Interesting story from the AP
General Motors is taking a seemingly odd approach to falling sales of pickup trucks: It's raising prices. The company says the price of the 2014 Chevrolet Silverado will go up almost $2,100. Full S...
Forum Discussion
720Deere wrote:
Using the logic, 50% of what we pay for a truck should be profit for the manufacturer. If that was the case, why did the government have to bail them out? Obviously there is a waste in business, but it is pretty tough to go belly up with a 50% profit margin!
If you think the sticker vs. selling price on these trucks is ridiculous, try looking at furniture! If you pay more than 20% of the "list price" on furniture, you are getting ripped off bad.
GM has outrageous legacy costs to cover thanks to over generous union benefits over the years. This is the reason that they can't make a profit selling a comparable vehicle for a comparable price. At one point I read an article that stated that GM was LOSING MONEY on each vehicle it sold because the cost to procure parts, pay employees and cover the pension and healthcare costs of its retiree's was more than the free market was willing to pay for a GM product. This isn't to say that GM doesn't make a good product, its just that the average consumer isn't willing to pay for all the associated overhead costs that GM is contractually obligated to pay. Hence why I think they should have gone bankrupt... so they could permanently settle and restructure those obligations.
