop.

Agreed.

So the real solution to high executive salaries is the consumer's hands.

Blue collar worker wages are a different issue - much of our current economic issue is a result of workers paid too much, so that companies cannot compete in the global marketplace.

Workers paid to much in relation to what?

The system worked until we started dollar cost averaging in labor from countries where the weekly pay scale is $40. Where workers live in company supplied housing, where there are no workplace safety controls and no environmental controls. Where workers are essentially slaves and have no right to pursue life, liberty, or happiness.

Everyone want's to make more money, but the part many people miss is that if a worker is paid more than the market value of his or her work, the company cannot compete and will not survive.

Agreed.

When you consider that many jobs require a college degree to earn $9/hour, it's not unreasonabl to expect lower skill jobs to pay less.

I don't know any $9/hour jobs which require a four-year degree.

The problem is that our expectations in the US are out of hand - everyone thinks they are entitled to own a big house when they start working, drive a fancy car, etc.

Agreed. But there are still a lot of people just want to own any house, and drive any safe, reliable car.

I think the problem with this country is that, somewhere along the line, we stopped giving a **** about our fellow man.

We started equating the success of a man with his value to society. Men with ivy league educations and fancy homes and cars are now somehow better than men with state university degrees or (gasp!) high school diplomas. A man with a $60k/year job, a rundown car, and a house on which he is late a payment or two is now a liability, because he can be replaced buy a guy that makes $40/week and is happy living in a thatch hut.