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Post by BearClause on Jun 18, 2018 15:48:36 GMT -5
Porsche is mostly its own island though. I get that there's the occasional joint platform like the Toureg/Cayenne, but it seems more like how Fiat leaves Ferrari and Maserati alone. I know it was kind of complicated - especially with BMW threatening to cut off engine supplies. However, I remember it at the time and I got the impression that Rolls-Royce plc was worried that Volkswagen would reduce the value of the brand via association. Lamborghini was sold at about the same time as the BMW/Rolls-Royce scuffle, so Volswagen didn't have a track record. Also - Lamborghini already went through Chrysler (Lee Iaccoca's pet project). As for Porsche, wasn't the ownership situation kind of convoluted? Something about minority ownership. I thought that Porsche effective bought out Volkswagen a decade ago. VW does have a track record, they owned Audi, an up-market brand that is a rival to BMW and Mercedes. Porsche is it's own brand, but they shared ownership with VW as well as technology with the VW brand. At the end of day, VW are a German automaker, and the Germans are well-known for their engineering prowess and driveability of their cars (Opel being the exception, but that is because they are owned by GM, hence they have a reputation for being cheap and nasty). Their reliaiblity is not at the level of BMW and Mercedes, that is true, but VW still do make good cars. BMW is a smaller and specialized premium brand, they are known for their luxurious yet sporty cars with great handling, presumably, RR licensed it's brand to BMW because of that as well as their previous working relationship. I know of VW and their W12/W16 engines for their exotic/luxury lines being basically doubled-up VR6/VR8 engines. Any large manufacturer can make exotic engines. Ford has. GM has. All the Japanese carmakers have. However, I heard that part of it was the Rolls-Royce plc was a bit worried that VW's reputation might reduce the value of the Rolls-Royce brand. Certainly right now it would with all the VW/Audi emissions issues.
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Post by ironhammer on Jun 18, 2018 19:32:21 GMT -5
VW does have a track record, they owned Audi, an up-market brand that is a rival to BMW and Mercedes. Porsche is it's own brand, but they shared ownership with VW as well as technology with the VW brand. At the end of day, VW are a German automaker, and the Germans are well-known for their engineering prowess and driveability of their cars (Opel being the exception, but that is because they are owned by GM, hence they have a reputation for being cheap and nasty). Their reliaiblity is not at the level of BMW and Mercedes, that is true, but VW still do make good cars. BMW is a smaller and specialized premium brand, they are known for their luxurious yet sporty cars with great handling, presumably, RR licensed it's brand to BMW because of that as well as their previous working relationship. I know of VW and their W12/W16 engines for their exotic/luxury lines being basically doubled-up VR6/VR8 engines. Any large manufacturer can make exotic engines. Ford has. GM has. All the Japanese carmakers have. However, I heard that part of it was the Rolls-Royce plc was a bit worried that VW's reputation might reduce the value of the Rolls-Royce brand. Certainly right now it would with all the VW/Audi emissions issues. I just don't get the reputation part, that's all. Fact is, VW is a good auto-maker, and this goes beyond particular engines. I mean, the Golf is one of the best-selling cars out there today globally. They also managed successful premium brands. They built Audi from the ground-up to become a legitimate competitor with BMW and Mercedes. Not every automaker can do that. Look at Ford, when thy owned Jaguar, it didn't do all that great, as it suffered from problems with reliability, dated designs and poor sales from the X-Type. And Lincoln, not exactly everyone's first choice if they are going to buy a luxury car. And the VW emission scandal was only in the last few years, way after BMW secured the RR license. BMW only makes luxury cars, so in that sense it is 100% premium brand, that is different to VW which makes more mass market cars with it's main VW brand, but in terms of engineering ability, the two is not as different in ability as some see it.
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Post by BearClause on Jun 19, 2018 14:20:52 GMT -5
I know of VW and their W12/W16 engines for their exotic/luxury lines being basically doubled-up VR6/VR8 engines. Any large manufacturer can make exotic engines. Ford has. GM has. All the Japanese carmakers have. However, I heard that part of it was the Rolls-Royce plc was a bit worried that VW's reputation might reduce the value of the Rolls-Royce brand. Certainly right now it would with all the VW/Audi emissions issues. I just don't get the reputation part, that's all. Fact is, VW is a good auto-maker, and this goes beyond particular engines. I mean, the Golf is one of the best-selling cars out there today globally. They also managed successful premium brands. They built Audi from the ground-up to become a legitimate competitor with BMW and Mercedes. Not every automaker can do that. Look at Ford, when thy owned Jaguar, it didn't do all that great, as it suffered from problems with reliability, dated designs and poor sales from the X-Type. And Lincoln, not exactly everyone's first choice if they are going to buy a luxury car. And the VW emission scandal was only in the last few years, way after BMW secured the RR license. BMW only makes luxury cars, so in that sense it is 100% premium brand, that is different to VW which makes more mass market cars with it's main VW brand, but in terms of engineering ability, the two is not as different in ability as some see it. Audi and Auto Union (the four circles) predate Volkswagen. VW bought them later on. I'm just saying that back in the 90s, I heard it was much about the perception of VW as making ordinary vehicles - especially as one that's main product was economy cars. I get that any major automaker can produce specialty engines like Ford did for the GT or GM did for the Corvette. But would RR plc have stood by if GM or Ford have tried buy out RR Motors?
