I would selectively agree. I was skeptical as to the longevity, but have lived with one for over 90,000 miles. My real world target for this turbo is a min of 500,000 miles.
If you call 10.7% less sales than last year alright. Toyota may have already chopped the head off the stylist that came up with that truck design.
First hand review. The fellow that is wanting to buy my GMC Hybrid PU test drove the new 5.7 L Tundra. He said it was loaded with power and had a better turning radius than any truck he has driven. He did not buy because it is ONE UGLY truck. I don't think it is any worse than a Dodge or Titan, but that is just my opinion.
I would have expected the hybrids to do even better with the tax credit almost gone on April 1st.
PS Lexus GS and IS look like they should be history. I say good riddance, they do not belong under a luxury marque.
Are you looking at a different article? It states that Tundra sales were 11.8% higher than last year. Overall, Toyota is on a roll by any standards. This gives me no pleasure, as I would like to see the domestics turn it around, and they still may with some very good products out there now.
My First Ting: I totally dig the truck's styling! The only full-size who's styling I don't really appreciate is the new GM. Too white-bread for me. No style. Give me somethin'!
And my #2: One hot month last year doesn't mean 13k+ this year is irrelevant. Tundra sold around 130k last year, which averages out to a little over 10k a month. 13k is a good month, also considering the CrewMax is very limited in availablity, and the RC is flying like a lead balloon.
I could definitely do plenty of PR for Toyota, but I don't see it as necessary. 15k next month is a realistic goal, and that should be the watermark from now on, at least until Toyota can fix the pricing issue with the RC.
Toyota will NOT sell 200k this year, but I believe will make a better sized dent in the market, and next year will tell Toyota a lot.
I have noticed while reading the GM sites that one of the issues brought up is the sale of cars to the rental agencies. It is pointed out that the domestics do this because they cannot sell enough through regular dealer sales. That is also contributes to low resale value.
I just happened by a big rental agency and they have a whole row of new 2007 Camry rental cars. Is this a further sign of weakening sales. Or is Toyota just trying to sell all they make?
You still have it wrong. You are not reading from the article you referenced.. Here is the direct quote from the Toyota press release. It is also repeated in the Yahoo piece with a higher percentage increase - 11.8%. "The all-new Tundra full-size pickup reported sales of 13,196 units, up 7.8 percent over Tundra sales last March."
"If that's the case for the engineers or the "desk jockeys" (since they DON'T have an union) then why isn't that the case for the floor workers as well?"
The logical response is why aren't the desk workers unionized and looking forward to a decent retirement with good medical benefits? Americans used to understand that we are all in this together to raise the standard of living; not determined to destroy the other guys because he had the sense and courage to organize and demand his and his families share.
As for 401K's; everyone in the investment "hive", outside of those selling them, knows that they have been a bust with returns trailing the indexes by far. Tennessee has ended its 403b plan (public employees equivalent to 401k) because they were seeing the failure of it, and have reinstated the defined benefit plan that the 403 was supposed to do so much better than.
"By numbers alone, Toyota appears to be succeeding. Tundra sales rose 11.8% in March, compared with declines of 8.6% for Chevrolet Silverado, 15.1% for Ford F-Series and 1.1% for Dodge Ram, Autodata reports"
11.8% more than last year would put the Tundra at about 130-140K sales this year if they can keep that sales rate up, so I am sure someone at the top is hoping that once they get proper supply of the CrewMax out there (which is currently wait-listed from what the dealers say), sales will rise more.
I think it's possible that CY 2008 (the first full calendar year) could see 200K Tundra sales, based on initial sales.
Regarding the fleet sales issue, Toyota always has (and will continue to do I am sure) capped its fleet sales at around 16% for the Camry, and somewhat less for Corolla, so I don't think we will see domestic-type erosion of resale value as a result of excess fleet sales. Toyota has been remarkably consistent in the proportion of Camry fleet sales over the years, always way less than models like Grand Prix, Taurus, or Impala, not to mention Sebrings and Neons.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Toyota states -10.7% Tundra sales year to date from 2006. That would be more important than one month sales with incentives and rebates to skew the results. I don't think they were giving rebates last March on the Tundra. Toyota like all companies like to play with words to make the bad sound like it is good. Read the sales chart direct from Toyota.
Oh yes, there were $2000 and more cash rebates on the old Tundra forever and a day before the arrival of the new model, and certainly there were last March. The rebates and behind-the-scenes cash were better back then.
