[Mr. Clean]

Originally Posted by Len_A

I was curious. I wouldn't say that people not in the industry don't have a clue, but I will go so far as to state that whether we're talking about GM, Ford, and Chrysler, or Toyota, Honda,and Nissan, the steps in bringing product to market, and a lot of the industry's practices, don't mirror other consumer products, or a lot of other business models. A lot of it mirrors industrial products in how long it takes to get to market, with the added complexities of changing consumer tastes coloring and complicating all of the business.

Trade credit is one area I found the auto industry deviates from a lot of the business world in a way that's somewhat unhealthy. Almost every area of the business world I've been exposed to is that payment terms are Net 30 days. The auto industry pays it's tier one suppliers net 45 days. Except for tooling. Tooling for the plants is net 45 days after job one. Anyone who supplies equipment for an assembly plant, or and other OEM plant, like an engine or a transmission plant, is often waiting for months after delivery, to get paid, for something that may have had raw materials delivered to the supplier three, four, even eight months before project completion. machine tool builder doesn't get paid until the car, that the equipment was designed to help build, starts production.

And that's not just a Detroit practice - the other auto makers do it as well.

It's a dysfunctional business model all the way around, in ways too numerous to list. It's a wonder anyone makes a buck in it anymore, and Toyota's $336 Million third quarter North American loss may show the cracks in their armor.

Spoken by an industry "insider"....And so why again should the American public want to cast their dollars to an industry that doesn't have a logical/healthy business model/plan? Note, I'm not singling out just the automakers by this statement. But, to argue that "our industry is special" "we don't conduct business the way others do" well tdb. If you don't and they do, they are profitable and you're not, you wouldn't have to pay me $16million (or whatever the numbers are) to figure out something is wrong and we need to fix it. Don't wait until the ship is up to the gunwales in water before it is decided that there are holes in the hull that need to be repaired. Instead, again basing this on the Chrysler situtation, we'll just hail down the public to help us bail.