Interesting post by Charlie Vlk about Kato's business plan

[MichaelWinicki]

I saw that quote and questioned it myself.  Maybe because I am an American and not Japanese, I don't understand why they wouldn't jump on an easy profit opportunity, planned or not.

When you go to the bank and make a deposit, the bank doesn't give you more because you worked harder for your money.

Neither do they care if the money you deposited was the result of long-term planning or a short-term project.

Last time I looked Japanese companies had gotten their noses bloodied just as badly during the recession as did those from other countries.

I think the whole "long-term planning" thing is outdated and doesn't apply to a world economy that is as incredibly fluid as what this one is.

[wm3798]

I think the GEVO thing is just the tip of the iceberg.  Matt scooped Kato on that one.  By the time they limp their's out, his will be well established, both in terms of quality and design.  Heck, even Bachmann's SD-45 will work as a stopgap while yet another decade fades away without a Kato run.  Intermountain threw down the gauntlet with their F unit series, and is now trying to make a dent in the SD-40-2 market.  While none of these may be on a par with Kato in terms of operation or appearance, but the fact is, they are there because Kato isn't!  What's likely to happen is that some of the smaller manufacturers may start to band together and gain some critical mass, then really go for Kato.  I have to wonder what that 15% translates to in terms of US market share... it may not be hard to just push Kato off the map with a couple of home runs...

Atlas TruTrack 65 is a part of the equation, and all of the above in terms of competing products.  Maybe what Matt needs to do next is introduce a JNR steamer!

Lee

[Erik W]

Maybe what Matt needs to do next is introduce a JNR steamer!

Lee

I think they'd send the Yakuza after him . . .

Erik

[seusscaboose]

Ed
This is not surprising.  Toyota does something similar.  They set goals for market share and profit and take great pains in meeting it.  There process for business planning emphasizes a growth model that is restricted but always growing.  From my experience, while this does in fact limit there growth, it also limits their losses (if any, since their operating costs are so low) and allows a constantly (annually) positive trend with little regard for external variables.  All that being said, it is these unplanned external variables that cause them strife.  It is exactly these "unknowns" that they are trying to control and thus always grow.

EP

[wm3798]

Didn't Toyota suffer losses last year?  I remember reading that it was the first time since WW2 or something.

So while the plan may not be perfect, Toyota's losses didn't require them to go sobbing for a handout, or bankruptcy like GM and Chrysler...  There is merit in a long steady growth curve...

Lee

[MichaelWinicki]

Toyota is certainly one of the foremost corporations out there. 

And like with many Japanese firms (even Kato) they make an outstanding product.

However Toyota didn't *****-foot around when it came to the American market.  They came and conquered by combining a quality product with a product MANY CONSUMERS WANT(ED).

They didn't decide to offer a V-8, 6,000 vehicle because they thought it would be fun. 

No, they brought products to market that consumers desired, much to the chagrin of the big-3.

There's nothing wrong with long-term plan if one truly understands the market.

[seusscaboose]

No, they brought products to market that consumers desired, much to the chagrin of the big-3.

exactly... which is why you and i are now part owners of GM... 

There's nothing wrong with long-term plan if one truly understands the market.

even if you mis-calculate it (which does occasionally happen), a limited plan restricts loss.

the flip side of this... that i always find fascinating... is that Toyota essentially "decided" when it wanted to "take" market share (and how much) and then "simply did".  It was a surprise to some people, but only those not paying attention.

[Mark5]

No, they brought products to market that consumers desired, much to the chagrin of the big-3.

exactly... which is why you and i are now part owners of GM... 

Not exactly. GM has a long and proud tradition of sitting on their ______. GM had a big hand in getting to where they are now.

Mark

[sundowner]

Didn't Toyota suffer losses last year?  I remember reading that it was the first time since WW2 or something.

So while the plan may not be perfect, Toyota's losses didn't require them to go sobbing for a handout, or bankruptcy like GM and Chrysler...  There is merit in a long steady growth curve...

Lee

Toyota did't need to because they are already subsidize by the Japanese goverment.

[John]

Lets not deviate into the US auto industry, and all the associated political ramifications. We all have our beliefs of why Detroit is in such dismal shape .. but lets get back to trying to figure out why Kato won't make SD40s

[up1950s]

Lets not deviate into the US auto industry, and all the associated political ramifications. We all have our beliefs of why Detroit is in such dismal shape .. but lets get back to trying to figure out why Kato won't make SD40s

Or a UP FEF-3

[u18b]

I think Kato has totally screwed up.

They are making WAYYYYY too much money on the SD70ACe.

Far too successful.

[David Leonard]

The way I see it, Kato is operating at full production, and they can pretty much count on selling almost everything they make. Life Like, on the other hand, over produced many of their offerings, and a lot of their stuff is sitting around. So which company has the most new products for us each year?

[seusscaboose]

back on track (thanks john)... 

a previous comment suggested that maret knowledge was the key... i think that holds true in this case as well.  they make a product in demand... it is a wonder they limit it. (i feel like a waffle).
EP

[Mark5]

The way I see it, Kato is operating at full production, and they can pretty much count on selling almost everything they make. Life Like, on the other hand, over produced many of their offerings, and a lot of their stuff is sitting around. So which company has the most new products for us each year?

Lifelike got killed.