And this year there was a 2- or 3-week turnover between availabilty of the old and new Tundras, and in only 3 sales months, that is 16-25% of the year so far, if I've got the math right there...so YTD figures are bound to be down.
So March '07 was the first month of full dealer stock of the new model, and while one month is too little to go by, it is good that it is up in double digits over last year's model.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
it is good that it is up in double digits over last year's model
It is if you think we need to sell more gas guzzling PU trucks. They are the lowest rated EPA MPG on the market. Wonder if Ahnold will allow any more to be sold in the state?
1. I think Tundra's styling is perfect for an All-American pickup truck - mean, serious and powerful. I've already seeing at least one new Tundra on the road everyday and that's pretty good for a newly released model. All of them are crew cabs by the way.
2. The new GS debuted in summer 05' and IS in late 05' so CY 2006 is the first year that both were on the market for a full year. One can't compare their sale numbers this year to last year when both were still on the "first year sales hype". I don't know about the GS but comparing the sale number of the current IS to the first gen IS I think Lexus/Toyota have a winner on their hands.
hypnosis44: The logical response is why aren't the desk workers unionized and looking forward to a decent retirement with good medical benefits?
I thought that under the laws governing labor unions, employees considered "management" cannot be admitted to unions. "Desk jockeys" would be considered management at the company I used to work for (a major telecommunications company) and in state government.
The only employees who could be called "desk jockeys" and weren't classified as management were secretaries and clerks.
hypnosis44: As for 401K's; everyone in the investment "hive", outside of those selling them, knows that they have been a bust with returns trailing the indexes by far.
That's odd, considering that both 401(k)s and pension plans invest in the same place - in either stocks (through the stock market), or in bonds.
Both of mine - from my previous job and my current one - have done well over the past decade. But you have to be in for the long haul.
The problem is not with the concept of 401(k)s, but with investment choices made.
hypnosis44: Tennessee has ended its 403b plan (public employees equivalent to 401k) because they were seeing the failure of it, and have reinstated the defined benefit plan that the 403 was supposed to do so much better than.
You're not giving the whole story here. I looked at the Tennessee state government website, which describes its various retirement plans. Here is what it states:
Tennessee's state retirement system is a qualified retirement plan under Section 401(a) of the Internal Revenue Code. All full-time state employees are required to participate in the state's retirement system as a condition of employment. Certain part-time employees have the option of participating. Faculty and exempt employees of the University of Tennessee or the Tennessee Board of Regents may choose between membership in Group I of the Tennessee Consolidated Retirement System (TCRS) and membership in the system's Optional Retirement Program (ORP). Once an employee elects to participate in the ORP, that election is irrevocable. (emphasis added)
Contributions
The ORP is a "defined contribution" retirement plan, which means that the amount of any future benefit will be determined by the member's account balance. Employer contributions are credited to each ORP member's account during service to a Tennessee higher education institution. The employer contributes 10% of gross salary covered by Social Security and 11% of salary in excess of the Social Security Wage Base.
What I take from this is that Tennessee state government employees had the choice of sticking with either the defined benefit plan, or switching to the defined contribution plan.
Once they choose the defined contribution plan, they could not switch back to the defined benefit plan.
No surprise that most people stuck with the defined benefit plan, as they were assured of a certain amount of benefits upon retirement, and didn't have to bother checking on the returns generated by their investments.
Of course, there is also the added benefit of the old plan - benefits are guaranteed, regardless of whether there is money to pay for them or not. Why? Because taxes can be raised to make up for any deficit in the Tennessee state pension plan.
How do I know? We are just starting this debate in Pennsylvania right now.
Your example doesn't "prove" that one from of retirement plan is superior to the other. It merely proves that state government employees are smart to stick with a plan that will give them a certain amount of benefits when they retire, because another party - taxpayers - will eventually have to pay for them if the plan cannot meet its obligations.
That's the problem for private industry - while government can raise taxes as a last resort to cover pension funds shortfalls, GM or Ford can't merely "raise prices" or "sell more" to make up for their pension plan deficits. If they could, they would.
comparing the sale number of the current IS to the first gen IS I think Lexus/Toyota have a winner at their hands.
I think you and I are looking at different sales figures. I see that the IS250/350 is down 6% over last March sales. It is down 8.2% for 2007 from the same period in 2006. How can this be construed as a good thing for Lexus? The only plus sales for Lexus is the ES and LS. All Lexus SUVs are in the toilet. ToyLex truck sales are a negative from last year. The only bright spot is the RAV4. The FJ was not in the picture the first 3 months of 2006. We will see when we have a full months comparison.
