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Thread: Costco and the disturbing philosophy of the business class

  1. #26

    Never mind me, I'm just ranting, confused, worried.

    Why will ford or GM even exist when we can buy a Chinese car. US makers can't compete on quality, price, or unique image/style. GM should just get it over with, declare bankruptcy and liquidate the company, spinning off the few valuable parts (pickup trucks, Corvettes, etc.)
    Yes, I've been b*tching about this with my brother. For years millions of Americans could have been saving hard earned cash on repairs and another new car. If only the market were able to really play itself out instead of the government ( lobbyist) placing protectionist quotas on vehicles from superior Asian producers and in the process"making it possible for the sheltered American automakers to raise prices and limit production." Their product would have wiped out the American competition much sooner. Not that I'm happy about my country not putting out a competitive product or putting people out of work and essentially destroying their lives It just seems in more ways than not, our economy has some learning to do and some hard knocks to go through. The days of the U.S. forcing countries to keep prices artificially high on a wide range of necessary products (e.g. semiconductors) thus impeding competition, are waning if not gone. There's always the exceptional election year promise to an "important" congressional district which happens to have the crosshairs of foreign imports aimed right at its manufacturing bases. There are some scary issues to deal with for future generations of the Western Hemisphere. Shouldn't the people that produce the most reliable products have the most purchasing power?

  2. #27
    Member CosmicMojo's avatar
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    Quote Originally posted by DetroitPlanner
    In fact it was only up to about 5 years ago that Ford (the company) stopped tilling the fields down the street from me, and instead decided to grow an office park instead of soybeans.
    They were probably getting some giant farm subsidy as long as they kept that field in soy.

  3. #28
    Quote Originally posted by DetroitPlanner
    And how did he afford to sell millions of them for such a cheap price? it was because of a growing middle class that was fueld by a $5 work day. When the auto companies started to offer $5 a day, everyone else in lucrative sales had to do the same.
    I think you're confused about the reasons Ford hiked wages when he did. It wasn't out of altruism because he felt Americans deserved to be better paid. Ford can't afford to pay people higher than their productivity, it would cause the company to go out of business.

    What happened is that the invention of the assembly lines made Ford's industrial process the most productive in the automobile sector, and that allowed him to expand production and cut prices considerably. That created a shortage of skilled labor, and having a lot of highly skilled and motivated workmen on the assembly line made it all even more productive, so Ford hiked wages to ensure that he could always have his picks of the best employees in the market. In order to compete for these employees, other businesses had to follow suit.

    It's nonsense for Walmart to do the same. Hiking wages won't make its employees more productive. Suppose that through some bizarre fluke Walmart's employees spent their entire pay raise at Walmart. That means that Walmart would have to provide them for a whole lot of goods that the employees have not produced! It is therefore detrimental for Walmart to do so.

  4. #29
    Cyburbian
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    Quote Originally posted by DetroitPlanner
    My point? Japanese manufacturers are no longer able to make money here, we will lose these jobs to Korea and India as well. Until we stop looking to fill our houses with lots of cheap crap we don't need and start buying stuff that actually recirculates money in our economy, we will continue to lose jobs, and have a increasinlgky harder time making if fron one pay check to the next.
    Exactly DetroitPlanner. And I think countries like Germany do much better than we in the states. We need to keep some mfg. base. I think some similarities to England prior to the war, losing a lot of mfg.

    Now BKM, as far as Hyundai they are JUNK! Not comparable to any Buick IMO and I'm not a huge Buick fan. The only thing I think they rate fairly decent in is initial quality, but who cares what that is when its gonna be crap tomorrow??? I don't buy it. As to paraphrase a Tommy Boy line, you can take a crap in a box and stamped it guaranteed, but in the end you still have a peice of crap. I think Hyundai still fits in that category, IMO. Now what the Chinese are doing might be different, I don't know. Didn't a Chinese firm recently purchase or purchase the rights to produce Land Rovers?

  5. #30

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    The Market Will Ultimately Decide....

    Interesting piece in the weekend's Rocky Mountain News on Costco. My short take: Costco's eating Sam's lunch because its customers are seeking a higher level of service and Costco is doing that by attracting and retaining a quality workforce by [gasp!] compensating them.


    [URL="http://www.rockymountainnews.com/drmn/other_business/article/0,2777,DRMN_23916_4514362,00.html"]

  6. #31
    Cyburbian DetroitPlanner's avatar
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    Quote Originally posted by Vlaude
    Exactly DetroitPlanner. And I think countries like Germany do much better than we in the states. We need to keep some mfg. base. I think some similarities to England prior to the war, losing a lot of mfg.

    Didn't a Chinese firm recently purchase or purchase the rights to produce Land Rovers?
    Germany is not exactly a hotbed of innovation. Dieter was sent back to head DC from Detroit because the German DC brands (Mercedes, Maybach) have gone down the toilet and got fat off of Chrylser Group. Dieter will need to shave about 10,000 jobs from Germany in order to save those brands.

