True, labor costs are a factor–but the main factor is that GM built crappy cars for twenty-five years; clearly a management failure.
However, I agree that keeping dead weight around is a bad thing for a business’ owners.
Their uncompetitiveness is the major factor. How can you blame it on quality? If you sell enough cars at a loss, you’ll make it up in volume? Volume’s the key here; GM has it. Not everyone is as ignorant as you when it comes to GM quality, which is why they’re always number 1 or number 2 in units sold. GM’s are popular, mass market cars. If they didn’t have the overhead they have (which you can pin on bad management), they’d not be ready to enter bankruptcy.
There are better quality cars than GM. But GM’s quality hasn’t “sucked” in years.
Not always. IME in Electronics Retail, the “Dead Weight” was the people who’d been in the industry for years and knew things (like how to make circuits and maybe even fix a radio), but they’d have lower overall sales figures because they’d spend more time with the customers, or they’d be semi-retired and only work 3 days a week.
So, head office looks at the sales figures, says “Get rid of John, his figures are terrible” and then the store would lose the only person who knew how a Radiation King “Megaton” TV worked (and they were still making them until probably 10 years ago so there are a LOT still out there), and he’d be replaced by a 15 year old the company only had to pay $8 an hour to.
And then the customers would whinge that no-one in the store knew anything, and they’d start looking elsewhere, ultimately hurting that stores sales by far more than the company had saved by replacing John The Experienced Senior Salesman with McLovin’.
And their website isn’t much better. It’s boring, it’s crap to navigate, and it’s just badly designed.
There’s more wrong with Sears than their treatment of their employees.
I actually like their website and its organization, for product searching. I’ve never tried to dig into anything deeper, admittedly.
Note: KMart bought Sears, not the other way around. And the KMart that bought them wasn’t the original KMart but the former holding company that ended up owning KMart after it went bankrupt. These people are seriously nasty about running a business. Try reading about how they managed to take over KMart with the collusion of KMart management at the expense of the stockholders sometime.
These people have a long history of having no interest in stockholder’s money. It’s just smash and grab at the corporate level.
We called that a Kleptocracy when I was in business school. 
We call that “business”.
It certainly is not typical of most businesses to ignore the needs of their shareholders.
Shareholders don’t have any say in a top US company anymore. The management finds yes-men directors, they go into business with big Wall Street firms that manage large mutual funds. These fund managers do the actual voting, the people who own shares in the stock have little to no say-so in how the mutual funds vote. The company borrows from their friends until they go bankrupt. Everyone gets 8 figure bonuses for the great job. The debt holders own the company, the stockholders get nada. Cf. KMart, the airlines, the car companies, etc.
The way an actual company works today is not at all related to what you were told in grade school.
I don’t know anything about sales commissions, but I do know corporate is slitting their own throats around here. We live in a small town in rural Appalachia, and our local Sears is a tiny one that only sells tools, appliances, and a few electronics. This is pretty common in the area, the closest Sears that sells softlines is two hours away.
Our fridge died last year, and we found one on the website we really liked. Went over to the local store on a Sunday afternoon, they didn’t have one in stock, but they could order it for us. Went through all the ordering rigamarole, and then the clerk told us they could have the fridge installed for us Friday after next. WTF? Two weeks to get a fridge, when I know you get a stock truck in three days? Really? Really.
They only get the one stock truck a week, you see. And although it comes on Wednesdays, Sunday is too late to get a special order put on there. So it would have to wait until next week’s truck, and then the installation team had stuff already scheduled for that Thursday. Friday was the earliest they could get us set up to refrigerate our food, unless we wanted to switch to one of the models they had in stock.
Now, it’s one thing to go without a tv or an oven or a power tool for a couple of weeks. Kind of annoying, but not that big a deal. Two weeks without a fridge is a big freaking deal. We told the clerk so, and he agreed it was ridiculous, but it was corporate policy and he couldn’t do anything. So we canceled the order and went down the street to Lowes. They had what we wanted in stock and brought it round the next morning, but even if they hadn’t the guy said it would have been in by middle of the week.
