| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 1765.1 | dumping? | SAUTER::SAUTER | John Sauter | Tue Oct 11 1988 17:48 | 14 |
| What is this "dumping" business, anyhow? Does anybody have any
authorative information on what constitutes "dumping"?
On a TV show a while ago I heard a former Japanese bureaucrat claim
that the determination of "dumping" involved examination of the
manufacturing and distribution costs, plus 20% profit. If you sell
for less than the price determined by this formula (which I have
probably over-simplified, but you get the idea) then you are "dumping".
The former bureaucrat's point was that if a company is willing to
settle for less than 20% profit it shouldn't be accused of "dumping".
Is this true? Is "dumping" a profit-maintenance program? If so,
it's just another word for protectionism.
John Sauter
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| 1765.2 | Dumping? duuuh. | RAVEN1::EVERHART | Keep them away! | Tue Oct 11 1988 18:40 | 24 |
| re .1
I don't know what dumping is either, but if the formula you
just described is the limitation for it, then it is a good idea
to penalize foreign companies from "dumping." I may be wrong, but
I don't believe Japan has any anti-trust laws. Therefore, a Japanese
company can grow to such a point that it could AFFORD to sell for
a much smaller amount of profit, perhaps even at a loss for a while.
By doing so, it ends up pushing United States industries out for
business, some of which merge with the japanese company, making
the trust larger and more powerful. As you can see, this eventually
becomes a serious problem. So, good ole Uncle Sam steps in and
prevents this from happening the best way he knows how. Of course,
you can look at this intervention as detrimental because US industries
are no longer forced to "get their act together or give it up."
OK. I'm through being boring. These opinions are my own, and
in no way reflect anyone elses except by chance.
- Chris
P.S. (I don't know why I included this. I'm sure no one cares.)
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| 1765.3 | I wouldn't trust the Japanese definition any more than the government's | STAR::BANKS | In Search of Mediocrity | Tue Oct 11 1988 19:17 | 42 |
| The generic definition of dumping is just "predatory pricing", and
in particular, selling something at a loss (less than 0% profit)
for the express purpose of undercutting the competition to force
them out of business. This is a bad monopolistic practice.
Not that it's the same definition our government is using. I don't
know what definition our government is using, and I don't know that
I'd trust them to be entirely objective about this.
At the same time, I don't know that I'd trust a Japanese bureaucrat
to be any more objective about this. If they (the Japanese companies)
were guilty of dumping (and I don't know if they are or aren't),
it'd be in their best interest to have someone like this sitting
around telling the press that they aren't REALLY dumping, just making
less than 20% profit.
That having been said, there are a couple of points to take into
account:
First, a dollar buys half as many yen as it did just a couple of
years ago. Instead of Japanese floppy disks costing twice as much
now as they did when we got our Amiga, they have actually dropped
in price a bit. Something's got to give here. (One example would be
that they actually manufacture the floppies someplace which has
a currency that hasn't gone up with respect to the dollar - the US
for instance.)
Second, Japanese tourists, while visiting the US, like to buy Japanese
goods, because the prices for Japanese goods in the US are so much
lower than in Japan. Something has to give here, too. (One possible
reason: The Japanese distribution system is a mess.)
Are the Japanese companies dumping floppy disks? Maybe, maybe not.
To do so is not considered unethical according to Japanese business
practice, so it's not entirely unlikely. On the other hand, they've
got slapped on the wrist so many times for it that they may be afraid
to try it again. On the other, other hand, every time they get
"slapped on the wrist", what really happens is that the US government
demands that they raise the prices a lot, which just means they
get more profit per unit item. I don't know if they've actually
lost revenue from one of these wrist slappings yet (ref: autos and
memory chips).
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| 1765.4 | Sony floppies speak Spanish | TLE::RMEYERS | Randy Meyers | Tue Oct 11 1988 21:41 | 24 |
| Re: .3
> First, a dollar buys half as many yen as it did just a couple of
> years ago. Instead of Japanese floppy disks costing twice as much
> now as they did when we got our Amiga, they have actually dropped
> in price a bit. Something's got to give here. (One example would be
> that they actually manufacture the floppies someplace which has
> a currency that hasn't gone up with respect to the dollar - the US
> for instance.)
The last box of Sony floppies I bought in bulk was labeled "Assembled in
Mexico from US made components." Previously, such floppies were labeled
"Made in Japan."
>On the other, other hand, every time they get "slapped on the wrist",
>what really happens is that the US government demands that they raise
>the prices a lot, which just means they get more profit per unit item.
>I don't know if they've actually lost revenue from one of these wrist
>slappings yet (ref: autos and memory chips).
Every time a company is prevented from dumping, the company makes more
money. However, the company has been forced to give up the long term
benefit of decreased competition in the future for the short term benefits
of a profit this year.
|
| 1765.5 | Just some thoughts... | PNO::SANDERSB | a belagana | Wed Oct 12 1988 14:19 | 107 |
|
"Dumping" carries with it a lot of long term implications as does
protectionism.
