I would recommend anyone read the book American Icon, which is about Ford's rise from the ashes in the 2000s. It's one of those thick reads, but well worth it.
It's sad to see them struggling, because their car lineup has been absolutely brilliant for the last few years. But now that the industry is at it's plateau, investors are very paranoid about any car company trying to invest in new areas (Ford spent much of it's earnings on tech companies). They would rather just see dividends instead.
I disagree. I bought an Explorer and had multiple issues with the vehicle but the real issue was the horrible software. At one point they mailed me a 32GB USB key and I had to upgrade it in my driveway while leaving it running for an hour. You should have seen the poor older people in the dealership who didn't want to have to flash their cars. Ford is a below average car company and an utter shit software one.
I think it's funny how we never act so selflessly in our entire lifes, but expect investors, which are people that made their career goal to be good at making more money, to suddenly grow this moral guideline and be worse at their job just for the greater good.
1) That choosing investment over dividends must be a selfless act that makes one worse at their job (rather than simply a different option, possibly even more lucrative).
2) That "we" (who?) don't make life choices for selfless reasons, when it's plainly obvious that many do.
3) The idea that investors don't have a moral guideline AND that that's somehow acceptable.
I should have been more clear, but I think people here are reading too much from I said. It's useless to try to repair it, but I just want to explain what I intended to say.
First, I wasn't implying investors are bad people. In fact, I tried to imply the opposite.
What I meant was that a lot of people (at least people I know) blame companies for making decisions that cut jobs, and investors for pushing in these directions.
But at the same time, nobody is so selfless in their own life decisions in order to sacrifice their careers for someone they don't know. In fact, most people will consciously decide to earn more and make their lives better even if that means other people will lose their jobs. For example, I doubt any software developer will ever change careers just because the software he works on will cause half of the sales team to be fired. That's what I mean by people not being so selfless in their own life decisions.
But when it comes to losing their own jobs, it's common to hear people say that companies or investors could decide take the loss, earn less and keep these jobs, like the decision was a choice between saving lives or killing puppies for 10 cents more, and someone is just too greedy.
So, by "expecting investors to grow this moral guideline", I didn't mean they don't have a moral guideline. I meant people expect a much higher moral guideline that would make them sacrifice themselves in favor of the greater good, while other people don't actually do it themselves.
>That choosing investment over dividends must be a selfless act that makes one worse at their job (rather than simply a different option, possibly even more lucrative).
This implies that they can't do both investing and paying dividends at the same time. What leads you to believe investment by F isn't sufficient?
> I think it's funny how we never act so selflessly in our entire lifes
That is some serious projection there. Most people spend most of their lives not acting selfishly. If corporations acted with the kindness that individual people have for each other then the world would be much different.
Most people don't go out of their way to act selfishly on purpose. But they still primarily care about their own and ignore their impact on those who they don't know.
Same answer, speak for yourself and the people you see in your daily life, because this does not match my experience. Where I live, if you find a scarf on the ground, you put it in a clean, well visible spot nearby, so the person who lost it can easily see it if they come by again. I also see people who are going through a heavy door sometimes turn a bit to see if there's someone behind them, lest they get their face smashed by said door.
I won't say that's not selfish though; some people would trade 3 seconds of their time here and there gladly for treating others like they would like to be treated. It's swapping time and/or money for less tangible but very valuable "things".
But incidentally, this whole "selfish" stuff is kind of a red herring anyway; OP was talking about investors being short-sighted and "paranoid", not investors being selfish. You may say that's the same thing, but I'd disagree, I'd say people "keeping their more to receive their less" isn't people being selfish, it's more like getting stuck in a local optimum. Locally, that's great, globally, that's having lost.
People constantly act outside of their best interests. Holding a door open for a few seconds longer for someone you don't know is not a selfish habit.
So yea, people do some things in their own best interest, but the norms are hardly 100% in either direction. Yet, somehow companies are expected to be ruthlessly selfish in all areas.
Corporations pretty much state openly that their only goal is their own self-interest and nothing else. They act like psychopaths. For most people such behavior is not socially acceptable.
> Corporations pretty much state openly that their only goal is their own self-interest and nothing else. They act like psychopaths.
Psychopaths are pretty often not acting in their own self-interest - they're screwing themselves in long-term to get short-term gains. A person who acts in their own self-interest is usually an upstanding member of society with perfect reputation. It's very rare for an actual, diagnosable psychopath to pull off something like that.
Let's clarify: "perceived self interest". You can only act on what you think at the time is right. You may be right or wrong, only the future shows. That's true for everyone, corporations, psychopaths and anybody else
This is a strange comment. I think many of us do a lot in the best interest of customers, whether or not it's the most profitable option. There's always a financial element involved, but I don't think it's a matter of "selflessness" to decide to put your customers and employees first and figure out how to make everything else work around that.
