I sincerely doubt that consumers have ever demanded lower quality tools or machinery. Blaming the consumer and labor unions while gutting a company is a classic Wall Street / PE strategy.
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I sincerely doubt that consumers have ever demanded lower quality tools or machinery. Blaming the consumer and labor unions while gutting a company is a classic Wall Street / PE strategy.
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Peter (great taste in names btw),Originally Posted by Peter Kelly
If consumers were not willing to make the trade off of price and quality, they would not buy the lower quality, lower priced machines. Grizzly would cease to exist, and never would have taken enough of Delta's market share to cause their I'll-fated change in strategy.
"demanded" is more an economic term for purchasing behavior, than it is a mob of consumers with pitchforks and megaphones.
The economic meltdown would not have happened if people hadn't taken out mortgages they couldn't afford. This was, in part, an issue of consumer financial illiteracy. Of course, the other part was corporate greed. Both wall street AND consumers caused the meltdown. It also wouldn't have happened if wall street hadn't fanned the flame of this irrational behavior by buying mortgages lent by mortgage brokerages that should've rejected applications from uncreditworthy consumers.
Both conditions caused the problem.
It is an excellent corollary for you to draw because both the meltdown and the Delta failure were caused by multiple conditions at once.
In hindsight, Delta probably would have been able to compete if they handnt tried manufacture offshore AND keep prices on the higher end. But if consumers didn't want low priced machines, this never would have been an issue and Delta would continue on.
These are complex issues and it's overly simplistic to blame only one of the contributing factors.
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Well, I for one will pass on taking any responsibility for what happened to Delta. I supported them. I bought 4 tools from them (3 of them were US made).
Powermatic found a way to survive. General did too.
PHM
Member
I'm sure former B+D CEO Nolan D Archibold would certainly agree with your points regarding the economy and consumer attitudes. He was certainly worth the $123m he took home in 2014.
His team really did some great work with Delta.
Contributor
Idea: Grizzly can buy out Delta and reintroduce it as their 'premier' brand. At least the company would be well run.
PS: If anyone thinks that controversy is new with the Delta/Rockwell name, see the recent post about the Iturra catalog. There is a great story at the end of the catalog about how Rockwell (Delta) evolved. You could make a movie about it. Small company takeovers, labor strikes, union busting, mergers, new factories, selling off assets, moving overseas, total divestment.
Story of Jet there also.
Last edited by Rick Potter; 04-16-2015 at 2:34 PM.
Rick Potter
DIY journeyman,
FWW wannabe.
AKA Village Idiot.
Member
You don't seem to be interested in engaging in an intelligent discussion, so that's it for me in this thread...
Contributor
I thought it was intelligent.
Never, under any circumstances, consume a laxative and sleeping pill, on the same night
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Companies exist to drive benefits for their shareholders (individuals, mutual funds, pension funds, etc). They do not exist for the benefit of consumers or workers. In this country we probably have hundreds of thousands of pages of laws and regulations around what you can and cannot do when running a company. Things like how much you have to have in the pension fund, etc. It's the duty of the CEO and the board of directors to maximize the profits of the company for the shareholders and that usually puts them at odds with the workers. In Arizona, all realtors have a legal obligation to maximize the seller's position. That's important because even if you have been working with a realtor who has shown you dozens of homes, their legal obligation is to the seller and not you their buyer. They never tell you that, but at least in AZ that's the law. The CEO is obligated to the shareholders and the board of directors (voted in by the shareholders) decide how the CEO is incentivized and paid. The board created a set of goals and rewards for the CEO to drive a set of goals. Sounds like the CEO met or exceeded the goals meaning he did exactly what the board wanted. The CEO above likely followed all the laws and worked to maximize what his personal pay package but that's what he was asked to do. When the public get all upset about CEO pay packages they are misdirecting their anger. The Board of Directors who are voted in by the shareholders of the company are responsible for setting goals and rewards. If the CEO drives to the goals and the results are bad then shame on the board.
Contributor
Jack Nasser showed the exact opposite of what you say.