No one is mentioning Scion sales. Now there is a bleak picture if I have seen one. With the high gas price they should be selling like hotcakes. What say ye?
Good information. My question is How much does Toyota match in their workers 401K plan? Is that 401K plan under the control of the worker or Toyota? My 401K was a 3% matching plus the company paid $6 per hour into our Union retirement. I have full control of my Fidelity 401K. If Toyota would match 6-10% of the employees contribution it would be a fair pension plan. If the employee has full control, unlike the Enron rip-off, that would be good. Any Toyota employees care to let us know how Toyota treats you? So far none have spoken up that I have read. Probably fear of reprisal.
IS250/350's sale is down because last March it was still on the "first year sale hype". Those cars were so hot back then that dealers in Atlanta weren't willing to discount over $500. I know this because I bought my IS350 the last week of March last year. Got $1000 off (and another $500 off through Lexus finance) because it was considered an "internet sale" since I contacted the dealer through their webpage.
If you compare the IS sale figure of this March to March 2005 then you'll know what I was talking about. Since in March 2005 the 1st generation IS was still on the market and its sale figure was pathetic. Although the current IS is not as hot as the 3er but is whole lot, and I mean WHOLE LOT, better than the original.
The only thing Lexus put out so far that is not worthy of the badge is the 1st gen IS IMO.
As for Lexus SUVs:
LX - super outdated, but the relief is coming this year. GX - needs to move from truck-based to car-based. RX - new model is coming either late this year or early next year but I think this is still the best selling luxury SUV in this country.
Overall, both Lexus and Toyota are doing just fine. Not great but fine.
The only surprise for me was Jan & Feb sales. I expected better those months. March is typical American knee jerk reaction to high gas prices and the tax incentive going down the first of April. Now if Prius has banner sales in April it will be a sign of strength for hybrids. I don't know about your store, but lots of folks are buying the Prius at below invoice. I can understand a dealer not wanting the car to sit more than a couple weeks for fear the battery will go bad on him
First, having sold a car or two in my day, the 1st quarter is nothing to bet your life on, as winter time (after the end of the year) is the slowest time in the auto industry, and sales in the Spring are consistently better. Tax refunds this month will spur sales, for example.
Prius had it's best month ever, approaching 20k. So demand hasn't slowed, has it? An early referendum, if you will.
Regarding the IS, the new G and 335i have come out within the last 6 months, stealing some thunder. The Lexus will pick up again when Lexus releases the coupe/convertible, or when they get a stick in the 350.
Tundra, as has been stated, is obviously gonna have a slow 1st quarter, with people waiting for the new Tundra, ordering delays, and lower selections of the old model. Happens with every redesign. This is not news. The 2nd quarter of this year will tell the real story, as Toyota is making pricing adjustments to the RC, and CrewMax is more widely available.
Scion is going through the same lull, as the new xD and xB wait in the wings for their release, which Scion fans are waiting for with baited breath!
Camry fleets sales are usually at or below 10%, so that still doesn't have a market effect. GM and Ford would be dead in the water if fleet sales were 10% or less!
Scion is a HUGE success, as Toyota struggles to keep sales DOWN, and there is no way to run down Scion, Lexus or Toyota sales unless you have an agenda.
I'm sure you can look at the landscape objectively and see that. Can't you? :confuse:
You know, I am curious, what does happen (what is the process) to "NEW" car models that do not sell or title is never assigned? The yearly new car sales in the US market is app 16-17 M units.
As for 401K's; everyone in the investment "hive", outside of those selling them, knows that they have been a bust with returns trailing the indexes by far. Tennessee has ended its 403b plan (public employees equivalent to 401k) because they were seeing the failure of it, and have reinstated the defined benefit plan that the 403 was supposed to do so much better than
I don't think I've ever heard anyone decrying the folly of the 401(K), except for people who put all their eggs in one basket by putting all their 401k savings into company stock (ie Enron). Hmmm, seems a lot like depending on one company to provide you're retirement 40 years down the road, which may or may not be still around.
If that company goes bust, you're out a chunk of your pension since the US gov'ts Pension Benefit Guaranty Corp. will only pay out a portion of what you're pension was supposed to be (and us taxpayers are on the hook for it). I'll take a 401K that I control and can take with me whatever happens any day. Add to that you have to trust your company enough to actually FUND your pension to begin with.
