Re: Looking at the new pick trucks.

Posted by oldtanker on June 21, 2019 at 08:46:12 from (66.228.255.203):

In Reply to: Looking at the new pick trucks. posted by Brent Zappe on June 21, 2019 at 06:46:52:

Boy a lot of topics to cover.

I was looking at the pricing on new trucks lately and saw what I expected in pricing. Pickups have morphed from a utility work vehicle to nice rides that are comfortable to drive coast to coast. The average income of a new truck buyer is 80K or higher. And yea, 700-800 a month is the new normal for them. And most are sold, not leased. These same buyers have house payments north of 3K a month and guess what? Because of life style choices they live paycheck to paycheck! It's how the other half lives. Now just cause you don't live live that doesn't mean you don't make that kinda money. Just means you don't live like that. It's all about life choices.

Now people love to blame the companies and such for inflation. Nope. Not at all. Most companies shoot for 5-7% net profit. They have a for a very long time because that's what seems to work. That means that anything that effect operating costs effects that 5-7%. Labor, raw materials/merchandise R&D and taxes (local, state and fed) all effect that profit margin. Now I know, you guys are thinking that they can do with less than 5%. This is a tractor forum! So look what happened to IH with them shooting for about a 2% margin when times got hard? When the bottom drops out 2% leaves a company borrowing for raw materials/merchandise. That is never a good thing. Chrysler in the Carter/Reagan recession was having to borrow. Then in the last one both Chrysler and GM were borrowing just to buy materials to build cars and trucks and had to be bailed out. IH was borrowing the last couple of years before it failed.

Now as far as inflation? Wages are the biggest thing followed by taxes. Look at it this way. WalMart has over 2 million employees. For the sake of simplicity lets say at any one time 1 million are on the clock. 365 days a year. That's 365,000,000 man hours x 24. Now lets give em all a well deserved 2 buck an hour raise! Prior to the raise payroll was say 13.00 on average. so 13X365,000,000x24=113,880,000,000 now tack on that measly 2 bucks an hour. 113,880,000,000+17,520,000,000. Yea that extra 17 BILLION 880 MILLION payroll expense gets added to prices to reflect the extra operating costs. So the guys down at Green Giant demand higher wages to compensate for having to pay more in WalMart. So Green Giant raises prices accordingly so that the guys at the GM plant have to pay more for groceries. And then lets not forget city, state and federal minimum wage hikes. Or new taxes/tariffs.

Remember, when politicians and the news media are playing with numbers that numbers can be deceiving. 2 bucks an hour don't sound like much. But 2X8X52X however many employees. That adds up quick. For a company like WalMart it's in the BILLIONS of DOLLARS a year.

Rick

Just saying.....

Rick

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