From the day "Jacques the Knife" became CEO at Ford Motor he proceeded to tear the company apart. It's a good thing Bill Jr. stepped in and fired him.
How much have Delta, (or whatever company owns it) stocks increased in value? The company/name has been torn apart, and put in the nearest dumpster.
Financial laws allow an individual/group to buy a company, take it apart, and let it fold. All the while writing off the losses and bringing home a profit. Unbelievable.
Never, under any circumstances, consume a laxative and sleeping pill, on the same night
Member
It's not a demand for lower quality machinery, it's a recognition that most people don't need high-end, high-priced machines to do what they want to do. Most people don't care about accuracy to a thousandth of an inch. They want to get close enough and if a $300 Taiwanese machine can do it, why buy a $3000 high-end machine? Delta was a big company. They can't rely on a small handful of people who are going to seek out a high-end, high-cost machine. It isn't greed to recognize that they need a bigger chunk of the market. That's not greed, that's business reality. Neither is it a failure of consumers if they realize they have no need for something that they will never use, at a much higher cost. That's why cheap Harbor Freight circular saws outsell Festool track saws by a huge margin. Most people have no need for Festool.
Contributor
Interesting internet search:"people who serve on a board of directors for several companies." Correct me if I'm wrong , but the more shares one has, the more votes or clout his vote has in deciding the BOD. Kind of a good old boy thing going on here, you be on my board, I'll be on yours. But, of course, there are very few people capable and qualified to be on a BOD or CEO, right[tongue in cheek]? So to state the obvious, execs typically own high portions of shares in their own and their buddies companies. They and not the guy who owns a few shares in a 401K mutual fund are the real drivers of who gets what as far as compensation. Again the good old boy thing, we'll give you xmillion for being CEO of company A if you give me xmillion for being CEO of company B.
Last edited by Jon Grider; 04-16-2015 at 7:02 PM.
Contributor
Most directors own very little of the companies stock, too little actually. A few very wealthy activist investors like Carl Ican are the exception. The good old boy element emerges when the board nominates directors and the shareholders are apathetic. I don't recall the statistic, but getting voted off a board is about as likely as a judge being voted off the bench. Lots of bad directors and lots of bad judges but neither get voted out much.
I'd also add the even though what these corporate raiders and CEOs do is usually completely legal, it's not something I'd be able to do and still look at myself in the mirror.
One last thought. I have a friend who has a small company where most employees are 20-30 and most customers are under 35. He is about 50. His observation is that 20 years ago most people 20-30 had a moral compass rooted in religion, knowing right from wrong, and feeling guilty when you did wrong even if you weren't caught. He says that the new moral code is "it's ok if you get away with it".
Last edited by Joe Jensen; 04-16-2015 at 7:00 PM.
Contributor
"Options are a compensation tool designed to retain executives and reward performance. And while they are increasingly being replaced by shares of restricted stock in executive pay, they still made up 31 percent of the average long-term incentive package in 2012, according to a 2013 analysis by James F. Reda & Associates, a compensation consulting firm."
I suppose it would take a monumental grassroots effort by small shareholders to effect a BOD change. I don't think it's apathy but a lack of coordination amongst small stakeholders to even know how to get an outsider unto the board and the existing board sure is not going to help.
And for what it's worth, I totally agree with your last paragraph.
Contributor
The strange thing is that it seems at least for larger stable companies larger institutional investors hold a large portion of the shares. It would seem that they would be more active. At least with my employer we listen to what the large shareholders want to see.
Member
Well, back to the original post. I have many old US made Delta/Rockwell machines ranging from the late 40's to the early 80's, a Powermatic PM66 Table Saw a PM100 planer and an old Dewalt RAS. Top notch quality on all of those machines. I needed to upgrade my 6" jointer to an 8" and I couldn't find anything good second hand so I begrudgingly ended up buying a new Powermatic 8" jointer. It's not a bad machine but the quality is just not what the US manufactured machines of 40-50 years ago, especially the cast iron table. Those old Delta tools (I put the Powermatic in the same ball park) are hard to beat.
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