Daimler redux

From: Gary Ludwick (gludwick@csi.com)
Date: Tue Sep 22 1998 - 18:00:01 EDT


You wrote:
>>I agree that the government would make me happier if they would stay out
of a
lot of my business. But, when it comes to giant corporations that directly
and non directly involve the lives of thousands of families, and if that
corporation is about to charter on terms that may or maynot be in the best
interest of those families, then I believe that it is the resposability of
the
Government to step in with the intent of protecting the welfare and standard
of living of those families. <<

Government stay out of my life EXCEPT when it's my ox being gored. I think
all you can really count on is "life, liberty and the pursuit of
happiness"...not a guaranteed job and government maintained standard of
living.

>> Again, does anyone honestly believe that Gov.
would have allowed anytwo of the big three to merge? I dont believe that
they
would have. <<

Chrysler wouldn't have Jeep, Eagle/AMC (not to mention Dodge) if the
government didn't allow takeovers. And I'll bet the workers in Kenosha had
exactly the same concerns as you do now.

>>This country was built on the auto industry. It was once what is
good for GM is good for the country. <<

And GM abused that philosophy so thoroughly with their "here's our junk,
take it or leave it" attitude that they made the foreign car invasion a
certainty...If it weren't for that captive audience mentality of the 50,
60's and 70's, we wouldn't be having this discussion right now. The big 3's
utter disregard for its customers (and quality) made Daimler what it is
today.

>>Now on the other hand Im sure the response will be, yeah but this is the
New
Millenium, and your right. The world is getting smaller and we are all
going
to be united as one big family of people. Great. Its gonna take me a while
to get use to it and I probably wont like it!! <<

Unfortunately, it's a fact of commerce. Some guy sneezes in Japan, and
watch our stock market dance.

>> Jurgen Schremmp layed off more than 40,000
people from Daimler-Benz just under 10 years ago. He cuts off any part of
the
company that isnt making a profit. <<

And Chrysler screwed lots of workers for years during the comeback days of
Chairman Lee. When it was economize or die, everybody was a part of the
"team". But somehow, once the profits started rolling in, it back to "you
guys" and "us guys". Point is, shareholders DEMAND profits (and rightfully
so). It's management's job to deliver them any way they can. And in my
opinion, DB is much better at taking the long term view than any of the
quarterly profit driven "Big 3".

>> Get this,
for every Grand Cherokee we sell, we profit (after tax and laybor wages)
just
over $11,000 PER VEHICLE!! And that is what Daimler Benz has been missing
all
these years.<<

Almost as obscene as Big Bob's salary and stock profit on this deal. 20
years ago, almost every American could afford a new car every 3 years....and
they were priced so that the average guy could pay for one in 3 years. Now
it takes us 5,6 or 7 years to afford to pay off a new car. Gee, do you get
the impression that manufacturer's have been increasing their profits at a
much faster rate than wages have risen?! By my calculations, an $11,000
profit on a Jeep is about a 50% profit on actual costs. ($20,000 to make,
$31,000 to the dealer). Pretty steep markup in this day and time...but I
don't blame management for getting it if they can.
 I remember a few years back - when the Japanese were really cutting the big
3's throat - the Yen took a major dip and their cars got much more expensive
overnight. Did the Big 3 take advantage of this? Hell no! They RAISED
their prices to increase their profits, instead of making their cars more
price-attractive in the marketplace! Very hard to cozy up to that kind of
screw-the-customer mentality.

Believe me, this reply was not meant as a put down, or to minimize your
concerns. They're certainly real and valid to you. But as an old drill
sergeant of mine used to say, " Worrying about things over which you have no
control is a waste of time and energy." From a consumer's perspective, I
figure in the long run, it's a good move, win/win for everybody. Maybe they
can show you how to make money on cars, and you can show them how to make
50% markups on trucks! Hmmm?

Good luck!

Gary

The Internet - Living proof that 10,000 monkeys in a room with 10,000
typewriters will NOT
eventually duplicate the works of Shakespeare!



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