Dear Mark,
A great analysis of a very complicated business scenario. Just for
the record, our injection molded tooling is all made in steel and the
costs are not that different than the tooling made here. This is mostly
due to the demand for quality tooling to be used in the Pacific rim
factories. The cost savings is in the labor needed for production.
Best regards,
Don Thompson
S Helper Service Inc.
Mark Kiner wrote:
>Soap box = on
>
>I have been employed by my current company for 25 years. I am involved in
>product development at the company which has about 200million a year in
>sales revenue. Each employee in the company (which is privately held) is a
>stock holder.
>
>Based on this experience I can assure you that if a group like this were to
>buy the Flyer side of Lionel we would not make decisions much better than
>they have. (if as good) Investing in tooling and materials to produce a
>product that may or may not sell is a big gamble. It is not uncommon when
>dealing with the rather fickle consumer to continuously have over 25% (or
>more) of your annual sales volume invested in inventory. Not to mention
>money tied up in capital investments.
>
>I can assure that the altruistic views of a group like this would change if
>it was YOUR money.
>
>Profits in a company are delecate. Not every company out there is an Enron
>or Worldcom. In the end getting to keep 5% of the pie Net after taxes is
>doing pretty good for most companys.
>
>And when a comany goes from 5% profit to 10% this will be loudly announced
>on the news as 100% increse in profits. We all know the math is correct, but
>John Q. average gets a vision that much different at the mention of 100%
>increase.
>
>Many were outraged when Lionel moved assembly off shore. The truth is you
>might not be able to buy anything from them at all if they didn't. Labor
>costs in this country are just getting too high for companys like this to
>exist with a global economy. Why do you think Showcase has most of their
>work done overseas? You can buy aluminum RIM injection molding tooling in
>Taiwan/China for what aluminum vacuum formed tooling costs in the U.S.
>
>I am sure this move seemed to many to be a strictly moral issue. And for
>some reason people think that decisions made for financial reasons are
>immoral. I can assure that a company who does not make frugal financial
>decisions will not have any employees to employ. So in my opinion to not be
>conservative is to risk the livelyhood of employees.
>
>Sorry,
>
>Soapbox = off
>
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>
>
>
>
>
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