Friday, 15 July 2011

Possible explanation for Rob Ford's ignorant blunders

Is he running a government or making widgets? - Peace, order and good government, eh?
This is Ford explaining
to talk radio host John Oakley why he thinks Toronto's labour costs are
too high and there should be large reductions in staffing:
In business, the first thing you look at is the labour and
your labour should be making up, you know, maximum 20 per cent. Not,
well, we're at 80 per cent. It's just unheard of.

Now don't you think that might depend on the business you're in? If
you're manufacturing, it's quite possible that raw materials, plant and
equipment will account for 80 per cent of your costs while labour
represents the other 20 per cent. And if the raw materials represent the
biggest chunk of that 80 per cent, it's entirely possible that's the
first place you should look when you're trying to reduce costs.

Yes, as POGGE points out, it depends what business you are in. Much of what the government provides is labour intensive - services. So, it makes sense that labour costs take up the majority of your expenses.

POGGE's conclusion:

I've had the impression that Ford is one of those who thinks you ought
to run government like a business. But last time I checked, that
involves actually examining the business you're in and making
intelligent decisions based on what you know and observe, not pulling
numbers out of your ass and pretending they mean something.

Ford is trying to apply force manufacturing business knowledge on an altogether different structure. You would think that being on council for years he would have noticed the differences by now. An even bigger problem is that a majority of city councillors also can't tell the difference and they support Ford's blunders.

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