Founded inin Flint, Michigan, GM employs approximatelypeople around the world. With global headquarters at the Renaissance Center in Detroit, Michigan, GM manufactures its cars and trucks in 33 countries. Their European headquarters is based in Zurich, Switzerland.
The price of the Model TFord's mainstay product, had been successively cut over the years while the wages of the workers had dramatically, and quite publicly, increased. The company's president and majority stockholder, Henry Ford, sought to end special dividends for shareholders in favor of massive investments in new plants that would enable Ford to dramatically increase production, and the number of people employed at his plants, while continuing to cut the costs and prices of his cars.
In public defense of this strategy, Ford declared: My ambition is to employ still more men, to spread the benefits of this industrial system Michigan pontiac case essay the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business.
While Ford may have believed that such a strategy might be in the long-term benefit of the company, he told his fellow shareholders that the value of this strategy to them was not a main consideration in his plans. The minority shareholders objected to this strategy, demanding that Ford stop reducing his prices when they could barely fill orders for cars and to continue to pay out special dividends from the capital surplus in lieu of his proposed plant investments.
The Court was called upon to decide whether the minority shareholders could prevent Ford from operating the company for the charitable ends that he had declared. Judgment[ edit ] The Michigan Supreme Court held that Henry Ford could not lower consumer prices and raise employee salaries.
Notably, obiter dicta in the opinion written by Russell C. Ostrander argued that the profits to the stockholders should be the primary concern for the company directors.
Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoliation of the company's assets.
It said the following: A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end.
The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes Shareholder value and Squeeze out As a direct result of this decision, Henry Ford threatened to set up a competing manufacturer as a way to finally compel his adversaries to sell back their shares to him.
Subsequently, the money that the Dodge brothers received from the case would be used to expand the Dodge Brothers Company. Ford was also motivated by a desire to squeeze out his minority shareholders, especially the Dodge brothers, whom he suspected correctly of using their Ford dividends to build a rival car company.
By cutting off their dividends, Ford hoped to starve the Dodges of capital to fuel their growth. Ford was denied the ability to arbitrarily undermine the profitability of the firm, and thereby eliminate future dividends.
Under the upheld business judgment rule, however, Ford was given considerable leeway via control of his board about what investments he could make. That left him with considerable influence over dividends, but not complete control as he wished.
This case is frequently cited as support for the idea that corporate law requires boards of directors to maximize shareholder wealth.
However, one view is that this interpretation has not represented the law in most states for some time. Among non-experts, conventional wisdom holds that corporate law requires boards of directors to maximize shareholder wealth.
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This common but mistaken belief is almost invariably supported by reference to the Michigan Supreme Court's opinion in Dodge v. This was not and is not the law. Shareholder wealth maximization is a standard of conduct for officers and directors, not a legal mandate.Find Robert Martin in Pontiac, Michigan: phone number, address, email and photos.
Spokeo is a leading people search directory for contact information and public records. case of year-old convicted on adult murder charges Nathaniel Abraham released from state custody in Michigan By Larry Roberts 24 January Welcome to the Michigan Department of Correctionsâ€™ searchable database, which we call the Offender Tracking and Information System (OTIS).
All of the records contained in OTIS are for prisoners and parolees who are CURRENTLY under the jurisdiction of the MDOC, as well as those serving a prison sentence but who are out on writ. Arnold Weiner is a Criminal Defense Attorney in Pontiac, MI.
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After 15 hours of deliberation, a Pontiac, Michigan jury on Tuesday found year-old Nathaniel Abraham guilty of the second-degree murder of Ronnie Greene. Abraham was found not guilty of three. Nov 17, · Michigan is one of the leaders in a move by Republicans to allow ever younger children to be tried as adults with a judge's permission and for an ever lengthening list of crimes.