I wonder how much that sort of shit has lost them in sales over the years, especially since the Lowes came in.
CrazyCatLady, you were doing business with a struggling company that can’t stock as much stuff as Lowes. They are trying to compete, but with less resources.
That’s the market in action. Go to Lowes and spend your money there if that is what you want as a customer. You shop around and find products and services that you want. Looks like Lowes for you.
To another shopper, they might have seen something from Sears that was better, like a deeper discount for a wait, or some other perk for the delay, etc, like additional warranty coverage.
It would have to be one hell of a perk to make up for two weeks of having to go to the store every couple of days because you only have a cooler’s worth of room for all your perishables, having to trot out to buy bags of ice to keep in said cooler, etc. And being a struggling company with less stock has dick all to do with needing more than three days lead time to put an order on the truck along with the rest of the stock.
So yes, it was Lowes for us, that time. Because it’s just not reasonable to expect people to go without a refrigerator for that long.
What about what they told me when I was working on my MBA?
I never said anything about what kind of voting power or “say-so” that stockholders have, but it is not SOP to ignore their interests.
Sales in general has been getting worse and worse for years - face it, a 10% commission (common years ago) adds a lot of overhead to the product. So you cut the commission and you can sell the product cheaper. You do that over and over again so that commissions have gone from 10% to 1% in a lot of industries over the past 15 years. This has caused a lot of salespeople to leave sales jobs.
It should be, though. We’re in this current financial fuck-up because of business pandering to shareholders and not their communities.
This is very true. Minimum wage +1% commission on something with almost no profit in it anyway just isn’t worth the hassle, abuse, or stress for most sales staff. It’s another reason why the staff at your local Electronics Store are likely to be high school kids or young twentysomethings working out what to do with their lives than professional Salespeople.
Yes, all businesses and the world at large would be better if the owners of corporations would hire people who ignore them. That’s makes a ton of sense.
No, I mean that instead of Looting & Pillaging in an economic sense to squeeze every last cent out of a business to please “The Shareholders”, if profitable businesses said “Look, we’re already $100m in the black this year, so no, we’re not going to lay off 300 people or slash advertising costs just to give the shareholders an extra 2c/dividend” then I think we’d all be better off. That’s not “ignoring the people who own the company”, that’s saying “Hey, we’re the ones who do the work, you’ve already made a bucketload this year, and we’re not shooting ourselves in the foot (by cutting costs and laying off staff) so the shareholders can have an even bigger dividend than the one they’re already getting”.
You’re grossly misrepresenting what is happening. They aren’t laying off people so that they can pay a dividend. I sit in on earnings calls daily, and I can tell you that none of the businesses that are hurting right now are paying a dividend. That’s laughable. They’re laying off people because they don’t have the money to pay them.
If you’re using terms like “bucketload” to describe any kind of earnings by shareholders in the past year or two, you really don’t have the slightest idea what’s going on. Perhaps you’ve heard about what has happened to the stock market over that period of time.
Sears isn’t the company behind these shenanigans; Sears sold their credit/financing division to Citigroup in 2003, which has called the shots ever since. Citi also tries to convert most Sears-only cards into Sears-branded MC/Visa cards (typically any account in good standing at card renewal time) to increase card use outside of the limited range of the Kmart Holding chains.
I’ve had a Sears line since 1993 that stayed pretty stable for a decade, and once Citi began administering my account, it began severely messing with the terms and such, though having the card become a branded MC did make it more useful on a daily basis. (And the $1500 credit line Sears and I had been content with ballooned to $45000 under Citi’s ownership, despite the fact that I never even came close to using the riginal $1500!) I keep the credit line because it looks good to have had an account for so long, but took the card out of my wallet and stopped using it after Citi messed with my terms just a little too much earlier this year.