Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Reschke on May 04, 2007, 08:39:44 AM
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Yesterday a single Euro cost our company $1.37 USD. Today we are sitting at $1.36 USD and its not looking like it will go any lower. I can't stand having to buy our products from Europe. We are now starting a full fledged search for North American suppliers because of the exchange rate on the Euro is killing our ability to make money.
I think part of the reason is the reluctance of the Federal Government to push interest rates out of the cellar. Until that time we will not have much foreign investment oming here to make money. Yes we get some manufacturing of automobiles and aircraft because labor costs are lower. BUT the US housing market is dead in the water and foreclosures are at an all time high..now automobile sales have begun dropping in the face of ever increasing price gouging on the fuel market, according to the report released on Bloomberg (http://www.bloomberg.com/apps/news?pid=20601101&sid=aBjYa.rRdPwY&refer=japan) the other day.
My conclusion is that we in the USA are in for a big wake up call in the next 6 months or so. I will be the first to jump in here and admit being wrong but I just don't see it from my point of view.
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If the USD is less expensive than the Euro, then US products are cheaper, right?
You're looking for less expensive US products. Wouldn't European companies like less expensive US products, too? Isn't that foreign investment? Selling more US products is a good thing, isn't it?
Increasing interest rates will make it more expensive for businesses to fund growth thereby reducing the competitive advantage over European products.
The economy is booming now at virtually full employment.
Wait... Did I miss your sarcasm?
HONK!
Gooss
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Originally posted by Gooss
If the USD is less expensive than the Euro, then US products are cheaper, right?
...The economy is booming now at virtually full employment.
Wait... Did I miss your sarcasm?
Wait a second.... wait a second...! You mean the USA still makes products?
:O
Was a the USA was the industrial leader. Now we're a third rate has been for Liberal imports of products that do not last, or are of poor quality.
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even with the lower dollar, china junk is cheaper
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With the low value of the USD its cheaper for us to buy your goods so we can buy more american stuff, and we export less over to your end of the pond. That is the theory atleast, but we have to wait for the numbers to come in as many other factors also are at play.
If the USD continue to fall we may see alot less US tourists this summer and we do get alot of them normally. Its expensive to be a toursit here, but it does not usually affect the wealthy tourists and in some cases even more decide to travel here just _bacause_ it costs alot.
And for the record... we dont use the euro here
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So what US produced product were you not willing to buy before the Euro went up?
If you have a US based business, why don't you already know who produced the items in the US that you need in your business? Didn't you bother to look around before you sent money overseas? If you want to complain about outsourcing and having to spend money overseas to provide for your company, why didn't you start looking locally to begin with?
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now automobile sales have begun dropping in the face of ever increasing price gouging on the fuel market,
Actually domestic sales are dropping because other companies make better cars and domestic cars are overpriced in order to pay the overinflated wages of the UAW's. The UAW is the single largest source for GM woes. The UAW alleges that they are trying to protect the auto worker when, in the end, the UAW will be/is responsible for nothing but job loss and the demise of the American auto industry's power. The text book example of how a union is bad for the economy and business.
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As has been shown many times here, UAW wages are not much different form what Honda and Toyo pay in their US plants. In two of Toyos plants they are essentially the same.
The legacy costs of retirement and healthcare for retirees is what really makes the huge difference between US auto makers. Are you in favor of termintating benefits for people that gave 25+ years to those companies?
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Originally posted by Maverick
So what US produced product were you not willing to buy before the Euro went up?
If you have a US based business, why don't you already know who produced the items in the US that you need in your business? Didn't you bother to look around before you sent money overseas? If you want to complain about outsourcing and having to spend money overseas to provide for your company, why didn't you start looking locally to begin with?
Was this meant for me?
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only money (http://www.theoaklandpress.com/stories/050407/bus_2007050492.shtml)
A billion here a billion there, pretty soon it adds up to real money
shamus
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Originally posted by Nilsen
Was this meant for me?
Nope, not everything is about you, fishu, baghdad bob / gscholz / viking or even a few other characters that lurk here. :p
It was a question meant for the person who started the thread.