I like their trucks, and their high-end vechicles. I consider the Mustang high end.
It's their entry line that's lacking. I'm looking for a new car, and would love to buy a Ford.
Actually it's for an aging relative, and don't see much. I don't even want to walk up to that Focus, and I can't get her near it. Now she will listen to me on the impracticality of buying a Cooper Mini, and she will listen to me on what vechicles look nice, but are just too exotic for our future repair budget--basically me with with parts a account. But she won't look at a Ford, except the F150, which she can't even get into.
If anyone from Ford is listening. Buck the trend. Build a vechicle, that a customer can put 400,000 on. Build it like a 80' Toyota. Meaning just use common sence. Replaceable Ball joints, maybe at the most two computers. Nothing exotic. Just a people mover, with a splash of style? No dashboards that look like a sensor waiting to fail. Mechanic friendly. I had a Slick Rick car Salesman tell me no one works on their own vechicles anymore, and they all finance. He was naieve, or just trying to hussle? I know he knew nothing about about how a vechicle is put together, and shouldn't. Just a Salesman. Just a dude who checks his oil at every fill up--still can't figure out why. Maybe it can't be done with government regulations? I don't know.
Go ahead and put in six beverage holders, just make the thing last.
Make the thing last? Toyotas, and Hondas spend years honing that reputation, and are raking it in now. Do the same thing? You hit it out of the park on so many newer vechicles, now go back to the company roots. A vechicle your employees can afford, and want to buy?
(If there's any mechanics here, I would love your recommendations on some 2012 to 2016 vechicles that are good buys, and practical.)
If you're looking for something in the Focus/Cooper range.
I highly recommend the Honda Fit. I second hand one with 10-30K on it can be had for four figures. And it will go for 200K without major service, 300K if you live outside the rustbelt.
I recently switched to electric. I could not be more happy with the Nissan Leaf (mostly that the first service item in the manual is to change the Fob battery at 30K)
A Yaris just runs. I can't have a "social media dashboard android controlled air conditioner" failure because that stuff is all mechanical, the way I like it.
Their new cars are not that great. With the exception of pickups and mustangs, the last vestange of FR engineering, they are mostly adaquate. Even the new RS models were rushed, with cheap torque vectoring that eats your brakes and is a pain to service. Top it off with the industrys worst salespeople and this slump is no suprise.
If the goverment wants jobs then why don't they just do so?
They have the mandate to create new regulation. They could for example say that pumping gas at the station is a job that requires training and only qualified personnel can do this job.
That would instantly create new jobs and the businesses would be forced to accommodate.
Hiring someone is a last recourse for any business since it's very expensive so you can't expect businesses to magically create jobs.
As someone from a country where this happens (in Brazil it's mandatory to have employees to handle fuel pumps in order to protect jobs), I think it's crazy to even think this is a good idea. We have very expensive fuel and I'm required to wait in line because I need to wait for an employee to be there to do something I can do faster. As result, we have terrible service with an expensive price.
Jobs must exist by market demand, artificially creating jobs is the worst thing a country can do. Every law had good intentions, it's always the indirect side effects that cause problems.
Here in Brazil I know from published statistcs that atendees make up about 25% of the running costs of a fuel station. Mostly due to taxes over the payroll.
But fuel stations have vary narrow profit margins. If you spend 40$ filling up they are often taking less than 1$ in operating costs. Gas stations are really cheap to operate it's the actual gas and CC processing fees that are expensive.
I don't pretend to have the full numbers, but I guess things are more complicated here in Brazil than in the US.
A common fuel station here usually have 8 pumps, and usually 4 employees to operate at a time. Due to laws on working hours, etc, there may be 2 or 3 shifts. Without going into peak hours and different # of people per shifts, a standard station may easily have 10-15 employees. Then multiply what you pay to each employee by 2 due to taxes, etc.
Not saying it's the highest of the expenses, but employees in Brazil adds up to the operation costs. It's one of the main complaints in business here.
Ballpark 1,000 people filling up per day at 40$ each. 40,000 / 24 hours = 1,666$ per hour 4 people are not even in the ballpark of 1,666$ per hour and even that's high as you don't need 4 people 24/7.
Again, it's not free, but operating pumps is far from the expensive bit.
If someone is was paid a 'ludicrous' 20$ an hour, and averages helping an average of say 20 people per hour that's adding less than 10 cents a gallon to the price of gas. Which is not zero, but hardly causing 'high' gas prices, and reality is it's going to be significantly less than that.