Scene 1) Large company, after doing an analysis of an existing
market, finds weaknesses:
. Low or variable quality.
. High need.
. Good profit margins.
Company then makes the same product with paticular
attention to quality control.
Company adds some features, but QC is still the major
feature.
Company becomes known in the market and becomes
established.
Company does an analysis and finds that by taking a
short term loss, it can pick up the majority of the
market and force competetiors out of the market.
Once the above is accomplished the company then sets
the price of the product by very closely watching
distributors and retailers. They do something wrong,
they no longer get the companies product.
Company still has QC as number one, but assigns jr.
Engineers to value engineer product. Different
products are now available at various price levels,
however, product does not always function as specified.
Since the company has a virtual monopoly on the market,
it is a small problem for them as there is no longer
any serious competition. However, they are off
battling for control of other markets and varing
quality in this one is ok.
Current examples of the above:
. Toyota automobiles.
. Honda motorcycles - Harley Davidson has been
fighting clones for 6 years
and is the only U.S.
Manufacture left.
. VHS VCR's (Sony lost this battle even though
their Beta format is technically
superior.)
. CD players.
. Cassette audio tape (shared by Maxell and TDK).
. 3.5" floppy diskettes - Sony.
. TV's - Zenith is the only U.S. Manufacture
left.
Scene 2) Small company is a division of a larger corporation
whose goal is short term profit. The company has always
dominated their market, until recently.
The employee's are very loyal to the company and dislike
what they are made to do in order to achieve the
corporate goals.
The company has always had a system to listen to its
customers, but these suggestions are now being ignored
and the product is being made with cheaper parts in
order to maximize profits in spite of quality or
reliability.
The company is in trouble and the corporation is now
looking for a buyer.
The employees get together and buy the company. At this
time the competition has entered their market with
products that look like the companies, but is more
technically up to date. The competitions quality far
exceeds the companies.
The company goes to the President of the U.S. for
protection against encroachment and gets it.
The company then concentrates on quality, and
incorporating technical changes in their product line.
They are out listening to customers again and this helps
to set the direction of future products.
The company regains some of its lost market share and is
no longer in need of protection. The market is again
competitive.
That company is Harley Davidson.
In Scene 1, even though protectionism was used the market was
still lost due to the goals of the corporations and companies.
It was lost mainly due to the lack of quality in the product.
Little attention was paid to the customer or their needs.
In Scene 2, protectionism was used, but the focus of the the
company was quality, not profit. The company endures, the market
has competition, and customers are listened to.
They run this kind of simulation time and time again at places
like Harvard Business School. When the focus becomes profit and
not quality, the Japanese always win. It is too bad that most
folks who earn MBA's never learn this...
Bob
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| 1765.6 | Some dumpers are domestic | NAC::PLOUFF | Cider Season Has Begun | Wed Oct 12 1988 14:28 | 6 |
| Another example of Scene 1)
. Texas Instruments in calculators.
It ain't always the Japanese. BTW, for a Japanese view of trade
relations, read the comic book (!) _Japan, Inc._ Very illuminating.
|
| 1765.7 | | PNO::SANDERSB | a belagana | Wed Oct 12 1988 14:41 | 37 |
|
Your right. Even though I tried to stay away from naming the
Japanese, they are right up there.
Funny thing is that now the Taiwanese and Koreans are starting to
do the same thing to the Jananese.
Another twist is with all the "blanket protectionism" that is so
prevlant in the U.S., the Japanese have invested in factories
right here in the U.S. so that their products will not be
considered "imported."
The loser right now in all of this is the American consumer whose
job may now be lost or is now working for a Japanese corporation.
Of course our government does some real dumb things to:
. Tax exports - so that before devaluation, our products
always cost more than local products.
Most other countries would never pull
such a brain-damaged move as it makes
their products un-competitive.
. Tax multi-national companies differently - One of the
"benefits" of tax reform has been that a
company whose base is the U.S. (such as
DEC) and has multi-national operations
gets taxed when it sets up new operations
in the U.S. - brick & morter, new
division, etc. While a company based out
side the U.S. such as Phillips, who does
the exact same thing does not get taxed.
And we elect the people that write this stuff and pay them large
salaries!
Bob
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| 1765.8 | What is this doing in Amiga notes? | MQFSV2::DESROSIERS | Tout est possible | Thu Oct 13 1988 17:02 | 13 |
| You (United Staters) and me are just as mutch to blame in this fiasco,
when the bottom line is $, what is your choice? domestic or foreing?
How many of you own imported cars, TVs, VCRs, clothes, shoes...
don't you realise that when you buy from outside your country, money
flows out! so do jobs. Manufacturers are just as mutch to blame,
when they only look to return on investment, if it's cheaper to
make it in Japan, they will do it....because the investors (again
you and me) request a bigger dividend.
Off the soapbox
Jean
|