As far as 401K's not beating the S&P or Dow, you do know most plans will allow you to invest in index funds which in essense IS the index. If there is a problem with the 401k, it's that many people who rely on them for their retirement don't bother to take a few hours to educate themselves on how they work and what options they have, relying instead on HR people or 401k administrators to reccomend something.
Not to rain on anyone parade here, but aren't all these things you are talking about, the things that got Ford, GM , Chysler etc. in DEEP trouble to begin with?
I like the job where you get paid the full salary, 100k plus? for going to a central location and sitting around all day like the high school equivalent of DETENTION? The only thing I learned about detention was not to go there, what a mistake.
But you have to like the modern day, thank goodness for WI FI.
I think what got GM and Ford in trouble was their pension and retirement medicare program. Not the 401k or equivalent saving program.
I wouldn't be surprised that within 10 years the pension program will seize to exist within major US corporations. Okay, maybe except the Microsoft, google, etc...
Yeah I would think this TOYOTA CA design influence gives a lot of folks challenges, for example; if you have to drive in snow. How functional can those low clearance fender wells and lowered (rock hard)suspensions, low profile and so called "performance" tires be when most of the country is knee deep??
If there is a problem with the 401k, it's that many people who rely on them for their retirement don't bother to take a few hours to educate themselves on how they work and what options they have, relying instead on HR people or 401k administrators to reccomend something.
This is very true. We were under the NTCA 401K. At the beginning they invested in a variety of Fidelity Mutual Funds. When we were given the opportunity to move our money around we all did better than the NTCA folks. My 401K is doing very well. I have a big share in a fund that is consistent at 17% over the last 10 years. That is fair gain in my book. I will not take any out until forced at 70 to do so as my retirement from the Union is more than enough to live comfortably. I wish my children had as bright a future retirement as I have. Companies like Toyota have not benefited the American worker in a positive way. They have only slightly upgraded people from a service industry job. When you have better medical on welfare or in jail, than working something is wrong with society.
It is my understanding that the pension funds of both GM and Ford are fairly sound.
What is killing them is paying for retiree medical benefits. The companies agreed to this benefit when medical care was much less advanced than it is now, and people did not live as long. As late as the 1970s, a cancer diagnosis was usually a death sentence. Now there are all sorts of treatments to prolong life - but they are very expensive.
Knee and hip replacements - along with the resulting physical therapy - are now quite common, but I don't remember people talking about them much when I was growing up in the 1970s.
Couple these trends with people living longer, and GM and Ford are suddenly on the hook for some VERY large expenses.
Sorry I disappointed you. When I see a press release like the one from Toyota I have to laugh. About half of the Toyota/Lexus/Scion models are selling at a lower rate than last year. How is that construed as doing great? When we know that Toyota is offering incentives to dealers that may or may not get passed on to the consumer. How is that great? I am trying to keep a level playing field. I see the same anti GM posts by those that think Toyota is the best thing going. Fair and balanced. Toyota is not going to say in their press release that March was a crappy month for Sienna sales now are they?
As a matter of fact they have pulled part of their press release with all the sales figures off the web. Guess they did not want us telling the real story.
One can see from the March sale numbers that generally speaking:
New models are doing great (gain in sale) Old models are not doing so great (loss in sale) except the Corolla Truck based SUVs are falling fast (4Runner, Sequoie, GX and LX) Car based SUVs are doing mighty fine (Highlander and RAV4)
Which shouldn't be surprised by anybody.
However, overall Toyota has the best March ever so I think Toyota is doing just fine. Not great but fine.
This of course presents danger and opportunites. The other side of the transaction; (to focus, and is not the totality) this is a wonderful time to get American cars and oxymoronically, Prius'. Getting a once above MSRP at BELOW invoice is better if one is locked onto getting THAT hybrid. (for example)
Getting the right American car at the right price (with the aid of places like Edmunds.com) might be the right option for most folks, if this is the right time (for them).
Indeed with Toyota in so called "first place", this could solidify prices for those oem's not in "first place." Keep in mind GM was for a long time in "first place" until it was overwhelmingly apparent that it was no longer in... first place.
We know they make more on a Land Cruiser than a Corolla or Camry.
WRONG.
At this point, every Corolla sold is pure profit for Toyota. It is literally a money printing machine.
Also, Land Cruiser was never meant to be a volume model for Toyota. It serves as Toyota's halo model to emphasis the company's AWD and cross country heritage.