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Post by Deleted on Jun 19, 2018 19:38:45 GMT -5
GE's been dropped from the Dow. Or will be.
Maybe this was mentioned. I will check.
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Post by Phaedrus on Jun 19, 2018 20:56:08 GMT -5
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Post by ironhammer on Jun 19, 2018 23:12:37 GMT -5
I just don't get the reputation part, that's all. Fact is, VW is a good auto-maker, and this goes beyond particular engines. I mean, the Golf is one of the best-selling cars out there today globally. They also managed successful premium brands. They built Audi from the ground-up to become a legitimate competitor with BMW and Mercedes. Not every automaker can do that. Look at Ford, when thy owned Jaguar, it didn't do all that great, as it suffered from problems with reliability, dated designs and poor sales from the X-Type. And Lincoln, not exactly everyone's first choice if they are going to buy a luxury car. And the VW emission scandal was only in the last few years, way after BMW secured the RR license. BMW only makes luxury cars, so in that sense it is 100% premium brand, that is different to VW which makes more mass market cars with it's main VW brand, but in terms of engineering ability, the two is not as different in ability as some see it. Audi and Auto Union (the four circles) predate Volkswagen. VW bought them later on. I'm just saying that back in the 90s, I heard it was much about the perception of VW as making ordinary vehicles - especially as one that's main product was economy cars. I get that any major automaker can produce specialty engines like Ford did for the GT or GM did for the Corvette. But would RR plc have stood by if GM or Ford have tried buy out RR Motors? Audi was not a luxury brand when VW took it over though. It was VW who turned the brand into a premium brand to rival BMW and Mercedes. Whereas BMW focused on luxury and sporty vehicles as it's sole product. It is consumer perception that BMW enjoys higher reputation because they make exclusively up-market cars, and that may have played into RR's calculations, but in terms of real engineering ability, VW does not lag BMW by much, if at all. BMW and VW are all German automakers, and I dare say, VW makes cars with better driveability than the average Ford or GM vehicle, leaving aside "halo" products like the Mustang. BMW's working history with RR was also the deal-clincher.
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Post by ironhammer on Jun 19, 2018 23:15:08 GMT -5
Good thing I don't own GE stocks anymore.
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Post by Phaedrus on Jun 22, 2018 8:51:52 GMT -5
Say what you will about John Flannery, at least he is diligent about communicating with the employees. The contents aren't anything to write home about but at least he is trying.
He is generally upbeat about the bad news, his message to the rank and file are reassuring and puts a positive spin on everything, Whether you buy it or not that is your decision.
This time, he put out a message about being dropped from the Dow, he was defiant and kind of pissed. It is actually a good sign, IMHO.
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Post by mikegarrison on Jun 22, 2018 17:21:53 GMT -5
By Jon Talton Special to The Seattle Times
Some companies are built for a quick buck. Others are created for the ages, such as they are in the fast time warp that is American capitalism.
Among the latter is General Electric, formed in 1889 and based on the many breakthroughs of Thomas Edison.
GE is still with us, but this week it will be dropped from the Dow Jones Industrial Average, a stunning fall. It was an original member of the index in 1896 and had been part of it continuously since 1907.
One can argue this is mere symbolism. GE’s market capitalization is almost twice as much as the company that will replace it, Walgreens Boots Alliance. But its shares have fallen 55 percent over the past year, a drag on the Dow.
Apple replaced AT&T in 2015 with no ill effects on the latter, which recently swallowed Time Warner.
Financial Times columnist John Authers sniffed, “This is only a minor technical adjustment to a meaningless and obsolete index.”
Maybe — it’s true that the Dow has limitations. For example, Amazon, one of the world’s biggest technology companies, isn’t on it. The index is a fraction of the stock market, which is a fraction of the overall well-being of the nation.
But a closer look reveals that General Electric’s decline says much about what ails the American economy.
David Blitzer, chairman of the index committee at S&P Dow Jones Indices, told the Wall Street Journal that with the switch, “the DJIA will be more representative of the consumer and health care sectors…. Today’s change to the DJIA will make the index a better measure of the economy and the stock market.”
He spoke more truth than perhaps he realized.
GE once embodied American know-how, industrial might and the rising, secure middle class.
The company built everything from electric motors and light bulbs to locomotives, airplane engines and computers. GE founded the Radio Corporation of America (RCA) and co-founded NBC. One of its scientists, Ernst Alexanderson, was instrumental in developing television.
“We bring good things to life,” as the company’s long-time slogan went.
In 1955, GE employed more than 210,000. By 1980, the headcount was 411,000, many represented by unions, all paid good money with full benefits.
