CFI2766
Well-known member
- Joined
- Dec 11, 2005
- Posts
- 1,293
Fuel economy and formerly extremely high profit margin SUVs and trucks aren't the reason that the Big 3 are in trouble.
Their cost structures, of which they all three agree labor is but a small part, are too high. Vastly simplified, to maintain any profit, they are forced to produce far more inventory than they can realistically sell in these economic conditions. Also, there are significant, expensive barriers to the American automakers decreasing their production capacity.
On the flip side, had the domestic automakers decided to structure themselves to weather the current conditions as has been suggested by folks from CNN (and FOX, btw) to Capitol Hill (ironic misspelling on purpose), they would not have been able to achieve the profits that they had during the relatively good economic times. Food for thought, but smaller automakers will hire and provide jobs for fewer people, regardless of whether the economy is either weak or strong.
For review, selling a product that the customers want, i.e. Expeditions, Hummers, Mustangs, Vipers, and Corvettes, yet still achieving a profit, has never caused a company to go bankrupt. However, still selling products, with no profit, that the customers don't want, is a quick way to go out of business. This is why you will not have hourly 777 service from MCN, unless of course the incoming administration decides to subsidize said service.
Jeez, watch something other than Olberman or the Rachael Maddow show every once in a while, would ya?
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Their cost structures, of which they all three agree labor is but a small part, are too high. Vastly simplified, to maintain any profit, they are forced to produce far more inventory than they can realistically sell in these economic conditions. Also, there are significant, expensive barriers to the American automakers decreasing their production capacity.
On the flip side, had the domestic automakers decided to structure themselves to weather the current conditions as has been suggested by folks from CNN (and FOX, btw) to Capitol Hill (ironic misspelling on purpose), they would not have been able to achieve the profits that they had during the relatively good economic times. Food for thought, but smaller automakers will hire and provide jobs for fewer people, regardless of whether the economy is either weak or strong.
For review, selling a product that the customers want, i.e. Expeditions, Hummers, Mustangs, Vipers, and Corvettes, yet still achieving a profit, has never caused a company to go bankrupt. However, still selling products, with no profit, that the customers don't want, is a quick way to go out of business. This is why you will not have hourly 777 service from MCN, unless of course the incoming administration decides to subsidize said service.
Jeez, watch something other than Olberman or the Rachael Maddow show every once in a while, would ya?
Big