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Originally posted by Maverick
Nope, not everything is about you, fishu, baghdad bob / gscholz / viking or even a few other characters that lurk here. :p
Ok.. your post was below mine, but seemed kinda odd, so i wondered if you were asking me these questions. :)
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I wasn't aware that you had a US based business.
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Originally posted by Shamus
only money (http://www.theoaklandpress.com/stories/050407/bus_2007050492.shtml)
A billion here a billion there, pretty soon it adds up to real money
shamus
Indeed it does. Does anyone think that the contractual agreement over 20+ years that promised retiree healthcare should be broken? In other words, should they have their healtcare taken from them?
The basic problem is that healthcare has gotten incredibly expensive. Mostly for reasons beyond the control of the retired workers.
Here are some other key quotes from that article.
....Advertisement
Fritz Henderson, GM's chief financial officer, announced the $1 billion payment to the company's special health care trust Thursday as he outlined GM's financial results for the first quarter. The payment was made Monday and was one of three mandated by a special agreement the company negotiated with the United Auto Workers in 2005, he said.
GM's pension funds, which are separate from the health care fund, earned $300 million in the first quarter and remain overfunded, Henderson said. The financing of the health care trust and pension fund is critical to thousands of GM retirees in Oakland County....
....Net income from GM's global automotive operations, however, totaled $304 million on an adjusted basis in the first quarter of 2007. That compares with just $40 million in the first quarter of 2006, Henderson said.
GM generated adjusted automotive operating cash flow of $300 million for the first quarter of 2007, an improvement of $1.5 billion year on year, with all four regions reporting improvement.
Seems like GM is still managing to make money with their cars.
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GM used to make more profit financing cars than manufacturing them. I never understood why they sold controlling interest in GMAC.
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Originally posted by Mickey1992
GM used to make more profit financing cars than manufacturing them. I never understood why they sold controlling interest in GMAC.
Because they wanted to avoid the disaster that is coming when all the sub prime mortgages default.
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Buy Chinese products, as they are cheap.
The Housing bubble in the States seems to be bursting quiet nicely.
Vacation in the States. I suppose all the Europeans that can afford to vacation in the States this year might offset the tourist industry loses from high fuel costs affecting American tourists in the States. Remember to tip your waitress for dismal service (low employment effects quality of service).
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Originally posted by Maverick
So what US produced product were you not willing to buy before the Euro went up?
If you have a US based business, why don't you already know who produced the items in the US that you need in your business? Didn't you bother to look around before you sent money overseas? If you want to complain about outsourcing and having to spend money overseas to provide for your company, why didn't you start looking locally to begin with?
Until late last year the company I worked for was owned by a German individual who inherited the company from his father about 20 years ago. He has now sold out to another European owned organization that has several different holdings all over the world.
Now with that out of the way...For the last several years we have been forced to purchase all our materials from Germany. Now we are actually encouraged by the new ownership to make a profit. Forgive me for not going to indepth here but some things need to stay secret in my business. HOWEVER we are still limited in that there are no companies here in the United States, Mexico or Canada that are able to produce the type of steel that we need to have for concrete pumping pipeline systems.
Yes that seems odd since for many years the US was the place to go to get pipes of any and all sizes. Now if you want good quality steel pipes to use for various products in our industry you are screwed to be honest. So this past week I have been searching high and low for small steel companies for high chromium content steel castings and low carbon steel pipes that you can harden and bend into elbows. Unfortunately it goes back to the US wage structure that killed off the steel production here in Alabama many years ago. These products don't exist locally! The only thing we are able to find are the high chromium cast products but we can not find anyone who is willing to attempt to make the outer shells they go into due to the tolerances we need on the outer shell.
Now if I wanted to do this in low quality and if I wanted to be like my competition I would go to China and make it happen. BUT with Chinese steel you never know what you are going to get.
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Sounds like a good case for Risk Management.
Talk to your banker, he will be cheaper than me.
When you make forward sales of products or expect to make sales, lock in the exchange rate and lock in your margins. Always think in margins, don't go cowboy on the situation, you will be more succesful in the long term.
If your banker will not or can not talk to you about hedging currency exposure then find someone who can, there are plenty of us out there.
(Risk Management Consultants)
Hey you wana play, you gotta pay !
