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Automotive News & Views Inside Line Article Comments Article Comments: Perception Is Reality
149 messages, Last post on Feb 12, 2007 at 1:54 PM
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Article comments for Perception Is Reality - Witness the tale of two companies — Toyota and General Motors. Despite recalls and public relations woes, Toyota's image of bulletproof quality persists, and sales and market share rise. Despite concrete evidence to the contrary, GM's reputation for inferior quality remains, while sales and market share decline. (more)
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Replying to: rockylee (Dec 22, 2006 11:54 pm) What is going to be the determining factor of the market value ? If I quit my current job I can get a new job in the same area making ~%90 of my current pay. I am close to "Local Market Value" I could move to a bigger city and make more but the additional money would be absorbed by the increase in the cost of living. If a certain job pays $10.00/hour and nobody is willing to do the job for that price the market value will go up. But if 50 people are willing do do the job for that price the market value will go down. Organizing a Union allows them to increase wages (a strike or threat of) but it has not increased the market value. If a union employee is making $25/hour and 50 unemployed folks are willing and able to do that job for $15/hour then $15 is the market value. But the company can't terminate the union employee and hire at market value. That sounds like extortion to me. The threat of organizing a non-union plant often increases the blue collars market value It increases the wages, not the market value. That is the problem. Does the "market value" include foreign labor like somebody in china making $0.40 an hour ??? Yes, but with oversea manufacturing you have to factor in tariffs, the cost of building a new plant, shipping back to the US. However does managements usage of the facility's decrease that number off the hourly ? No it increases the number. Management is probably considered an overhead expense. Example: I work for company X. Our skilled labor cost ~$30.00 hour. Add in benefits and it becomes. $42.00 We have a fleet of vehicles for our labor that adds $6.00/hour = $48.00. We use material to maintain equipment that adds $5.00/hour = $53.00. We have buildings for our labor that adds $2.00/hour = $55.00. Add in the accountants, lawyers, managers, human resources, IT, telecomm, etc. And the final wage comes to ~$85.00/hour. Everyone working for a company that is not actually making product is an overhead expense. Accountants, lawyers, managers, human resources, IT, telecomm are not making products but they are needed to run the business. So you can add one employee and your overhead may go down, but add 10 employees and you may need more building space, another manager, an extra accountant etc. White collar workers in lower-middle management would also lose some pay and benefits to adjust to the market. Yes, and overhead expenses would also go down. Then GM could build a Tahoe using better material for the same price and possibly compete with the Asians.
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Replying to: k2j (Dec 23, 2006 5:52 am) We only impose tariffs on steel in this country. pretty much everything else is "free" or should I say exempt of tariffs.  Rocky |
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Replying to: phinneas519 (Sep 24, 2006 3:45 pm) The non-dealer has to set the low price to compete with the heavily discounted new car price. Otherwise why would anyone buy a used car? |
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