Then came Jack Welch.
As chief executive from 1981 to 2001, Welch upended the giant. His aggressive cuts and pressure for short-term results drew plenty of criticism. “Neutron Jack,” like the neutron bomb, eliminated people but left the buildings intact.
He bragged about reducing the U.S. payroll to 299,000 by 1985 through sales of units and layoffs. At the same time, he was making acquisitions, expanding into emerging markets and areas where GE faced peril, such as finance.
Initiatives such as “rank and yank,” where 10 percent of managers were fired each year, were widely copied GE morale-busters. For example, Microsoft had its hated stack ranking — gone now, and the company is performing better.
The consequences of Welch’s tenure played out in scores of once-prosperous towns across the country, such as hard-hit Schenectady, N.Y. Many never recovered.
But he was also lionized, too. Fortune magazine named him Manager of the Century. He mentored some of the most important next generation of CEOs, including Boeing’s Jim McNerney. His aggressive management style was widely copied.
But Welch, who has lost his luster, didn’t operate in a vacuum.
He was the most skillful operator in a new style of American capitalism, where institutional investors and a demand for ever-higher stock prices ruled an impatient Wall Street. Mergers, industry consolidation and layoffs pleased the markets.
Meanwhile, union busting was empowered by President Ronald Reagan in the 1981 air-traffic controllers strike. When they defied an order to return to work, he fired all 11,000. (Paradoxically, Reagan was the only American president to have led an AFL-CIO union.) Private-sector bosses took their cue, largely unencumbered by a weaker National Labor Relations Board. Replacements were typically paid less.
Workers were increasingly seen as a “cost center,” a liability to the bottom line. Companies sought cheaper labor in the South, long before NAFTA.
Whatever the talk of “our employees are our greatest asset,” the walk was often different by the 1980s. Wall Street and business schools taught Lean and Mean! If It Ain’t Broke, Break It! Do More With Less (including wages and benefits, but not in executive compensation)!
Nearly every American older than 40 working in the private sector lived through this. Every American will live with the lower economic mobility and opportunity that resulted.
One wonders if it would even be possible to build a GE, especially investing in its innovations, with today’s loot, flip and merge capital markets. Amazon might be an example — but it’s already nearly a quarter-century old. No wonder startups are declining at an alarming rate. No wonder Northwestern University economist Robert Gordon says we’re stuck without job-growing leaps such as electrification.
Given this environment, apologists might argue that Welch saved GE from the destruction that befell the likes of Westinghouse, Bethlehem Steel, Woolworth and the Pennsylvania Railroad — once mighty, now gone.
On the other hand, Welch set up the company to be badly wounded by its GE Capital unit, which came to grief in the financial panic a decade ago. His fear-based culture made it risky to tell the boss unpleasant truths. Hand-picked successor Jeffrey Immelt was criticized for running a “success theater” that concealed trouble.
Immelt’s successor, John Flannery, was left to do the triage, including cutting the dividend and spinning off such venerable divisions as the locomotive unit. Last year, Flannery said “everything” was on the table, presumably even a breakup of the conglomerate.
After GE’s departure, the Dow will still contain some pillars of the American economy, and even producers of good jobs. Among them: Boeing, Microsoft, Intel, IBM, Procter & Gamble and Caterpillar.
But they are no longer synonymous with the middle class, or job-creating innovation, or widely shared prosperity. Some of the 30 stocks are very now: Amusements, electronic distractions and low wages.
Some companies are built for a quick buck, others for the ages. The demise of the latter is always complicated.
But it takes a special blend of greed, hubris, incompetence and bad luck to make this mess, whether you’re GE or U.S.
Jon Talton: jtalton@seattletimes.com; on Twitter: @jontalton. Jon Talton comments on economic news, issues and trends, with an emphasis on Seattle and the Northwest.
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Post by Phaedrus on Jun 25, 2018 10:12:54 GMT -5
Someone in the investment advice business is suggesting that the next step for GE is suspending paying off dividends for a few quarters. I doubt that is going to happen, but they may cut it again.
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Post by Phaedrus on Jun 26, 2018 8:58:55 GMT -5
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Post by ironhammer on Jun 27, 2018 0:37:11 GMT -5
They are getting rid of healthcare? That is like 30% of their revenue! GE will end with less than half the revenue it had just 10 years ago. How the mighty have fallen. Maybe I wasn't that far off in saying that GE will end up as a specialist turbine manufacturer after all.
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Post by Phaedrus on Jun 27, 2018 8:17:28 GMT -5
GE went from 8 core businesses to start the year to 4 businesses after these moves.
They are getting rid of healthcare to make the portfolio more consistent. It's all about the power generating segment and aviation.
Analysts have beat up on the deal because it exposes the company to risks due to the imbalance in the overall market mix.
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Post by Mocha on Aug 30, 2018 14:12:53 GMT -5
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Post by Mocha on Oct 1, 2018 13:07:40 GMT -5
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