The real volume models for Toyota are:
Camry, Corolla, Highlander, RAV4, Avalon(semi), ES and RX. Maybe one can throw Tundra and Tacoma into this group as well but I am not sure. I also think the IS is starting to become a volume model for Lexus since it is currently the 2nd best selling sedan and overall 3rd(?) best selling vehicle.
As long as those models mentioned above are doing fine then Toyota is okay.
I find the statement a tad far fetched. So if a Corolla sells for say 15,000 dollars it is 15,000 of profit!? You might want to elaborate here.
I read in passing, a Toyota takes app 21/22 hours of assembly (labor), at 30 per hour that is a min of $660. It is assembled in a factory (overhead) most of the parts are provided JIT and made by suppliers (cost of goods). Sure you can write down (depreciation) MOST (but not all) of a new plant ALMOST as a yearly expense, so..... !?
Well in terms of "profit picture", no. If what you are saying is true, why should they R and D and bring to market the FULL line of models, which they do. I would just R & D three or four gens ahead for the Corolla and just execute, execute, execute (SELL SELL SELL). Now, if you are saying it is one of the bedrocks, and profitable at that; Camry being another,etc., then I would agree.
Keep in mind the Corolla competes in the so called "small car" segment. This overal segment is a minority position of app 25% of the passenger vehicle fleet. What percentage of THAT percentage Toyota has, I will leave to others more in the know.
Well, if the older model is still selling then yes, of course you can do that. Evidently that's what the domestics did in the 80s and 90s. They milked the cow until it was dead dry and finally the consumers caught on to them. That's when they starting to fall behind and loss sales.
The current Corolla is already on the market longer than Toyota's original intention. So even though it is very "profitable" and the sale number keeps rising Toyota still needs to replace it with a new model ASAP. The dumbest thing an auto manufacturer can do is cutting back on R&D. We all know that it takes money to make money.
How this is further leveraged is the platform concept. Since this is PLACED, (so to speak the rest of the stuff FALLS, i.e., really "decoration" so to speak. Toyota has historically let any model take a long time in the marketplace. Might be why they sometimes are spoken of in terms of appliances, like a Maytag that lasts 5/10/15 years.
I believe Toyota is on the 5-year model cycle and 10-year platform cycle for its passenger cars. Not too sure about the SUVs but looks like they are on 6-year cycle to me. The corolla has entered its 7th year this year and the new model is way overdued.
Power from the Tundra is great, but the styling borrows too much from the Highlander.
Power 2nd row seats is interesting, which should help 3rd-row seat comfort.
To be fully competitive with Mercedes GL and Caddy Escalade, a sub $60k price is reguired. Seems like a fine truck, but nothing for the competition to lose sleep over.
Comments
If you call 10.7% less sales than last year alright. Toyota may have already chopped the head off the stylist that came up with that truck design.
First hand review. The fellow that is wanting to buy my GMC Hybrid PU test drove the new 5.7 L Tundra. He said it was loaded with power and had a better turning radius than any truck he has driven. He did not buy because it is ONE UGLY truck. I don't think it is any worse than a Dodge or Titan, but that is just my opinion.
I would have expected the hybrids to do even better with the tax credit almost gone on April 1st.
PS
Lexus GS and IS look like they should be history. I say good riddance, they do not belong under a luxury marque.
http://news.yahoo.com/s/ap/20070404/ap_on_bi_ge/auto_sales;_ylt=Ao_eO73jFwyw2Jlz- GBohahTMWM0F
And my #2: One hot month last year doesn't mean 13k+ this year is irrelevant. Tundra sold around 130k last year, which averages out to a little over 10k a month. 13k is a good month, also considering the CrewMax is very limited in availablity, and the RC is flying like a lead balloon.
I could definitely do plenty of PR for Toyota, but I don't see it as necessary. 15k next month is a realistic goal, and that should be the watermark from now on, at least until Toyota can fix the pricing issue with the RC.
Toyota will NOT sell 200k this year, but I believe will make a better sized dent in the market, and next year will tell Toyota a lot.
DrFill
TUNDRA 13,196 11,800 7.8 29,186 31,825 -10.7
http://pressroom.toyota.com/Releases/View?id=TYT2007040316856
I just happened by a big rental agency and they have a whole row of new 2007 Camry rental cars. Is this a further sign of weakening sales. Or is Toyota just trying to sell all they make?
"If that's the case for the engineers or the "desk jockeys" (since they DON'T have an union) then why isn't that the case for the floor workers as well?"
