Quote:
BigKev wrote:
I always like to think of it as "Titanic economics". The White Star line made most of their profit from the Steerage passengers, not the First Class passengers. It's all about the volume.
As did our Detroit three (you know, the companies that force Americans to buy thirsty SUVs that break down every month), when the Luxury thing is going well you make LOTS of profit on each unit, the cost to make a Cadillac vs a Chevy ins't nearly as big as the retail price difference of each. But when people aren't buying luxury in big numbers you had better have what they want to buy.
One detail I have observed in the companies that survived the depression/war/1950s shakeout is that they were the companies that were hostile to labor and preditory in their business models.
One "what if" I like to ponder is a join-up that could have happened during the wild days of the 1920s between Nash and Packard (who actually held talks about this). Charles Nash would have needed to run things, his business acumen and legendary frugality (OK, he was CHEAP!) allowed Nash to survive the depression and actually post a profit in 1932, a mean feat. He did it through tight control of expenses. Had they been able to combine, and perhaps bring a low price high volume product into the mix they could have survived, maybe.
The last great join-ups were formulated in the 1920s.
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