Let's Face It : Part 1 (1952)

la la [Applause] [Music] hey Mary wake up hey come on beautiful wake [Music] up for Mary the day started like any other day she got Mike's breakfast did the dishes and then remembered she had an appointment with a [Music] doctor well good news you're going to have a baby you're sure I'm sure as you can see it folds down very easily on top of the [Applause] buggy that's it the Little Giant oh what a deluy buggy for my baby I'm going to have a well I just wanted to look at one of them well that's perfectly all right this is our finest buggy it has all oh they can't do that it's the same one my sister has you put the price up too high when did your sister buy hers 2 years ago price has gone up three times since then but it's the same buggy just the same right over here we have one that's quite a bit cheaper but I don't want another one I want this one why does it have to cost so much well we have to pay more for it ourselves and for that oh I think that's mean well I just won't pay that much for it oh and it's such a beautiful buggy you tell them they're just going to have to sell it cheaper you tell them that sure sure I'll tell [Music] him well I just found out about it today Sis oh I'm so excited well I just can't wait to talk to you about it isn't it wonderful see why don't you and Fred come on over tonight huh well I've got some of the cutest little patterns you know for KN [Music] just w here come on in make home I'm so happy hey what is this maybe you better open this H what's that oh my golly for me gee this is SW this isn't my birthday though hey now what do I want with this hey don't hold it like that it's for our baby why Mike don't you want a baby Mike you always said you did I sure what do you know a honey it's wonderful look don't you want to sit down and be comfortable don't you be silly you two go on and sit down and Jean and I will make some coffee huh now go on I didn't know for sure till the doctor said today but I bet you'll never guess what I did oh I bet I can't what I remember what you and I did when we found out about Fred junor we went right out and bought a baby Bucky did you buy one today no but I looked at one and have I something to say to Fred you and your bunch of little giant chislers well me hey wait a minute I only work there the price you charge for that buggy it's wrong robbery I won't pay it yeah I know honey there's a lot of talk about that but what can I do about it you're any accounting department why don't you make them put the price back where it ought to be you know we may have to get out of the buggy business grow sales are way off operating costs are way up why our direct costs are double talk why don't you talk so I can understand it don't let her get you down Fred Mary nobody can talk plain English about things like that or some ordinary mut like me might understand what it's all about it used to be true Mike but there's a way of putting it so everybody can understand it like me sure well and give you really want to know oh now don't get Fred started oh but I want to know everybody thinks I'm so dumb Mary no they don't well about things like this I don't know from nothing I want to know why my baby buggy should cost so much so give all right when you want something like the buggy you think of going right down to the store and buying it with money so far so good well in the old days when you wanted anything you had to make it you had to supply the tools you had to figure out how to make it you had to do the work of making it yourself you were your own customer right right well now suppose Mike were smart enough to do all of that himself then how much do you think it would cost to to make anything well I suppose whatever his time was worth let's let's think about that for a minute suppose Mike is a pioneer he's out in the wilderness someplace and uh he wants to clear a little piece of land you know to build a house for his family to live in what's he got to work with he's got himself his own brains and muscle his human energy and then he's got whatever he can find in nature natural resources now you put put an axe in his hand and he's in [Music] business the better the axe the less time and effort it'll take to cut down a tree a saw would be better a power saw would go still faster you see what I mean with all the technical accounting and legal gobble deg there are only three things involved in the cost of anything any goods or services only three yes and the first is natural resources like the tree that's right you cut on a tree to make Lumber you take some clay and mix it with straw to make bricks you mine copper and iron ore and coal these are natural resources yes but you need more than that oh you mean Mike sure the work that Mike does or I do in order to make anything the use of our brains and muscle our human energy and then the third thing the axe or whatever you work with in your job tools tools are what get the job done faster and better and with a lot less human energy now today most of us work in a factory a mine or an office and we've developed our tools a long way from something simple like the ax but the idea is just the same and so the cost of my baby buggy takes in what' you say natural resources that's right work human energy and tools so suppose Mike wants to go into the business of making and selling baby buggies now what's the first thing you ought to think about me no she's