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Obviously you don't know much about manufacturing. Let me help you - increased productivity alone doesn't mean increased profits, when you figure in units that have defects or need some other form of repair, at additional cost to the manufacturer, prior to delivery to the end customer.
Plus you need the requisite amount of advertising/marketing to increase demand and desire for the product.
LOL, Of course increased productivity increased profits.
If you are producing more cars for less expense of course you are increasing profits. You don't need commensurate increase in advertising, marketing etc. with increased productivity.
Quote:
Originally Posted by hooligan
Rolling 50 more units off the end of the line in a shift doesn't mean anything of 60 of those units are unfit for delivery to the customer, or there aren't customers to purchase them.
That's how increased productivity doesn't automatically mean increased profit.
How does rewarding the workers, AFTER a tangible goal, like profit, has been reached not encourage the workers to do their jobs better? More profit is a benefit to the shareholders, no?
Where did you get your MBA?
More gales of laughter. Of course if employees produce inferior products, that doesn't count towards the 120 widgets. (cars without doors and windshields, shall not be counted)
LOL, Of course increased productivity increased profits.
If you are producing more cars for less expense of course you are increasing profits. You don't need commensurate increase in advertising, marketing etc. with increased productivity.
You don't need increased demand to go along with increased supply? My Econ instructor would be shocked! Gales of laughter, indeed.
Also, you never said "for less expense" you said "increased production means increased profits". Nice work moving the goalposts as we talk, though.
Quote:
Originally Posted by shorebaby
More gales of laughter. Of course if employees produce inferior products, that doesn't count towards the 120 widgets. (cars without doors and windshields, shall not be counted)
Just sad..............
Have you ever worked for an auto manufacturer? I have worked for an IT consulting group that supported auto manufacturing - I can promise you that units needing paint/body or trim repairs absolutely WERE counted in the # of units produced for that shift. I was on the end of shift calls and heard it with my own ears.
[quote=hooligan;17885151]You don't need increased demand to go along with increased supply? Gales of laughter, indeed.
Also, you never said "for less expense" you said "increased production means increased profits". Nice work moving the goalposts as we talk, though.
LOL, don't you understand that increased productivity means making more widgets for less money? I think you need a different economics professor.
Quote:
Originally Posted by hooligan
Have you ever worked for an auto manufacturer? I have worked for an IT consulting group that supported auto manufacturing - I can promise you that units needing paint/body or trim repairs absolutely WERE counted in the # of units produced for that shift. I was on the end of shift calls and heard it with my own ears.
That's why American manufacurers were on the brink of extinction!
As to the hourly wage earner bonuses, I believe this is an attempt to quell other union demands as all US auto companies near entering into contract negotiations with the UAW.
IIRC, salaried employees also got a comfortable raise.
Bascailly i the end its the best thign i can see to demand that they start paying back those loans with interest.Certainly no more loans .Got a feeling that we are going to see the same things with GM and chrysler once gas prices rising as demand increases with their reliance on truck and SUV sales. Not much has change in their profits really.
"Productivity and profitability are important concepts and measures describing the performance and success of a firm. We know that increase in productivity decreases the costs per unit produced and leads to better profitability. This common knowledge"
"We investigate the nature of selection and productivity growth in industries where we observe producer-level quantities and prices separately. We show there are important differences between revenue and physical productivity. Because physical productivity is inversely correlated with price while revenue productivity is positively correlated with price, previous work linking (revenue-based) productivity to survival confounded the separate and opposing effects of technical efficiency and demand on survival, understating the true impacts of both. Further, we find that young producers charge lower prices than incumbents. Thus the literature understates new producers' productivity advantages and entry's contribution to aggregate productivity growth."
Here is a nice one about effects of technology on increased farming productivity and profitability.
The relationship between productivity and profitability can best be explained with a hypothetical example. Imagine a situation where two companies compete in the same regional market with access to the same input factors. Both have similar levels of productivity and profitability. If one company manages to increase its productivity, it will by definition be able to produce the same quantity of goods and services at the same quality level with less input, thereby enjoying a cost advantage.
Great, well, I'm an IT guy not an MBA, so if I didn't have the precise definition of productivity, with respect to manufacturing, down pat, I'll take the heat on that. Sorry.
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?
Well as I pointed out, bonuses tied to productivity do increase shareholde value through increased productivity. The bonuses awarded to the GM workers were for nothing.
Come on now. We all know those bonuses are for votes. We have an election looming in 2012.
If you get a bonus check on Christmas, is that a waste to your company's shareholders?
It's a reward for a job well done. These workers have had a tough past couple of years, and they're still working, and now GM is making a profit. It's not unreasonable to provide a bonus for that.
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.
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