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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (288858)	5/25/2006 3:20:00 AM
From: tejek	Read Replies (5) \| Respond to of 1572033

But if that 20 year thesis is correct, why has Toyota usually outdone the American companies economically? In fact, its stock has consistently outperformed GM's and has mostly outperformed Ford's over the past ten years." I can't really defend their design decisions, but the American mfg's have retirement obligations that add $1100, $1400 and $1500 per vehicle respectively for each Chrysler, Ford and GM car. The non-union American employess of the Asian mfg's don't have defined benefit pension plans - only 401k's like all other modern companies. So, it's not simply bad design and management. Where are you getting those numbers? In all the time I have half heartedly followed this mess, I have never seen anyone put an exact number figure on health benefits. However, let me put it this way: Here are Gross Margins and Operating Margins for all three companies: F: GM=11.8; OM=-1.78; GM: GM= 10.59; OM= -7.07; TM: GM=19.45; OM=8.93 Industry average: GM= 15.51; OM= 7.58 Okay, health/retirement costs would be taken off Gross Margins as an employee expense, assuming they are being paid at all. That may explain why GM's and F's GMs are much smaller than the industry average and significantly smaller than TM's. The next level down from GMs are operating margins which measure overhead expenses. F's GM drops nearly 14 pts to its OM; GM's drops nearly 14 pts as well. Meanwhile TM's drops 10 pts and the industry average drops only 8 pts. That suggests that overhead costs are much smaller at TM and for the industry average. Trust me, its not just health costs that are screwing up GM and F. And it doesn't help that they consistently have had unappealing cars that breakdown a lot [until recently].