right she wants to buy a buggy that's right the first thing Mike has to figure out is how many people want to buy baby buggies then he's got to figure out how to make them and how to sell them at a price people would be willing to pay now you're talking that's just what I was saying they cost too much wait a minute hold it we'll get there in a minute but let's start here he needs tools he needs a factory he needs r materials power tools desks lockers adding machines typewriters paperclips everything it takes to produce now where are they going to come from some rich guy like us hey wait a minute what are you talking about you Mary Jane and me oh look I haven't got that kind of money you got any insurance yeah got a bank account well most people about four out of five have insurance a lot of people have bank accounts about three out of five you mean I could go to a a bank or some big insurance company and borrow the money what do you think they do with the money they invest it certainly now whose money do you think it is it's ours People Like Us hey that makes me a capitalist well what did you think a capitalist was well well I always thought of a capitalist is a a big fat guy in striped trousers and a stovepipe hat did you ever look at yourself in a mirror I am not fat no you're cute oh wait a minute look we both saved some money and bought houses right right like your dad he owns his own house and rents the upstairs doesn't he oh does that make him a capitalist just what is a capitalist well anyone who saves some money and puts it to work so it'll earn something like your dad now how does he decide how much rent to charge well he he can't charge what he pleases and he can't charge too much or nobody rent from him then he has to pay taxes and set aside a little for things like papering painting repairs there's always something more than that he hopes to have enough left over to give him a little income in other words he charges a competitive price and tries to earn something on his investment oh why not dad's retired and he needs the money funny I never thought of it that way well it's a free country I I'm only making the point that we're capitalists I see but getting back to the Baby Buggy business I still need a factory all right you're the guy who's trying to start a factory you are management okay so I'm management what am I supposed to do first first you'd see an investment banker if he liked the deal he'd arrange to issue stock then he'd sell the stock to people he knows who are looking for a good place to put some savings they're the stockholders they furnish the money for the Tools H sounds pretty complicated sure does no no it isn't really you need money an investment banker knows people with money to invest he simply arranges to get you and the stockholders together okay but how do we get together well maybe I can show you now you just imagine yourself somewhere in an office you are there as management and you are also there as the stockholder how are you Mike I understand you want to get together how are you Mike yeah let me tell you about this that's what I'm here for I'm looking for a good investment I've got one for you there's a good market for baby buggies Mary wants one and a lot of people people like or want them maybe they do so what I've got a plan to make them better and cheaper it'd be good business that's what you say as a guy with money to invest the only thing I'm interested in is what will the investors get out of it I got to think about that well I got to have a factory look it makes sense people have babies every year every week some weeks as many as 40,000 babies are born they'll all want buggies it'll be a good steady business it'll be a good investment sounds pretty good let me think it over there's always a risk in a thing like this okay that's fair enough I want to build that factory well Mike is finding out that he isn't an easy guy to do business with when he's on the other side of the fence but let's suppose that everything goes all right now he's finding out that a necessary part of the cost of any business is the cost of getting the tools now ask yourself this question where the tools come from they always come from an investment the risking of savings whether you're renting the upstairs or buying stock you expect to get something from it mhm I can see that okay that's a beginning now the next thing that Mike as management has to think of is bringing the workers and the tools together you've been in plenty of bargaining sessions Mike all right suppose you're an employee but you also represent the guys in the new plant now this time just imagine yourself as a worker and there you are again as management Mike do you represent the employees in this new plant that's right well it looks like the boys will have good steady work we've got a sweet setup and ought to be able to knock the ears off competition setup's pretty good but how about the bo this plant's going to make a lot of baby buggies and a lot of Dole the boys feel the wage rate ought to be higher than Little Giants you're forgetting costs Mike I wonder if you're not missing the point we wouldn't be in business unless our lost are lower unless we give customers a better buy suppose I pass all the savings on to you and to the stockholders I'm not interested in what you do for the stockholders okay suppose I pass them all on to the boys then our prices will be as high as little