Yet the market demands 24x7 operation and there will be many hours of perhaps 2 people per hour. On average it just doesn't work. And medical insurance alone costs $15/hr. Total lifetime cost of paying someone to work a shift is probably that $20 its just that the paycheck only includes 7.25 worth of it, the guys medical care doesn't disappear because he's poor we just pay higher taxes and higher rates, ditto food he doesn't stop eating because he's poor we just pay more money for EBT. So the cost to the complete system, to the civilization, to everyone in that civilization counting all the costs, is at least $20/hr, that's not ludicrous at all.
15$/hr for medical insurance * 40 hour weeks * ~4 weeks a month = 2,400$/month. 1/4 of that buys great coverage for one person which is ~3.75$/hr + 7.25$/h = 11$/hour.
Second one person can operate more than one pump. In a peak hour you can probably hit 50+. Also, one person from 10pm - 6am then 2 people from 6-2pm and 2 people from 2pm to 10pm means that 2 people per hour occurs when you have fewer people. Further, they will be doing stuff like cleaning during that down time meaning it effectively costs less than 1 person at night.
Also, many gas stations don't operate 24 / 7. You may have one on each side of the street during the day and then one shuts down at night.
PS: Small Gas stations average 500-1,000 people per day. / 24 hours that's 20-40/h on average.
They would be better off paying people to dig ditches and refill them. Making idiotic middle-man positions like gas pumpers just slows down innovation in industries and pisses off people who don't like to be restricted from performing their own trivial tasks.
Putting more money into infrastructure both fixes the ailing infrastructure, of which there is a lot, and creates new jobs. I feel like this is a no brainer so perhaps I am missing something. I would gladly be enlightened if anyone has more insight!
You're missing the fact that one political party believes that government spending is inherently wrong and that any government debt is unacceptable (until they are in power).
There were endless political debates over this after the Great Recession when money and bonds were cheap and unemployment was high. Significant investments are needed in infrastructure (I think that was even a Trump campaign promise?) across the US but the issue has become unnecessarily politicized.
Oregon does this I believe, them or Washington. While on vacation I was always irate at the pump because I had to wait for someone that started the pump then ran off, so if it stopped prematurely and early we had to wait for that person to run back.
The canonical example of a state that does this is New Jersey. I don't live there, but I've driven through it on occasion, and it's always jarring to suddenly not be allowed to do so something so basic (and that you've done thousands of times) as inserting a gas nozzle into a fueling port and depress the trigger.
NJ does this--though the prices at the pump are still lower than in a number of nearby states. I think there have been occasional attempts to change the law so that people can pump their own gas, but it has always failed.
Innovation at petrol pumps stopped about 50 years ago - paying at the pump briefly looked like a brave new frontier but it's actually quicker to go in and pay.
I'm in New Zealand in case that matters. The interface is horrendous - and it has numerous checks it requires before you are allowed to pay and each step takes a long time to accept, and it hates "fill" as an option (rather than say $50) - Do you have any discount receipts (from supermarkets)? Have you an AA card? Do you authorise payment up to X? Are you sure? Hold being placed... Waiting to process....
If you pick up the pump at any stage before it's ready it all breaks.
It's rare here too (Bay area), but one day my wife forgot her wallet at home, and had to find a station that took Apple Pay in order to fill up to get home again. She found one and is now an Apple Pay convert.
The concept behind sin taxes was to tax what you don't like more than what you do like. Modern governments apparently hate jobs and earned income the most.
How would you rather the govt tax? Seems to be a lot more efficient to tax income rather than to have separate taxes on different kinds of consumption and investment.
As it stands, income gets higher tax than capital gains. Capital gains are taxed at half the income tax rate. So people who make most of their money on capital gains are 1) very wealthy 2) paying less tax than poorer people who rely on working for a living 3) incentivized to keep their money in investment vehicles and out of circulation.
I'd suggest reversing it and taxing capital gains at the full rate and income tax at half. This is how it's done in Switzerland I believe, if you want a case study. They seem like they're doing okay.
Cap gains are taxed lower because it's already taxed money being invested. In addition, it's a reward for risking your money by investing it into the economy (no, this money is not "out of circulation")
I've never understood the 'already taxed' argument. Money circulates; governments decide that certain transactions are taxable. The money left over in a given transaction after the tax is paid doesn't magically become exempt from taxation in future transactions, morally, legally or factually. Arguments against inheritance or capital gains taxes on the basis that they tax money that has already been taxed just privilege the idea that taxing earned income is axiomatically legitimate - the one transaction that it's okay to tax. But why is that special? Why not pick sale of goods as the legitimate taxable transaction, then paying tax on wages is paying taxes on money that has already been taxed.
