There's a more general problem. Who goes to college to learn how to set up a factory? Where do you go to learn that? That's a difficult skill, and it helps to have done it a few times as a junior before you're in charge. What happens if you don't know how is that you have to let the people who sell you the machinery set up your factory. This works for simple stuff, like a bakery, which you can buy turnkey. More complex stuff, not so much. Worse, much of the knowledge doesn't transfer. If you know how to design a production line for metal furniture, that may not translate well to batteries. One of the things that auto manufacturers have painfully discovered is that a battery plant is partly a chemical plant, which is not something automakers know much about.
Machine design is quite hard, not that many people are good at it, and it pays less than coding webcrap. The US used to have people who were good at this, and most of them were laid off in the 1980s.
There's an episode of This American Life about IIRC a sausage factory that gets moved, and the sausages for some reason do not taste the same. The tacit knowledge embedded in the old factory is an example of this effect. You think you know how something works, so you make decisions based on that, and it turns out your spreadsheet was wrong.
The same thing is the case with your example. It's easy to count the salaries and the cost of the new site, along with the expenses for the machinery.
Outsourcing is another one of these things, and problems are compounded when it's not just counting the costs/benefits correctly, but doing do at an appropriate time. You send your multi-year coding project abroad, spreadsheet costs are lower, manager who did it gets promoted, project falls apart.
There's a field called "industrial engineering":
https://en.wikipedia.org/wiki/Industrial_engineering
"Industrial engineering is an engineering profession that is concerned with the optimization of complex processes, systems, or organizations by developing, improving and implementing integrated systems of people, money, knowledge, information and equipment. Industrial engineering is central to manufacturing operations."
In the university I attended, the engineering school had a degree program for it.
Also, I'd presume that depending on what the factory produces, you'd have electrical, chemical, mechanical, aerospace, etc. engineers involved in designing and building the factory.
graduates of that degree work in working factories, manage people and optimize processes. I don't think they go into deep technical subjects.
That's very different from what Animats described.
Industrial and/or manufacturing engineering.
https://www.businessinsider.com/uaw-strike-automaker-ceo-pay...
According to your article the average hourly labor cost at GM is $60. Assuming 2,000 hours per year, that is $120,000 per employee. For 92,000 U.S. employees [0], the total is about $11,000,000,000.
Another way to look at it: If you distributed the CEO's compensation ($30,000,000) among GM's U.S. employees (92,000 [0]), you'd give each of them about $326.
So it's still a bit of a paradox why you would pay anyone so much over the odds. How confident can you really be that this one guy you found is going to increase profits by 10%? And if you do find this guy, why isn't there another guy with similar experience offering the same tradeoff?
This doesn’t show the full picture. It’s not about redistributing their salaries. Have a look at the excess returns procured BY labor and where that went.
This must be why CEO pay, relative to worker pay, has increased so much over the last few decades!
/s
Just look at stock price, dividends and/or executive compensation. They are obviously much more important than the people who actually make the product, provide the service or interact with the customer. For any actually important metric, CEOs add more value to the people who determine what value the CEO adds more than any other part of the business.
All hail our true lords, NASDAQ and DJIA.
/s
Just handwaving this aside is ridiculous. Productivity is a function of capital investment in technology. If all the free capital is going into share buybacks, $5 billion in the last year, no wonder productivity is flat.
https://www.levernews.com/automakers-hand-billions-to-shareh...
If automotive CEOs don’t want their assembly line employees to demand 40% raises, maybe they shouldn’t take 40% raises themselves. Since they have more than enough money to live on in multiple homes and boats they should have no problem making themselves an example of austerity for their employees.
I've seen this happen enough in software companies to know it's already a problem. They want 10x engineers but aren't willing to pay even 2x rates and sure as fuck aren't willing to give them good raises to keep them around.
Trying to browbeat labor into being more productive isn't going to work. Unless they really want the return of how unions used to behave a century ago.
Americans sympathize with people who complain that a Mexican took their job rather than telling them that if someone with 4 years of education can do what they do with 12 for 1/8th the pay, they are utterly pathetic.
