Re: [Leica] Explanation high production cost

[Dominique PELLISSIER <pelliss@droit-eco.u-nancy.fr>]

Many causes explain the high costs of production. General causes :
1=B0) The high level of wage costs (including social costs) in Germany.
2=B0) The strength of the DEM since 1969 against the USD and the JPY.
Now specific causes :
3=B0) the economies of scale are not a problem for Leica Camera. The
production is tuned up in order to reach the break even point. But if the
production drops suddenly below (as it is the case now), the unit costs
grow rapidly.
4=B0)The lack of productivity : it is difficult to raise productivity wit=
h a
process where human factors are prevailing. QC is the priority.
5=B0) New products raise the costs but they will boost the sales and norm=
ally
profits.
6=B0) Japanese competitors are (often? Always?) unfair. For instance, the
losses of Minolta should have lead to bankrupcy with the US standarts of
corporate finance.Or the retail prices of japanese photographic products
are anormally low, especially in the USA.Fortunately the financial crisis
in Japan will lead to a best transparency of the japanese
financial-industrial system. But there'll be dead bodies on the economic
battle of field. And Leica will be still alive.