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GM also makes a very large portion of its profit from home loans and refinance. The market is slow right now.
lazs
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Originally posted by Gooss
If the USD is less expensive than the Euro, then US products are cheaper, right?
You're looking for less expensive US products. Wouldn't European companies like less expensive US products, too? Isn't that foreign investment? Selling more US products is a good thing, isn't it?
Increasing interest rates will make it more expensive for businesses to fund growth thereby reducing the competitive advantage over European products.
The economy is booming now at virtually full employment.
Wait... Did I miss your sarcasm?
HONK!
Gooss
How dare you come into this thread with your economic knowledge. THE OUTRAGE!
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Originally posted by Gooss
If the USD is less expensive than the Euro, then US products are cheaper, right?
You're looking for less expensive US products. Wouldn't European companies like less expensive US products, too? Isn't that foreign investment? Selling more US products is a good thing, isn't it?
Increasing interest rates will make it more expensive for businesses to fund growth thereby reducing the competitive advantage over European products.
The economy is booming now at virtually full employment.
Wait... Did I miss your sarcasm?
HONK!
Gooss
Ahh but the employment rate is also what kills us here in Alabama. With just about every desirable employee in the Central part of the state working for an automobile manufacturer its very tough to find a welder for decent wages.
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Reschke,
My step son is a machinist working in an oil support machine shop fabricating anything and everything needed in the oil industry here in Louisiana. Some of the metals he works with are quite interesting and they work up to something like 40" diameter at times. Would you like me to ask if he has any idea where some of their more exotic material comes from?
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I will take all the help we can get. We use some pretty low carbon steel pipes that have an abrasive resistant rating after heat treatment of 65-68 HRc and the high chromium castings actually get harder the more you use them. All of this material is for pumping concrete from one point to another and needs to have a minimum working pressure of 85bar (roughly 1200psi).
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I, as an European, and a citizen of an Euro currency country, just visited the US for about a week. I found the US to be exceptionally cheap for many items of trade.
Here's my take on current affairs.
I bought a lot of clothing, about 90% of them US brands, about 5% of total worth US produced. Most of the "US Brand" clothing ("Dockers", "Tommy Hilfiger", "DKNY", etc.), was made in either South East Asia or Africa.
I also bought a bit of high tech, namely a piece of optic excellence, made in Japan. Most profitable party of that transaction was probably the state of NY, due to the 8% non-deductible sales tax.
All in all, I think most of the "American" stuff is made overseas (Asia, Africa, etc.) and only the "Brand Management" stays in the US. That is a unfortunate (for the US manucfacturing business) reality of the world, today.
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Originally posted by Reschke
Ahh but the employment rate is also what kills us here in Alabama. With just about every desirable employee in the Central part of the state working for an automobile manufacturer its very tough to find a welder for decent wages.
Depends on what you consider decent wages. As a certified welder in various types of welding I get paid a little above average. But a stick welder or mig welder in the south usually gets around $14 an hour, with a halfway decent benifits package.
Lambo
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Lambo
Most certified welders we have intereviewed over here are getting somewhere close to $30 an hour at the three big auto manufacturing plants near our shop within 3 months on the job. We typically start a welder around $15 an hour but that is just to start. If you are looking for a job and willing to relocate give me a shout since we will be hiring at least one new position later this year.
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Thx Reschke, even though I would like to move back to Alabama my wife would kill me if I mentioned relocating lol.
That is generous pay even for a certified welder. I'm surprised the automobile manufactoring places pay so much, but I can see why my last vehicle cost so much. I make $27 an hour but only then if I'm welding tubes in a boiler. Most of the plant welders (mostly mig) in my area make about $18 an hour at top pay.
Have you tried talking to some of the local welding trade schools and see if thier graduates need a job? I've seen some slick welders come out of those schools.
Lambo
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Originally posted by Reschke
I will take all the help we can get. We use some pretty low carbon steel pipes that have an abrasive resistant rating after heat treatment of 65-68 HRc and the high chromium castings actually get harder the more you use them. All of this material is for pumping concrete from one point to another and needs to have a minimum working pressure of 85bar (roughly 1200psi).
Send me a pm with what you need and I'll pass it on to the step son. Maybe he knows something that will help. Is it just the elbows that are the problem areas or is it the entirre pipe?