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Consequences of Overpaying One Input Factor
Posted by Jim (more from Jim) on Sat, 30 May 2009 15:15:28
In Reply to: do what? (i do not intend this as a flame), repoSAAB, Sat, 30 May 2009 14:42:12
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1. Cost in material had to be cut because labor cost and legacy cost took up too high a per centage of overall cost. Businesses have to look for places to cut cost all the time just like we consumers comparison-shop (i.e. cutting cost). When labor cost, not just hourly wage but also hourly productivity (i.e. the labor union was against raising productivity standards, from automation in the 70's and 80's to requring workers to do more in the same hour in the 90's and 00's), was locked in by law, cost cutting had to be found in material, design and engineering.
2. Motivated young workers left because they were shafted by the union seniority system. Hard working productive workers get the black eyes from their union "brothers" because the union didn't understand high wage has to come from high productivity.
3. Motivated designers and engineers also left because due to point (1) above, it's always their departments that got cuts.
Executive pay is really a fig leaf. $1million for an executive spread out to 500,000 workers is only $2 per person in a year. What diffrence would that make? Getting union members to pay the $25 co-pay or shave the wage by 50 cents per hour would save far more money than firing all executives
posted by 76.118.39...
Posts in this Thread:
- GM bankruptcy = "depression"?, rob 94 aero, Fri, 29 May 2009 17:23:22
- GM no longer employes enough people to have this effect, MI-Roger , Sat, 30 May 2009 13:33:39
- The unions bankrupted GM..., Mike Lynch , Sat, 30 May 2009 13:30:09
- hmm it really wasn't just the Unions, ryan , Sun, 31 May 2009 15:19:24
- The unions bankrupted GM... with management help, Noel, Sun, 31 May 2009 06:36:26
- Yep, Jim, Mon, 1 Jun 2009 11:30:03
- Re: The unions bankrupt many places they dominate., BobS, Sat, 30 May 2009 23:01:20
- Re: The unions bankrupted GM..., KevinM, Sat, 30 May 2009 19:03:38
- Re: The unions bankrupted GM..., mikef, Sat, 30 May 2009 18:02:42
- do what? (i do not intend this as a flame), repoSAAB, Sat, 30 May 2009 14:42:12
- It wasn't the workers or the unions who've made, No Snaab, Sat, 30 May 2009 14:12:13
- Graph of Unemployment by County - USDA Stats, andym, Sat, 30 May 2009 04:11:08
- You ought to live in Michigan, TG, Sat, 30 May 2009 03:35:03
- Actually, "throwing in the towel", is, for all intents, Lawrence, Fri, 29 May 2009 18:53:11
- Huh?, PGAero , Sat, 30 May 2009 12:36:45
- Re: GM bankruptcy = "depression"?, Simon S, Fri, 29 May 2009 18:04:19
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