The logical response is why aren't the desk workers unionized and looking forward to a decent retirement with good medical benefits? Americans used to understand that we are all in this together to raise the standard of living; not determined to destroy the other guys because he had the sense and courage to organize and demand his and his families share.
As for 401K's; everyone in the investment "hive", outside of those selling them, knows that they have been a bust with returns trailing the indexes by far. Tennessee has ended its 403b plan (public employees equivalent to 401k) because they were seeing the failure of it, and have reinstated the defined benefit plan that the 403 was supposed to do so much better than.
http://www.usatoday.com/money/autos/2007-04-03-march-sales_N.htm
"By numbers alone, Toyota appears to be succeeding. Tundra sales rose 11.8% in March, compared with declines of 8.6% for Chevrolet Silverado, 15.1% for Ford F-Series and 1.1% for Dodge Ram, Autodata reports"
11.8% more than last year would put the Tundra at about 130-140K sales this year if they can keep that sales rate up, so I am sure someone at the top is hoping that once they get proper supply of the CrewMax out there (which is currently wait-listed from what the dealers say), sales will rise more.
I think it's possible that CY 2008 (the first full calendar year) could see 200K Tundra sales, based on initial sales.
Regarding the fleet sales issue, Toyota always has (and will continue to do I am sure) capped its fleet sales at around 16% for the Camry, and somewhat less for Corolla, so I don't think we will see domestic-type erosion of resale value as a result of excess fleet sales. Toyota has been remarkably consistent in the proportion of Camry fleet sales over the years, always way less than models like Grand Prix, Taurus, or Impala, not to mention Sebrings and Neons.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
And this year there was a 2- or 3-week turnover between availabilty of the old and new Tundras, and in only 3 sales months, that is 16-25% of the year so far, if I've got the math right there...so YTD figures are bound to be down.
So March '07 was the first month of full dealer stock of the new model, and while one month is too little to go by, it is good that it is up in double digits over last year's model.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It is if you think we need to sell more gas guzzling PU trucks. They are the lowest rated EPA MPG on the market. Wonder if Ahnold will allow any more to be sold in the state?
Whoooopie !!!!!!!! They sold about 100 more trucks this
March than last March...............
Still down 5000 or so over last year !
2. The new GS debuted in summer 05' and IS in late 05' so CY 2006 is the first year that both were on the market for a full year. One can't compare their sale numbers this year to last year when both were still on the "first year sales hype". I don't know about the GS but comparing the sale number of the current IS to the first gen IS I think Lexus/Toyota have a winner on their hands.
I thought that under the laws governing labor unions, employees considered "management" cannot be admitted to unions. "Desk jockeys" would be considered management at the company I used to work for (a major telecommunications company) and in state government.
The only employees who could be called "desk jockeys" and weren't classified as management were secretaries and clerks.
hypnosis44: As for 401K's; everyone in the investment "hive", outside of those selling them, knows that they have been a bust with returns trailing the indexes by far.
That's odd, considering that both 401(k)s and pension plans invest in the same place - in either stocks (through the stock market), or in bonds.
Both of mine - from my previous job and my current one - have done well over the past decade. But you have to be in for the long haul.
The problem is not with the concept of 401(k)s, but with investment choices made.
hypnosis44: Tennessee has ended its 403b plan (public employees equivalent to 401k) because they were seeing the failure of it, and have reinstated the defined benefit plan that the 403 was supposed to do so much better than.
You're not giving the whole story here. I looked at the Tennessee state government website, which describes its various retirement plans. Here is what it states:
Tennessee's state retirement system is a qualified retirement plan under Section 401(a) of the Internal Revenue Code. All full-time state employees are required to participate in the state's retirement system as a condition of employment. Certain part-time employees have the option of participating. Faculty and exempt employees of the University of Tennessee or the Tennessee Board of Regents may choose between membership in Group I of the Tennessee Consolidated Retirement System (TCRS) and membership in the system's Optional Retirement Program (ORP). Once an employee elects to participate in the ORP, that election is irrevocable. (emphasis added)
Contributions
The ORP is a "defined contribution" retirement plan, which means that the amount of any future benefit will be determined by the member's account balance. Employer contributions are credited to each ORP member's account during service to a Tennessee higher education institution. The employer contributes 10% of gross salary covered by Social Security and 11% of salary in excess of the Social Security Wage Base.
What I take from this is that Tennessee state government employees had the choice of sticking with either the defined benefit plan, or switching to the defined contribution plan.
Once they choose the defined contribution plan, they could not switch back to the defined benefit plan.