Paying someone for their labor is a taxable transaction. Selling an asset at an appreciated value is a taxable transaction. Transferring wealth to descendants after death is a taxable transaction. 'Already taxed' money is not a thing.
It just that there's a surplus of capital right now - you can tell by the way bond and savings interest rates are close to zero. The reward for risking your money isn't needed right now. People can't find enough places to leave their money.
Your country is not the only one on the globe. You can only tax so much before the thing being taxed starts to move elsewhere. Capital is more mobile than labor.
Capital is often less mobile than labor, homes and salt mines generally don't move. Also there is no reason not to tax foreign investors as shockingly they don't vote and capital is not in short supply.
We're already paying the cost on monitoring, regulating, and taxing different kinds of consumption and investment. Might as well just make those taxes higher as appropriate and decrease/eliminate income taxes.
I'm OK with that. If the problem is that life is expensive, solve the problem directly with a minimum income or more generous earned income tax credit.
The problem with socialism is that sooner or later, you run out of money to steal.
The end result of your logic is basic income. Which is, no matter how useless you are, you still get food and shelter. Food and shelter is not a human right.
There are enough possibilities to create jobs which actually make sense. Like increasing the mineral oil tax and improve the run down infrastructure with the additional tax revenue.
> A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by Oct. 1
Why do companies offer early retirement incentives? Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money.
Ford in particular would probably get some negative PR. And since the most expensive employees are older, they might try to sue you for age discrimination. Is it just risk mitigation, or does Ford actually benefit from the incentive? 10% might be too large of a change to do all at once, especially at Ford's size; so buying them off lets them get rid of people gradually without surprising people.
I can understand why executives have to be bought off: They usually negotiate an accelerated stock vesting if they get fired without cause. What about anyone below that?
Why do companies offer early retirement incentives?
Because it is easier to reduce your workforce when folks choose to leave rather than if they go unwillingly. If you get enough reduction from this method, folks aren't as worried about their jobs. And i'm guessing in the long term, there are fewer disgruntled ex-employees.
Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits? Especially since the stated purpose of it is to save money.
Possibly upfront, but not in the long run. The nearly retired folks are more likely to earn more money and will likely be retiring at some point anyway so a fair amount of the costs will be happening nevertheless. From what I've seen, usually there is a decent one-time bonus and possibly earlier earning on retirement. With regular firing, unions generally require the lowest seniority folks go first. Over time, this is actually more expensive with day to day operations because these folks tend to earn the least. Plus all the hits to the employee morale.
Simple answer: Unions. They can't just layoff people without repercussions.
Complex answer: Businesses that have been around this long have learned to survive by not making enemies. A tenant of this brand of capitalism is that it is cheaper to make mutually beneficial deals than to 'win'.
Also, because the brand is so tied up in American identify, and many of their workers are their own consumers, they don't want to muddy the waters, especially if they expect to hire back some of the same workers again later.
>Wouldn't it be cheaper to wait until the day(or week or month) that you'd otherwise offer them to leave on, and fire them right then without any benefits?
That's a trick you can pull once. And after you do all of the skilled employees are going to be eyeing the door.
I like how open you are about doing class warfare, but destroying the small layer of ethics carefully woven on top of your business policy isn't a good plan in the long run.
What you described is a short term savings scheme that would destroy the company's long term reputation. Who would want to work for a management team that screwed employees like that?
It's hard to imagine that the cost-savings justifying the long-term consequences of losing of the best employees + candidates to competitors.
I know that in the old days, the long long ago, companies would sometimes act in ways that benefitted their employees out of little more than just not wanting to screw them over completely. Basically just out of niceness and decency. Maybe the people at Ford are like these old-timers who tell me about such things.
Also, I know that Ford certainly used to have a solid union. I wouldn't be surprised if they have workers who can't simply be instantly fired without cause and with cancellation of all benefits. Like some kind of worker's paradise.
I really hope that, for your and everyone else's sake, that you are not ever in a position of management at any company, seeing as this is the way you think about running a business and treating employees.
You're reading too much into the comment. I'm just looking for a list of the drawbacks. Two of the ones mentioned(unions, and long-lived stable companies depend on their reputation more than usual) hadn't occurred to me.
It's PR, but it's also protection from legal trouble. Typically when you give some kind of severance package you require the recipient to sign away any right to sue.
Also, with large companies even during layoffs they're hiring for particular skilled positions. You don't want to get the reputation as an employer which mistreats its people.
It's sad to see them struggling, because their car lineup has been absolutely brilliant for the last few years. But now that the industry is at it's plateau, investors are very paranoid about any car company trying to invest in new areas (Ford spent much of it's earnings on tech companies). They would rather just see dividends instead.