For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
ohh no! Where will I go now to get a shiatsu foot massager?
Is it my imagination or most of the stores going belly up these days are the "non-essential" stuff, basically 75% of the crap you see in a shopping mall. The whole premise of a mall is the "ambience". All the pretty interior designing is suppose to make shopping a pleasurable experience.
I think in a post PO world consumers will barely have enough to buy the goods they want let alone the interior designing. Shopping malls will become a thing of the past.
Because retailers rely on a broad network of suppliers, their bankruptcies are rippling across the economy. The cash-short chains are leaving behind tens of millions of dollars in unpaid bills to shipping companies, furniture manufacturers, mall owners and advertising agencies. Many are unlikely to be paid in full, spreading the economic pain.
When it filed for bankruptcy, Sharper Image owed $6.6 million to United Parcel Service. The furniture chain Levitz owed Sealy $1.4 million.
And it is not just large companies that are absorbing the losses. When Domain, the furniture retailer, filed for bankruptcy, it owed On Time Express, a 90-employee transportation and logistics company in Tempe, Ariz., about $30,000.
Last edited by cube on Mon Jun 02, 2008 2:09 pm; edited 1 time in total
Posted: Mon Jun 02, 2008 2:06 pm Post subject: Re: Let the layoffs begin
LoneSnark wrote:
Hmm, 'bursting of the housing bubble' has made my dollars worth more; I can buy 20% more house today than in 2006 with the same dollars. Looks like deflation to me, as the same dollar is now backed by more house, which last I checked was real value.
Does it really need saying? Adam Smith proved over 200 years ago that metals such as gold and silver have no more intrinsic value than anything else people want that is scarce. If you bought gold in 1980 then you had to watch as more and more money was created, inflation drove up the price of everything, but not the value of your gold, which collapsed from over $840/oz in 1980 to $260/oz in 2000.
Quite. We misunderstand value, since there is intrinsic value and extrinsic value. Market value is a combination of them both. Gold is valuable for it's uses, but it is not as valuable in large nation as a currency since there is not enough of it. Energy is valuable intrinsically, but perhaps it is only necessarily so during times of shortage. Whatever you need that you lack is valuable.
AP GM closing 4 truck, SUV plants in North America
Tuesday June 3, 11:49 am ET
By Tom Krisher, AP Auto Writer
GM closing 4 North American truck, SUV plants, affecting 10K workers, reviews Hummer plans
WILMINGTON, Del. (AP) -- General Motors is closing four truck and SUV plants in the U.S., Canada and Mexico, affecting 10,000 workers, as surging fuel prices hasten a dramatic shift to smaller vehicles.
CEO Rick Wagoner said Tuesday before the automaker's annual meeting in Delaware the plants to be idled are in Oshawa, Ontario; Moraine, Ohio; Janesville, Wis.; and Toluca, Mexico. He also said the iconic Hummer brand will be reviewed and potentially sold or revamped.
Wagoner said the GM board has approved production of a new small Chevrolet car at a plant in Lordstown, Ohio, in mid-2010 and production of the Chevrolet Volt electric vehicle in Detroit.
Wagoner announced the moves in response to slumping sales of pickups and SUVs brought on by high oil prices. He said a market shift to smaller vehicles is permanent.
GM shares rose 25 cents, or 1.4 percent, to $17.69 in morning trading.
The cuts will affect 10,000 hourly and salaried workers. Many will be able to take openings created when 19,000 more U.S. hourly workers leave later this year through early retirement and buyout
...
Yahoo _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Posted: Fri Jun 06, 2008 2:11 am Post subject: Re: Let the layoffs begin
Quote:
50% Interest
In September, as Pee Wee's revenue fell, Petrovich and his partner, Steve Kraut, borrowed $100,000 through Community Bank of the Bay in Oakland, Petrovich said. The bank got the money from Advance Restaurant Finance, a San Mateo, California, company that specializes in loans to restaurants. Under the loan's terms, Pee Wee's had to repay $150,000 in a year, making the interest rate 50 percent. The restaurant still owes $106,000 on the loan, according to the court filing.
Such loans aren't unusual, said Brian Garrett, president and chief executive officer of Community Bank, which he said has worked with Advance for four years.
``The interest rate is a reflection of risk, and this is an industry that needs quick access to capital,'' he said. ``When a freezer breaks down, they need to get it fixed right away.'' As for the rate, he said, ``I don't hold a gun to their head.''
The loan helped, Petrovich said, though not enough. The restaurant remains open with 51 fewer items on the menu and four fewer servers than during the housing boom, said Kathy Kraut, who owns half the company with her husband, Steve.
``The ball goes down as fast as it goes up,'' Steve Kraut said.
Posted: Fri Jun 06, 2008 11:06 am Post subject: Re: Let the layoffs begin
An interesting aside to the GM shutdowns: a year or so ago I read an article describing the most profitable vehicle made by GM. I'm not sure if I remember correctly but I think it said this model generated more profit than all the other GM models combined. It's a tiny 4 cylinder station wagon made and sold in China. And it's selling like the proverbial hot cakes.
Interesting potential loop: GM sells more and more little cars in China - China requires more and more gas to fuel all these cars - oil prices rise and rise - GM can't sell it's big US vehicles - GM closes more plants in the US - GM becomes most profitable car maker - GM retirement accounts holding GM stock have tremendous growth -
GM workers take early retirement because they are going to loose their jobs anyway -
Posted: Fri Jun 06, 2008 5:07 pm Post subject: Re: Let the layoffs begin
I never understood this push to "boost sales" after laying off lots of managers. I thought the point was to be profitable at any size. Who cares what your gross sales are? Net profit is all that matters to anyone who knows Business 101.
