As of early October 2008, total U.S. employment had fallen by more than 760,000 jobs and by the time you read this, I suspect the number will be much larger. This loss compares to a gain of 1.1 million net new jobs in 2007 and the addition of nearly seven million net new jobs during 2004-2006.Since World War II, (and prior to this year’s election), the nation’s unemployment rate has risen only twice in the year leading up to the elections. In both cases, the incumbent party lost (www.bloomberg.com).
Platinum Equity is shutting down the Dunlap Tennessee-based Tecumseh Engine plant. It will take until April 2009 to complete the shutdown. It’s bad enough that 180 people will lose their jobs. Some OPE OEM’s will lose their primary source of snow engines. At one time there were 600 people employed at the Dunlap plant.
I never understood why a smart outfit like Platinum Equity would buy Tecumseh. If Platinum Equity wanted to get into the engine business, I know what would have been the wiser thing to do, but it wasn’t my money and no one there asked me for my opinion. Perhaps by the time you read this we’ll know if Tecumseh will be shut down or all production simply shifted overseas or if it might be sold again.
I think the story of the rise and fall of Tecumseh would make an excellent book. It’s a story of family, money, ego’s, marketing or a lack thereof. From afar, many wondered if they were really reinvesting in the business. No, I don’t have any special insight into the story. It was a nice clean line to carry from a distributor standpoint. We loved to sell the Peerless Division’s parts and units. Tecumseh parts didn’t change very often…just like Murray parts didn’t change. Now there’s a rumor on the street that perhaps a major OPE OEM who does not make their own gear boxes will buy Peerless from Platinum Equity, but it’s not yet credible.
If you want to learn about the “soap opera” side of the story, go to my Blog at http://anonymousdistributor.blogspot.com/ and read my March, 2007 entry I wrote titled “Tecumseh - A Soap Opera or an Opportunity Waiting?” It covers the first three months of 2007, and it’s a sad episode in a much larger and depressing story.
I was reading the other day about what some big companies are doing to combat the excessive use and the high cost of energy. Did you know Sam’s Club is selling milk in square cartons? As a new design, they probably are more expensive to make. But the square design allows them to stack better and without crates. You can get three times more square containers in a cooler than the normal shaped milk container saving money and energy, and requiring 60 percent fewer trucks.
Speaking of coolers, some grocery stores are putting doors on refrigerated cases and cutting energy use 70% on that aisle.
Staples cut fuel use 15% just by placing a 60 mph limit on its drivers. The trucks move slower, but stop for gas less often. And total delivery time is the same.
Another writer mentioned UPS’s “no-left-turns” program to avoid waiting to cross traffic. Using GPS data, UPS routes basically now go in concentric circles to the right. The saving have been about 28 million miles of driving and 3 million gallons of gas since it was implemented. That’s impressive!
My point is that reducing energy usage (and costs) is often just using common sense. Simply turning out lights in a room not being used or completely turning off your computer or TV rather than leaving them on stand-by are simple ways to start getting in the habit of thinking about energy usage. I have a strong suspicion that we’ll all be thinking a lot more about it in the years to come.
You know from reading my past columns that I’m a big fan of Warren Buffett. (I believe a few other people admire Mr. Buffett also.)
In a recent interview with CNNMoney.com, Mr. Buffett said he wasn’t interested in placing blame for the (recent financial) crisis. “I don’t worry too much about pointing fingers at the past,” he said. “I operate on the theory that every saint has a past, every sinner has a future.”
He said the problem boils down to a widely-held assumption during the housing boom that prices could only go up. And while the theory's flaws are all too apparent now, the misconception is understandable, said Buffett, pointing to previous asset bubbles going back centuries.
"There are not bad guys in that situation," said Buffett. "It's a condition of human nature."