No surprise that most people stuck with the defined benefit plan, as they were assured of a certain amount of benefits upon retirement, and didn't have to bother checking on the returns generated by their investments.
Of course, there is also the added benefit of the old plan - benefits are guaranteed, regardless of whether there is money to pay for them or not. Why? Because taxes can be raised to make up for any deficit in the Tennessee state pension plan.
How do I know? We are just starting this debate in Pennsylvania right now.
Your example doesn't "prove" that one from of retirement plan is superior to the other. It merely proves that state government employees are smart to stick with a plan that will give them a certain amount of benefits when they retire, because another party - taxpayers - will eventually have to pay for them if the plan cannot meet its obligations.
That's the problem for private industry - while government can raise taxes as a last resort to cover pension funds shortfalls, GM or Ford can't merely "raise prices" or "sell more" to make up for their pension plan deficits. If they could, they would.
I think you and I are looking at different sales figures. I see that the IS250/350 is down 6% over last March sales. It is down 8.2% for 2007 from the same period in 2006. How can this be construed as a good thing for Lexus? The only plus sales for Lexus is the ES and LS. All Lexus SUVs are in the toilet. ToyLex truck sales are a negative from last year. The only bright spot is the RAV4. The FJ was not in the picture the first 3 months of 2006. We will see when we have a full months comparison.
No one is mentioning Scion sales. Now there is a bleak picture if I have seen one. With the high gas price they should be selling like hotcakes. What say ye?
..all Lexus models
..all Pontiac models
..all Mercury models
..all Chrysler models
..all Jeep models
..all Nissan models ( except the Altima )
..all Dodge models ( except Ram P/U and Caravan )
..all GMC models ( except the Sierra P/U )
..all Saturn autos combined
..all Cadillac autos combined
..all Buick autos combined
..the entire Lincoln line
..the entire Volvo line
..the Avalon
..the Sienna
..the 4Runner
..the Highlander
..the Explorer
..the Fusion
..the Mustang
..the Malibu
it's the......
link and link (I didn't check all the job sites).
Join the team
If you compare the IS sale figure of this March to March 2005 then you'll know what I was talking about. Since in March 2005 the 1st generation IS was still on the market and its sale figure was pathetic. Although the current IS is not as hot as the 3er but is whole lot, and I mean WHOLE LOT, better than the original.
The only thing Lexus put out so far that is not worthy of the badge is the 1st gen IS IMO.
As for Lexus SUVs:
LX - super outdated, but the relief is coming this year.
GX - needs to move from truck-based to car-based.
RX - new model is coming either late this year or early next year but I think this is still the best selling luxury SUV in this country.
Overall, both Lexus and Toyota are doing just fine. Not great but fine.
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..... the Prius!
First, having sold a car or two in my day, the 1st quarter is nothing to bet your life on, as winter time (after the end of the year) is the slowest time in the auto industry, and sales in the Spring are consistently better. Tax refunds this month will spur sales, for example.
Prius had it's best month ever, approaching 20k. So demand hasn't slowed, has it? An early referendum, if you will.
Regarding the IS, the new G and 335i have come out within the last 6 months, stealing some thunder. The Lexus will pick up again when Lexus releases the coupe/convertible, or when they get a stick in the 350.
Tundra, as has been stated, is obviously gonna have a slow 1st quarter, with people waiting for the new Tundra, ordering delays, and lower selections of the old model. Happens with every redesign. This is not news. The 2nd quarter of this year will tell the real story, as Toyota is making pricing adjustments to the RC, and CrewMax is more widely available.
Scion is going through the same lull, as the new xD and xB wait in the wings for their release, which Scion fans are waiting for with baited breath!
Camry fleets sales are usually at or below 10%, so that still doesn't have a market effect. GM and Ford would be dead in the water if fleet sales were 10% or less!
Scion is a HUGE success, as Toyota struggles to keep sales DOWN, and there is no way to run down Scion, Lexus or Toyota sales unless you have an agenda.
I'm sure you can look at the landscape objectively and see that. Can't you? :confuse:
DrFill
I don't think I've ever heard anyone decrying the folly of the 401(K), except for people who put all their eggs in one basket by putting all their 401k savings into company stock (ie Enron). Hmmm, seems a lot like depending on one company to provide you're retirement 40 years down the road, which may or may not be still around.
If that company goes bust, you're out a chunk of your pension since the US gov'ts Pension Benefit Guaranty Corp. will only pay out a portion of what you're pension was supposed to be (and us taxpayers are on the hook for it). I'll take a 401K that I control and can take with me whatever happens any day. Add to that you have to trust your company enough to actually FUND your pension to begin with.
