Talk of The Villages Florida - View Single Post - Romney and Capitalism on Trial
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Old 01-24-2012, 08:53 AM
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Originally Posted by billethkid View Post
very many companies were run by people who were not necessarily the best of management. Most if not all were capable of managing on the upside,....i.e. businesses growing year after year with ever increasing sales and physical out put increases.

They got bigger and less efficient as growing businesses tend to continue to hire past efficient levels of operating....because the high revenues cover the costs.

Then when there is a slump or a down turn this same management is incapable of scaling back costs (labor, material, inventory, physical plants, multiple plants, etc.) to maintain acceptable profitability. At some point if the go-go days do not return, there is no choice but to have to "downsize" the business to what it can afford. That is when consultants or third party management is brought in to do what the current management has over time proven they cannot; downsize, work force reductions, plant closings, etc.

Like it or not these companies had to get their income statements and their balance sheets back to a size that produces acceptable results. Yes dumping old senior management usually goes with big numbers. Yes there are layoffs and putting people out of work. Yes there are inventory reductions that translate to lower volume of goods coming in the door that in turn translates into suppliers output/sales being reduced that ultimately results in their having to "downsize" their businesses as well.

The process of doing what has to be done is not a very pleasant one since it involves the reductions in employment from top to bottom...people being laid off, management being fired are the most visible results with the worst image to employment as well as the public.

With no disrespect intended, the average person has no concept of what the line items are or mean that drive an ACCEPTABLE FINANCIAL PERFORMANCE income statement or balance sheet. All they think they know is what they see and or hear from friends and family that work there that are being laid off.

That is why companies like Bain Capital exist. Hard nosed business men that do understand exactly what needs to be done to get back to profitability. They are the third party that has no emotional attachment to a given business. They have the luxury of detachment, that gives them much better visibility of the ills of a given company. They pull the trigger (no pun intended) when it has to be done.

They wear the badge of being the BAD GUYS. When in reality it was the former management that could make no errors on the upswing while go-going and growing and expanding and hiring. During the growing and going cash is no problem and the volume of it covers the sloppy and fat and inefficient operations that comes with big and growing profits. The test of REAL management is their capability to manage a business effectively on the down size. INCUMBENTS ARE USUALLY NOT CAPABLE of doing what has to be done to that which they created (good or bad). Hence the perceived BAD guys like Bain and other third party "fix it" companies.

And by the way the above causes of failing companies are exactly the same reasons we have a failing government. They have no concept of what an income statement or balance sheet is. They really don't care if revenues are down. They continue to spend and grow and go. When they run out of money (unprofitable....more being paid out than coming in) they just raise the debt limit (ALLOWING TO BORROW MORE). They are allowed to print money to spend. They are allowed to continue even to the point where they borrow to spend even more. The basic problem? INCUMBENTS!! Of the worst kind.....they don't know! They don't care! They are all wealthy so simply can't and certainly don't want to relate.

Yes employees only see the part that very unfortunately affects them.

I spent most of my career fixing companies that INCUMBENTS, ran into the ground while getting wealthy!

And for the very reasons above, I have no use for politicians because they are not capable of doing what needs to be done. The very reasons why I would much rather err on the side of non politicians or those running for office that have a business back ground.

We the people are the so called share holders of a very under performing, broken and degrading company called the USA. That is why it is so important to root out the incumbents. And please by all means do not be persuaded by the campaign rhetoric to put experienced politicians in higher offices. And throw out the current incumbents.

The solution to fixing America is as simple as fixing a failing company....bring in some one who can do the job.

btk
I would agree that the CEO of my company was a really bad manager, in fact he came to us from another IVD vendor who had been forced into bankruptcy under his management. In fact he was named one of the Top 10 CEO's for that year 2010 I think.

I forget how many years in a roll my company had paid a dividend but when he came in we were not a "stuggling" company. The reason he cut people was to have enough cash to buy more company which expands the net worth, I know there is a word for that but.....

Before he left we where able to fold 3 coporate site in CA all into 1 just because of how many people were pink sliped. Even in the face of that the new guys cut 8% more.

BTW...it only took him a couple of months to find a new high paying job...at least he isn't a CEO.