Posted: Fri Jun 06, 2008 5:10 pm Post subject: Re: Let the layoffs begin
ROCKMAN wrote:
An interesting aside to the GM shutdowns: a year or so ago I read an article describing the most profitable vehicle made by GM. I'm not sure if I remember correctly but I think it said this model generated more profit than all the other GM models combined. It's a tiny 4 cylinder station wagon made and sold in China. And it's selling like the proverbial hot cakes.
Interesting potential loop: GM sells more and more little cars in China - China requires more and more gas to fuel all these cars - oil prices rise and rise - GM can't sell it's big US vehicles - GM closes more plants in the US - GM becomes most profitable car maker - GM retirement accounts holding GM stock have tremendous growth -
GM workers take early retirement because they are going to loose their jobs anyway -
Hmmp....who knows?
BTW, I never understood how the Trucks/SUV were so profitable for GM since 90% of the buyers never bought them for cash. Can anyone explain to me how that works?
Posted: Mon Jun 09, 2008 1:55 am Post subject: Re: Let the layoffs begin
Serial_Worrier wrote:
I never understood this push to "boost sales" after laying off lots of managers. I thought the point was to be profitable at any size. Who cares what your gross sales are? Net profit is all that matters to anyone who knows Business 101.
Size in the automotive business is a competitive necessity, not a competitive advantage. Some small boutique firms can survive by only building a few luxury, sports cars by hand, but their price tag is $250.000 and up. If you're going for mass market, you need a diversified portfolio.
Toyota may not want to compete in the N. American large truck market, but it cannot afford to give that segment up by default to their competitors. Why? Because if that segment has been profitable, while, say, they are selling their Prius line-up at a loss or next to no profit, then their competitors can use those profits to leverage their way into other line-ups.
The same reason why large car makers cannot afford to ignore the Chinese or Indian market. You either fight them in their market or eventually you fight them in your own home market.
One interesting case study on strategy and marketing is the way that Honda leveraged their success in small motor cycles to break into the N. American and European markets at a time when their competitors did not take them seriously. You might find it somewhere on the web if you try googling Harvard Business Review Honda Case Study. Otherwise you would need a subscription. Also google Porter's Five Forces Model.
Although not perfect thePorter Five Forces Modelis useful when thinking about alternative energy development and its competitiveness. Say GE's ability to compete with Vestas in the wind turbine market versus spending those resources in gas turbine technology.
Strategy is knowing what not to do, however, I feel that a sustainable competitive advantage, and therefore profits, also stems from operational excellence that I think is a function of these factors:
Quote:
Image
Reliability
Thinking with customers
Relationship
Knowledge
Price
Quality
Flexibility
Speed of execution
Speed of problem solving
Innovativeness
Resources
Source: modified from Moenaert & Robben from STEM
I think it is clear that looking at the N. American automotive market that the Big Three have been on a dead end street for quite a long time. It is going to be very hard to re-invent themselves now. With or without peak oil that is the ultimate external threat to their business model. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Jun 18, 2004 Posts: 714 Location: Western North Carolina
Posted: Mon Jun 09, 2008 2:58 pm Post subject: Re: Let the layoffs begin
Quote:
BTW, I never understood how the Trucks/SUV were so profitable for GM since 90% of the buyers never bought them for cash. Can anyone explain to me how that works?
SUV's were more profitable than cars for this reason at least. They are, or were, primarily developed from existing truck chassis. Basically they took 1/2 ton pickups and put full bodies, leather interiors, and called it a luxury car. The cost of developing these "new" product lines was miniscule compared to what it cost to develop a new line of cars. No or very little re-tooling was required to produce them in extant pickup truck assembly lines.
The other thing that made them wildly profitable was the clever marketing to soccer/security moms and insecure males. They sold them as the ultimate go anywhere, in any condition, vehicle that could "win" in any collision. People, and it always amazed me, would pay near $50k for a loaded suburban/escalade that was running on technology that a 50's mechanic would be familiar with. Studies done on these vehicles pretty conclusively proved that they were not as safe as advertised. Lack of crush zones implied that crash energy would be transferred either to the other car in the accident, or the occupants of the SUV. High center of gravity made accident avoidance a major hazard at speeds above 35mph etc.
Full frame, solid rear axle with leaf springs. Nothing complicated like independent suspension, crush zones, or advanced materials.
In fairness, the later models of family truckster did start to implement some car-like improvements, such as the re-designed Expedition and Explorer from Ford (can't remember which year they came out) with independent rear suspension systems, crush zones, etc.
So, overpriced, low tech, and built in factories that were already there and building half-ton pickups, on which the most profitable models were based.
Posted: Mon Jun 09, 2008 5:31 pm Post subject: Re: Let the layoffs begin
I hope by reading these posts that you were "ready" for this? (as ready as possible that is!) We can all learn to live on less. Thrift as an alternative lifestyle can be fun and adventurous!
My company, which two months ago was setting sales records, is now, suddenly on the edge of bankruptcy.
All mgmt are taking a 20% salary cut effective today including me. Oh boy. I guess that's better than a 100% cut, LOL.
We are a mid-sized injection molding company employing about 300 folks. We mold stuff for BMW, Mercedes Benz, Husqvarna, Electrolux, Wix and others.
Our business dropped suddenly, and of course oil prices have driven all costs of doing business through the roof.
Mass layoffs are right around the corner here methinks.[/quote]
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Is it my imagination or most of the stores going belly up these days are the "non-essential" stuff, basically 75% of the crap you see in a shopping mall. The whole premise of a mall is the "ambience". All the pretty interior designing is suppose to make shopping a pleasurable experience.
