Why do so many companies in Metro Detroit go bankrupt?

[Detroitnerd]

When Borders was making money, they kept trying to gut the one thing people LIKED about them: That intelligent, well-read people were able to give expert advice to book-buyers. Instead, they cracked down whenever the work force tried to unionize, tried to turn them into low-paid "stockers" who knew nothing about books, and began an ill-fated expansion into CDs and DVDs [[remember them?). The whole while, they were using their profits to buy back stock and increase their personal wealth while not building their core business. So, um, there's one you can't blame on the unions; they actually knew better what made the business work in the first place.

Speaking generally, the usual reasons for business failure are:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

Oh, yeah. Keep blaming unions.

[iheartthed]

When Borders was making money, they kept trying to gut the one thing people LIKED about them: That intelligent, well-read people were able to give expert advice to book-buyers. Instead, they cracked down whenever the work force tried to unionize, tried to turn them into low-paid "stockers" who knew nothing about books, and began an ill-fated expansion into CDs and DVDs [[remember them?). The whole while, they were using their profits to buy back stock and increase their personal wealth while not building their core business. So, um, there's one you can't blame on the unions; they actually knew better what made the business work in the first place.

Speaking generally, the usual reasons for business failure are:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

Oh, yeah. Keep blaming unions.

Was/is Borders unionized?

[Detroitnerd]

Was/is Borders unionized?

Nope. They successfully blocked every effort of their workers to organize. I remember when the workers struck the Liberty Street store in Ann Arbor five years ago and had some long talks with them. They were warning the management even then.

[Redleg81]

Was/is Borders unionized?

To my knowledge, only the downtown Ann Arbor store was. Not sure if this is still the case, my fuzzy brain recalls a short-lived strike-- Maybe a few years back. Can anyone add more?

[iheartthed]

To my knowledge, only the downtown Ann Arbor store was. Not sure if this is still the case, my fuzzy brain recalls a short-lived strike-- Maybe a few years back. Can anyone add more?

Yeah, I do vaguely remember the strike now. I think I was still living in Ann Arbor at the time.

[mwilbert]

A high percentage of businesses everywhere go bankrupt. What I find unfortunate is the number of successful businesses which have been bought out and then hollowed out--all the banks [[except Comerica, which left all by itself), Hudsons, Motown, Cunningham's/Perry's, Stroh's. Not that that is unique to Detroit either.

[christos]

I used to work at Borders, and I work for the union that once organized store 1.

That being said, the downtown Ann Arbor store was briefly unionized- there was a CBA there for a couple of years, but when the CBA expired the workers never ratified a new one. Its a REALLY long story that I'd rather not get into as to why we never had a second contract, but its partly our fault.

As for management, I was the inventory supervisor in the Brighton store, and I couldn't believe the incredibly stupid things management would have us sell [[and actually INSIST on us trying to sell). I remember stocking things like pancake batter, meat rubs, and $6 little tins of "gourmet" Swedish fish- and getting pissed off because I knew I would be packing them up and shipping them back to the company [[which I did).

The other stupid thing corporate did was severely lower pay, fire experienced staffers, and go to an almost completely part time work force who knew little about literature. Once upon a time, you had to take a lit test to work there, but that has not been the case for years. Many of the older, more experienced staffers had regular customers who would recommend them books.

Due to our proximity to corporate, we got a lot of gossip as to what was going on there, and we heard that a bunch of former grocery CEO's took over Borders and had the mentality that "selling a book is just like selling a head of lettuce!" To date, I have never seen a book rot.

All that being said, Borders relied a lot on CD and DVD sales to fund its rapid expansion- and we all know what is happening to those industries. Between all that and the rise of eBooks, the industry in general is declining.

The question is then, why is BnN faring better than BInc? I think that in part, BnN's model was a lower skilled workforce that centered more on mass market/genre lit sales, where BInc was slightly [[and I emphasize SLIGHTLY) more "high brow" and had a clintele that wanted more service. It sounds weird, but trust me, I can back it up. When BInc adopted BnN's labor strategy, it hurt some of their base of customers, since service now became more or less equal in both retailers, what incentive was there to go to Borders? Also, BnN embraced eBooks much sooner than BInc did and I'm sure sales of its Nook are boding well for the company- though I'm sure its just prolonging the inevitable.

Just my 2 cents.

[Hermod]

Speaking generally, the usual reasons for business failure are:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

Oh, yeah. Keep blaming unions.

I think that we can blame both unions and management. The whole "Detroit model" for the auto companies, their suppliers, and the UAW was based on a monopoly/oligopoly practice. The unions demanded wage increases, management di a show of force to keep the demands from being too extreme, management factored the new wage agreements into their cost calculations, management figured the level of profit they needed [[after taxes since they considered taxes as a "cost"), and then set the price for the rest of America. The rest of America, being addicted to cars, went into debt to pay the price demanded by the Big 3/UAW. Detroit and the metro area swam in profitability.

Suddenly, a small cloud the size of a Volkswagen appeared on the horizon. Slowly European cars and later Japanese cars became available to the public and after getting hosed by Detroit, the rest of the country could now give Detroit the finger. The Big 3/UAW ignored the competition and steadily lost market share. Even though car sales are recovering, the Detroit area is still in the crapper.

[Zacha341]

Add to the list these three:

-Theft
-High taxation
-High insurance rates

Speaking generally, the usual reasons for business failure are:

-Inadequate funding
-Bad location
-Lack of a well thought-out business plan
-Poor execution
-Bad management
-Expanding too quickly
-Insufficient marketing or promotion
-Inability to adapt to a changing marketplace
-Failure to keep overhead costs low
-Underestimating competitors

Oh, yeah. Keep blaming unions.