As far as 401K's not beating the S&P or Dow, you do know most plans will allow you to invest in index funds which in essense IS the index. If there is a problem with the 401k, it's that many people who rely on them for their retirement don't bother to take a few hours to educate themselves on how they work and what options they have, relying instead on HR people or 401k administrators to reccomend something.
I like the job where you get paid the full salary, 100k plus? for going to a central location and sitting around all day like the high school equivalent of DETENTION? The only thing I learned about detention was not to go there, what a mistake.
But you have to like the modern day, thank goodness for WI FI.
I wouldn't be surprised that within 10 years the pension program will seize to exist within major US corporations. Okay, maybe except the Microsoft, google, etc...
This is very true. We were under the NTCA 401K. At the beginning they invested in a variety of Fidelity Mutual Funds. When we were given the opportunity to move our money around we all did better than the NTCA folks. My 401K is doing very well. I have a big share in a fund that is consistent at 17% over the last 10 years. That is fair gain in my book. I will not take any out until forced at 70 to do so as my retirement from the Union is more than enough to live comfortably. I wish my children had as bright a future retirement as I have. Companies like Toyota have not benefited the American worker in a positive way. They have only slightly upgraded people from a service industry job. When you have better medical on welfare or in jail, than working something is wrong with society.
What is killing them is paying for retiree medical benefits. The companies agreed to this benefit when medical care was much less advanced than it is now, and people did not live as long. As late as the 1970s, a cancer diagnosis was usually a death sentence. Now there are all sorts of treatments to prolong life - but they are very expensive.
Knee and hip replacements - along with the resulting physical therapy - are now quite common, but I don't remember people talking about them much when I was growing up in the 1970s.
Couple these trends with people living longer, and GM and Ford are suddenly on the hook for some VERY large expenses.
As a matter of fact they have pulled part of their press release with all the sales figures off the web. Guess they did not want us telling the real story.
http://pressroom.toyota.com/Releases/View?id=TYT2007040316856
New models are doing great (gain in sale)
Old models are not doing so great (loss in sale) except the Corolla
Truck based SUVs are falling fast (4Runner, Sequoie, GX and LX)
Car based SUVs are doing mighty fine (Highlander and RAV4)
Which shouldn't be surprised by anybody.
However, overall Toyota has the best March ever so I think Toyota is doing just fine. Not great but fine.
Getting the right American car at the right price (with the aid of places like Edmunds.com) might be the right option for most folks, if this is the right time (for them).
Indeed with Toyota in so called "first place", this could solidify prices for those oem's not in "first place." Keep in mind GM was for a long time in "first place" until it was overwhelmingly apparent that it was no longer in... first place.
WRONG.
At this point, every Corolla sold is pure profit for Toyota. It is literally a money printing machine.
Also, Land Cruiser was never meant to be a volume model for Toyota. It serves as Toyota's halo model to emphasis the company's AWD and cross country heritage.
The real volume models for Toyota are:
Camry, Corolla, Highlander, RAV4, Avalon(semi), ES and RX. Maybe one can throw Tundra and Tacoma into this group as well but I am not sure. I also think the IS is starting to become a volume model for Lexus since it is currently the 2nd best selling sedan and overall 3rd(?) best selling vehicle.
As long as those models mentioned above are doing fine then Toyota is okay.
I read in passing, a Toyota takes app 21/22 hours of assembly (labor), at 30 per hour that is a min of $660. It is assembled in a factory (overhead) most of the parts are provided JIT and made by suppliers (cost of goods). Sure you can write down (depreciation) MOST (but not all) of a new plant ALMOST as a yearly expense, so..... !?
How's that?
Keep in mind the Corolla competes in the so called "small car" segment. This overal segment is a minority position of app 25% of the passenger vehicle fleet. What percentage of THAT percentage Toyota has, I will leave to others more in the know.
The current Corolla is already on the market longer than Toyota's original intention. So even though it is very "profitable" and the sale number keeps rising Toyota still needs to replace it with a new model ASAP. The dumbest thing an auto manufacturer can do is cutting back on R&D. We all know that it takes money to make money.
Power 2nd row seats is interesting, which should help 3rd-row seat comfort.
To be fully competitive with Mercedes GL and Caddy Escalade, a sub $60k price is reguired. Seems like a fine truck, but nothing for the competition to lose sleep over.
DrFill