giants then we get some business maybe and the boys find themselves working 3 days a week don't they want steady work sure they want steady work and every dollar they're entitled to I'm here to see they get a fair Shake on wages and don't forget we're the guys that buy the buggies too now are you beginning to see what a problem it is as a workers representative you've got a lot of things on your mind and as management you have to remember that a lot of people have risked their money in this Enterprise and you have something else to remember too your customers you know you can price yourself right out of the business and then everybody loses there's something I'd like to get straight if I was a stockholder I'd want to return on my money or else or else you'd get somebody else to run the business mhm and if that didn't work you'd pull out entirely but it wasn't too late come on boys let's break it up huh I get what you're driving at come on honey you bring your bread all right you uh you see Mary I'm just trying to show you and Mike where the costs come from wait a minute you mean that when I buy a baby buggy I have to pay some to the guys who own the tools the factory and the guys who work there more than that tools have to be replaced they wear out they have to be kept in shape other words a statement from this Factory might read something like this we received from our customers well unless we do we're not in business there'll be no jobs no dividends so that's all you have to work with then comes the cost of doing business first is the cost of goods and services bought from others coal to heat the plant electricity advertising a lot of things then the cost of tools wearing out now most of the machines in this plan are new but we've got to set aside enough to replace them when they wear out then taxes local taxes federal taxes all the direct taxes this doesn't include taxes that the government will make us withhold from wages but all Corporation taxes must be paid and then comes the cost of human energy wages Insurance retirement social security and so on and last the return to those who provide the tools the stockholders very simple you take in so much money from your customers and you divide it up so much for what you buy outside so much for the tools you use up and wear out so much for taxes so much for employees wages and benefits and so much for the use of the tools well I think I can understand that but you still didn't explain what explain what how you're going to get the cost of the buggy down so I'll buy it look Mary today the cost of government is an important factor in any business what the government says you pay in taxes you pay right I'll say all right take the next cost you can try to be a good buyer but you have to pay just about so much for a ton of coal and electric light and don't forget these materials and services bought outside contain these same five costs taxes wages and so on you can't expect those guys to work for nothing they've got to pay taxes too that's right okay going on you have to maintain tools you have to replace them if they're out of whack or out of date so what do you got to work with well you got the wages and benefits for the workers and what you pay the owners the stockholders that's right now in order for you to buy that buggy at a lower price which of the five costs would you cut the wages to the workers or the payments to the owners can you reduce the taxes can you pay less for what you buy outside do you have to maintain tools well I wouldn't cut wages well you've got cost which one would you cut maybe the store is the price marked up too high could be but they'd have to be competitive they'd be forced to come down why you think so let's say the markup is competitive the factory is tooled up right and everything is right but still the costs make the price too high now that's a tough question remember the different points of view well boys we have to figure a way to cut our costs now Where Do We Begin take the stockholder if some some of my savings are in this thing I'm going to get paid or else why shouldn't I I supplied the tools without me there wouldn't be any Factory speaking as a worker I don't care where else you cut but you're not going to cut wages you're not going to monkey with benefits either get that straight right now you put me on a tough spot as management I've got five costs if I can't cut any of them how am I going to cut the price of that buggy let's not forget the customer not you Mary well I still think the price you're asking for the Little Giant buggy is too high I want a buggy for my baby but I don't have to buy it from your company not so long as you have a free choice and I have a free choice that's right we're all each other's customers Mary what do you think would happen to any business in this country if people weren't willing and able to buy what they produce well I suppose they go broke happens all the time but what do you think the answer is well I I don't know but this much I'll tell you I'm not going to pay that much for my buggy okay you're the boss all right while they're talking let's ask the audience here they are the five costs of producing any goods or services if it were up to you how would you get the price down on that buggy to give Mary what she wants at a price she's willing to pay let's talk about these five costs what they are and what we can do about let's face it right [Music] now