In the end, it is always the fault of owners, and the management they select. As long as 'good' executives are defined by how clever they are in protecting and maximizing their own compensation instead of focusing on how the company does business, not much good can come from them. Financial trickery is not business.
Nissan fell into the same fat and lazy stagnant doldrums. They were losing money hand over fist and on the verge of bankrupcy. One man, Carlos Ghosn, turned it around quickly. They made more money last year than all the profit Renault and Nissan combined made in the last 10 years. It was done with common sense and good business practices, not financial trickery or sleight of hand. But, it wasn't easy because everyone (white and blue collar) had to suffer equally, for awhile. Unfortunately, I'm not optimistic about any similar common sense turnaround for GM or Ford. The U.S. union-management culture of negotiation is more confrontational and based on one side winning instead of the company (which employs
both sides) winning. Who is going to change that culture? Can't see any candidates.
On to the airlines... Wow, who in their right mind would even
want to run an airline?
The industry is a minefield - always has been and will probably always will be. My inelegant opinion of the industry is twofold; there are too many major US carriers for such a mature industry, and too few options to differentiate 'brands.'
You can't cut price just to garner a few more passengers because we all know (or should) that a 5% cut in price does not yield a 5% reduction in profit - it's far more. There are just too many airlines who can get you where you want to go, so only a few things are available to be altered, mainly the image and service that customers experience to build some loyalty.
I used to be a heavy traveler, but I avoid it all costs now in the U.S. My anecdotal experience in heavy international travel is skewed toward staying away from Delta, Northwest and United. My reason is simple: I can travel on other airlines without having to
endure the cabin staff.
[rant]You want to help Delta? Get rid of the fat, surly, rude, obnoxious, lazy, arrogant, "get it yourself" flight attendants on international routes. I avoid Delta like the plague, United like AIDS and Northwest like AIDS with the plague.
I need to get up and walk around sometimes on a 11-hour flight. I'm an ideal passenger and customer - I ask for nothing special, I don't expect a lot, I don't complain or annoy people around me, or behind me. If I walk to the galley and ask for a glass of water politely, I don't expect to be growled at, have an attendant roll their eyes at me, throw down their cards from their card game and sigh, or even be told to "get it yourself..."
Call me old-fashioned, but I'll stay away from that airline after a few times of that. I get better service, with a smile, on Air India, Thai Air, JAL, Singapore Airlines... maybe US airlines should start outsourcing cabin staff. [/rant]
On to Japanese cars. By the way, lazs, I know you get a thrill from trying to spin people up by using words like "jap" and "colored people" and "wetback" etc., but aren't you old enough now to have outgrown it? You're in your 50s now... It would be interesting to hear you say it in front of a sumo wrestler one day. You'd be wimpering like a little girl after he squished you like a bug.
Anyway, let me learn you a little about 'dumping' there, hot rod.
Tariffs are political tools to prevent competition and get votes for the politician. The problem with tariffs, is that they work both ways. So, one country tries to protect an industry from foreign boogey man competition, but another industry gets hurt by tariffs placed as reprisal. The overall result is little effect on either economy, contrary to what the politicians will tell you.
Some companies do sell below cost, but only because they screwed up and made too much or many, or need to cut inventories and raise some cheap cash. There is no shortage of cheap financing money available in Japan though, so they were not dumping.
We have this thing called 'overhead' in business. There are two basic types, so you should be able to keep up with this. One is fixed and the other is variable. Fixed overhead is, well, fixed expenses, meaning they don't change, regardless of how many widgets you make, which is the definition of 'fixed.'
Variable overhead 'varies' with how many widgets you make. Both of these are plugged into the cost column of a widget. Now, this is going to get complicated here, but you can print it out and carry it around in your shirt pocket this week.
Dumb companies add up the costs (which are usually inflated by all departments when asked to tally their costs), add a profit, and use that as their price. Smart companies look at the market price, then try to find a way to maximize profit or market share by continually assessing and modifying their costs, product line, marketing or other really, really technical thingies. Once a company is
assured of meeting fixed overhead through orders and sales for the period in question, fixed overhead does not have to be considered anymore. It's already paid, so why are we adding to our price, when it isn't costing us anything anymore?
You can sell more of your widgets by selling them for less, make
more profit than you had planned on by reduced costs from larger raw material purchases, increase efficiency of your widget production line, increase market share, and create inventory that will only cost more to make later - and maybe sell that at a market price that includes the fixed overhead, which is now even
more profit, since we have already paid our fixed overhead for the period. It's
Friggin' Huge profit.
We call this 'incremental sales.' It's business we never would have had that allows us (and our suppliers) to hire more people, create more earnings to reinvest, puts smiles on our faces, and frowns on the faces of dumb companies. It is not losing money, or selling below cost, or dumping.
Sheesh, I can't imagine how Seagoon must feel typing several posts like this every day.
