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Everybody knows that bonuses based on profits should only go the managers. The workers should be paid less so the profits next year will result in bigger managerial bonuses. The stockholders can have whatever is left over. That is the Right way to run a company.
Your proposals are excellent example of class and race discrimination typical of mismanaged American industry. Pay the posers and punish the workers.
Everybody knows that bonuses based on profits should only go the managers. The workers should be paid less so the profits next year will result in bigger managerial bonuses. The stockholders can have whatever is left over. That is the Right way to run a company.
Your proposals are excellent example of class and race discrimination typical of mismanaged American industry. Pay the posers and punish the workers.
Can we get back to my original point where you said that bonuses paid for increased productivity is OK, because that's good for the shareholders BUT bonuses paid for profitability are not OK, even though profitability is also good for the shareholders?
Afterall, as you so succinctly stated above, increased productivity leads to increased profitability. Do you *know* that increased productivity wasn't, in fact, the reason for the profits?
Ok so now you understand the relationship between increased productivity and profitability. Next let's look at incentives.
I have no clear idea about all aspects of GM's profitability but certainly shedding certain brands, having their debt wipped out and $50 billion from you and me helped.
Now paying a bonus for profit already made, not based upon increased productivity makes no sense. Suppose GM made $2 billion last quarter without bonuses. Would paying bonuses now increase their profitability? Well of course the answer is no, it would imapir their profitability.
However if they offered bonuses, at the begining of the quarter and said if you make 10% more cars (this is a hypothetical) we will give you a 5% bonus. Productivity would go up as well as profitability. I know this may be a bit much since you are still digesting the first lesson, but this is the way it works.
...I have no clear idea about all aspects of GM's profitability but certainly shedding certain brands, having their debt wipped out and $50 billion from you and me helped.
Now paying a bonus for profit already made, not based upon increased productivity makes no sense. Suppose GM made $2 billion last quarter without bonuses. Would paying bonuses now increase their profitability? Well of course the answer is no, it would imapir their profitability.
However if they offered bonuses, at the begining of the quarter and said if you make 10% more cars (this is a hypothetical) we will give you a 5% bonus. Productivity would go up as well as profitability. I know this may be a bit much since you are still digesting the first lesson, but this is the way it works.
LOL Thanks for the condescension, that's big of you.
You're still not answering my question. You said increased productivity bonuses are OK, because that's good for the shareholders. But profit sharing is not OK, even though profit is obviously good for the shareholders as well. You then further admit that you have no idea what factors contributed to that profitability.
Not to mention that GM almost certainly has contractual obligations with the UAW to pay profit sharing, so it's not a choice.
LOL Thanks for the condescension, that's big of you.
You're still not answering my question. You said increased productivity bonuses are OK, because that's good for the shareholders. But profit sharing is not OK, even though profit is obviously good for the shareholders as well. You then further admit that you have no idea what factors contributed to that profitability.
Not to mention that GM almost certainly has contractual obligations with the UAW to pay profit sharing, so it's not a choice.
LOL, I can assure you by giving bonuses at the end of the quarter most assuredly decreased profitablity. This was clearly a a choice, they were under no obligation to do this. I can prove to you the bonuses did not increase productivity. I think everyone reading this knows how. Do you?
Which is exactly the sort of flawed thinking that got them into the mess they were in, I'm thinking.
Everyone has had a bad tough couple of years. And some of us lost our jobs. The difference is that the govt took MY money to bail out a FAILED business model, then allowed them to continue on with BUSINESS AS USUAL.
And just so you know, I was against bailing out banks, too. You should succeed or fail on your own.
Yes, GM failed. But paying workers bonuses for a job well done (and GM is profitable, so that makes it extremely likely that they have done their jobs well) is a common business practice. What makes you think GM is doing "business as usual"?
Good for you for being against any of the bailouts. You do realize that had GM gone bankrupt and liquidated in late 08 or early 09, the recession we had would have been an order of magnitude worse, right? Are you prepared to accept that a million people or more could lose their jobs for the sake of your own personal sense of consistency?
LOL, I can assure you by giving bonuses at the end of the quarter most assuredly decreased profitablity. This was clearly a a choice, they were under no obligation to do this. I can prove to you the bonuses did not increase productivity. I think everyone reading this knows how. Do you?
Where did I ever claim that the bonuses did increase productivity?
I simply stated that increased productivity may have been the reason for the increased profitability. You admitted that you don't know that increased productivity was NOT the cause, or one of the causes, for the profitability. Right?
Can you prove that there is nothing in the contract between the UAW and General Motors that guarantees profit sharing for the employees? I can't find the current contract, but the Profit Sharing Plan has been clearly spelled out in contracts past.
Where did I ever claim that the bonuses did increase productivity?
I simply stated that increased productivity may have been the reason for the increased profitability. You admitted that you don't know that increased productivity was NOT the cause, or one of the causes, for the profitability. Right?
Can you prove that there is nothing in the contract between the UAW and General Motors that guarantees profit sharing for the employees? I can't find the current contract, but the Profit Sharing Plan has been clearly spelled out in contracts past.
Well why would you offer a bonus if it's effect wasn't to increase productivity? You already paid the workers a salary, why would you decrease your profitability?
Let me ask you this. Did giving the workers bonuses increase or decrease the profitablity of GM? I'll end the suspense, it decreased it. Decreasing profitability is not in the best interest of shareholders.
Last edited by shorebaby; 02-16-2011 at 09:36 AM..
Well why would you offer a bonus if it's effect wasn't to increase productivity?
Can you prove that the profitability wasn't a result of increased productivity?
Quote:
Originally Posted by shorebaby
...why would you decrease your profitability? I'll end the suspense, it decreased it.
I have no idea what this even means.
Quote:
Originally Posted by shorebaby
Decreasing profitability is not in the best interest of shareholders.
But any bonuses would decrease profitability. So why would any company pay bonuses? I would assume it's because the corporation believes that the profits, even after paying out the bonuses, will be greater than had they not offered any bonuses to begin with.
Quote:
Originally Posted by shorebaby
Let me ask you this. Did giving the workers bonuses increase or decrease the profitablity of GM?
From what I've read in Automobile News & elsewhere, the old playboook in which the Deroit Three would pump out cars nonstop even if they were lousy sellers which the dealers didn't want has been demolished; their 'new playbook' now consists of much tighter inventories at their dealerships, even if it means those same dealers cannot get enough of hot-selling cars such as the Focus & Malibu.
Consequently, the next time you go to one of their dealerships, you'll have a much smaller selection of cars to choose from.
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