We were driving in a caravan to a friend’s dock the other day on a beautiful late-summer Midwestern day. The line of cars winding through the back coastal roads near Lake Michigan was notable not for our vehicle (a V8 truck) but for what was absent: a Tesla. All four other cars in our group were Tesla Model Xs, all of which had been purchased in recent months by friends who previously drove a mix of fully loaded GMCs, Suburbans, Expeditions, and other similar vehicles. This proves that Tesla’s ingenious pricing strategy is working. On January 1 of this year, a Tesla Model X (the three-row SUV) cost $120,990. The exact same car in September was priced at $79,990. Comparable gas or electric top-end large SUVs from Ford, GM, BMW, Mercedes, and others still cost $100K and up. That's a roughly 34% price drop, for those keeping score. … [Read more...] about Tesla Channels Henry Ford’s Pricing (and Supply Chain) Strategies
Industry News
China’s Economic Slump: Yes, It Impacts U.S. Manufacturers
In the past, when CEOs mentioned China in earnings reports in a negative manner, it typically centered on supply chain issues such as delayed shipments, quality concerns, counterfeit or substitute materials, increased pricing or related “procurement” considerations. No longer. Despite the debate around trade deficits, IP transference and market economy considerations, China has become increasingly important from a top line perspective as well. And stagnation in segments of the Chinese economy have now impacted the top line of western manufacturers as well, creating a material impact on revenue and earnings. Consider Apple, a Fortune 5 manufacturer, as a case in point. When Apple’s CEO, Tim Cook, writes a letter to shareholders blaming Apple’s overall revenue/earnings slowdown on China as he did in early January, it is worth paying … [Read more...] about China’s Economic Slump: Yes, It Impacts U.S. Manufacturers
The Costly, Illegal Secrets of Corporate DEI
As an outgrowth of the recent Supreme Court ruling striking down race-based admissions at two top universities, Corporate DEI (Diversity, Equity, and Inclusion) programs are under legal attack for violating non-discrimination and equal opportunity laws. DEI programs extend into company supply chains as well, thanks to supplier diversity programs which have favored specific demographic ownership over others in terms of contract award decisions and even specific set-asides. In the Supreme Court ruling, Chief Justice Roberts observed that the Constitution’s Equal Protection Clause may never be used in the negative or operate as a stereotype. In other words, you can’t harm specific classes of individuals by favoring another. The Supreme Court found that The University of North Carolina violated the Equal Protection clause by … [Read more...] about The Costly, Illegal Secrets of Corporate DEI
Whatever Happened to ESG?
ESG (Environmental, Social, and Governance) investments were the "hot" new thing in recent years. Investopedia defines ESG investing as referring to "a set of standards for a company's behavior used by socially conscious investors to screen potential investments." Supporters of ESG investing claim it improves customer satisfaction and loyalty, reduces the chance of supply disruptions, enhances hiring and retention, and helps increase the stock price by adding ESG investment funds to the list of potential investors. These claims may or may not be true. As the saying goes, "it's complicated." But even those skeptical of ESG who focus their own efforts on operational efficiency and working capital, will find common ground with another claimed benefit for manufacturers investing in it — reduced waste. This can include implementing … [Read more...] about Whatever Happened to ESG?
Manufacturing Unemployment & Tactics for Employers
It’s a good time for industrial job seekers. Not only is overall employment strong, but a scarcity of skilled talent has put many job seekers at an advantage, relative to the past. The health of the manufacturing economy and jobs growth is best told by the numbers. According to the U.S. Bureau of Labor Statistics, the total nonfarm payroll employment rose by over 200,000 jobs in August and the unemployment rate stood “unchanged” at 3.9%. And manufacturing employment for the year is “up by 254,000, with more than three-fourths of the gain in the durable goods component.” The macroeconomic climate for manufacturers (which will drive jobs trends in the months and quarters to come) looks as healthy as the jobs market. According to the Institute for Supply Management, the August PMI (manufacturing index) rose to its highest level since … [Read more...] about Manufacturing Unemployment & Tactics for Employers