    Land Rover is owned lock stock and barrel by Ford Motor Company.

    Miles, thanks for the good news and bringing this thread back. Quality and service beats cheap every time.
    We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805

  7. #32
    Cyburbian
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    Sorry, not Land Rover... But MG Rover, was purchased. Land and Jag are under Ford. My point in regards to Germany and similar countries is the mfg base and specifically their willingness to pay the premium to buy domestic and quality items. I think there are quality autos made in the U.S. A lot to do with perception too, like the reliability of Opels (GM) vs BMW... My point is there are places where there is not a race to the bottom, yet more of a standard on where to be...

  8. #33
    Cyburbian DetroitPlanner's avatar
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    Quote Originally posted by Vlaude
    My point is there are places where there is not a race to the bottom, yet more of a standard on where to be...
    Amen brother, we need to stop racing to the bottom.
    We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805

  9. #34
    Quote Originally posted by jaws
    There's a reason why Costco is a lot smaller than Walmart in market share, and it's unsurprisingly the same reason that investors are complaining.
    Well, Wal-Mart and CostCo are apples and oranges, but CostCo is larger than Sam's Club (the "wholesale club" that Wal-Mart owns).

    Of course CostCo and Sam's Club operate in different markets, and I'm sure you'd find that the average CostCo shopper is far more affluent. I think Sam's Club stores are, like Wal-Marts, concentrated in the rural South and extending outward into coastal and urban areas, while CostCos are primarily found in well-off suburbs.

  10. #35
    Cyburbian
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    Out of curiosity, I have been in a Sams store a few times, how does Costco compare in product lines? Do they sell similar items? A family friend that lives in the are claims Costco is a lot better than Sams, she thinks they have better products. That said I have no idea what she is buying there. Every day groceries in bulk??? What are the membership fees?

  11. #36

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    Well, jaws, Wall Street is not necessarily right about real economic trends. It's mostly a casino anyway. Wall Street analysts thought Enron was the greatest thing since sliced bread,a fter all.

    Is Wal-Mart really beating Costco so handily? Some are not so sure. Maybe lowest common denominator doesn't always work? http://www.dailykos.com/story/2006/3/6/82448/12381

  12. #37
    Quote Originally posted by BKM
    Well, jaws, Wall Street is not necessarily right about real economic trends. It's mostly a casino anyway. Wall Street analysts thought Enron was the greatest thing since sliced bread,a fter all.
    Most Wall Street analysts are in the business of milking investors for commissions and colluding with the government to rip off the savings of regular people. However when their money is on the line, you can count on them to complain.
    Is Wal-Mart really beating Costco so handily? Some are not so sure. Maybe lowest common denominator doesn't always work? http://www.dailykos.com/story/2006/3/6/82448/12381
    Wal-Mart is the biggest company in the world. Clear answer: yes.

  13. #38
         
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    Quote Originally posted by Vlaude
    Out of curiosity, I have been in a Sams store a few times, how does Costco compare in product lines? Do they sell similar items? A family friend that lives in the are claims Costco is a lot better than Sams, she thinks they have better products. That said I have no idea what she is buying there. Every day groceries in bulk??? What are the membership fees?
    Costco's products are of higher quality. Some organic foods, generally a very nice wine selection, good quality clothing (Dockers, Ralph Lauren, Tommy Hilfiger, etc.), cheap salmon, etc.. In my opinion, the service is very good (I spent less than 10 minutes waiting to get checked out two days before Christmas, and the clerk helped me box my groceries to boot). The membership is (I think) $45.

  14. #39

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    Quote Originally posted by jaws
    Wal-Mart is the biggest company in the world. Clear answer: yes.
    Then General Motors, by your simplistic definition, must be handily beating Toyota?

  15. #40
    Member CosmicMojo's avatar
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    We're getting into apples and oranges territory when we jump between Sam's Club and Walmart.

    Yes, Wal-mart is #1 on the Fortune 500 list.

    But the Sams Club division of walmart sales are not as high as Costco.

    Just heard this great story on NPR about Hank Williams III being mad that someone (missed that part) authorized releasing his album without 3 songs because Walmart didn't like the cuss words. He'd already been asked to do a special Walmart version and he said no, but someone (record company?) did it without his approval. He was quoted saying, "well sure, Walmart's where I'd go for trash bags or dog food, but not music." Dang he was funny (managed to get the words trash and dog in the same sentence as Walmart). Love Three, he kicks butt. He's a little bit country and a little bit thrasher punk rock, thrillbilly.

  16. #41
    Cyburbian ludes98's avatar
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    Quote Originally posted by BKM
    Is Wal-Mart really beating Costco so handily? Some are not so sure. Maybe lowest common denominator doesn't always work? http://www.dailykos.com/story/2006/3/6/82448/12381
    The other way around. Coscto averages 121 million per warehouse in sales annually while Sam's Cub only manages 70 million per warehouse annually.

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