Posted by Jim L. in OR On 2012/8/15 18:11:34
Quote:
Owen_Dyneto wrote:
In my view Studebaker's most damaging deception to Packard was the misrepresentation of their break-even volume.
Something that today would wind up in a monumental lawsuit. From what I have heard the reason for not telling Packard their break-even point was that the Wizards of Studebaker had no idea what it was. I've read that after Packard got ahold of the books the break-even point was figured to be at 186,000 cars. Studebaker was having a sensational year if the managed to sell 86,000.
It happens. In about 1960 the furniture factory my dad worked for gave my dad the job of finding out how much it cost to make every item they produced. From the time of the firms creation, 1886, they had more or less based their prices on what the competition was selling furniture for. The theory being that if the competition could stay in business at the prices they charged, then the company my dad worked for could too. The basis for my father's choice was that he held the production record for every machine in the place so he knew how much the labor was and he had training as an accountant. On the whole by dad's bosses were good guessers but there were still items that they were "giving away" and others that should have required the salesmen to where a black mask.
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