Caterpillar says health care bill would cost it 100M

[IndyColtsFan]

I don't. You have nothing to back that up.

So your position is that they will just spend $100 million and that's it?

 

[IndyColtsFan]

Exactly. If it were as simple as that, they would already be getting that $100 million dollars...

The difference is that they have the $100 million now and they won't shortly. It isn't a question of magically gaining another $100 million now; it is a question of having a $100 million expense added to your books. Now, where do you think they might make the money up? Hint -- it won't be cutting loose executives.

I may very well be wrong and hope I am.

 

[Hacp]

The difference is that they have the $100 million now and they won't shortly. It isn't a question of magically gaining another $100 million now; it is a question of having a $100 million expense added to your books. Now, where do you think they might make the money up? Hint -- it won't be cutting loose executives.

I may very well be wrong and hope I am. I admit I am speculating.

They're probably going to outsource more American jobs to China to make up the difference. Good Job Obama.

 

[theeedude]

The difference is that they have the $100 million now and they won't shortly. It isn't a question of magically gaining another $100 million now; it is a question of having a $100 million expense added to your books. Now, where do you think they might make the money up? Hint -- it won't be cutting loose executives.

I may very well be wrong and hope I am. I admit I am speculating.

You are speculating. You are assuming they are going to make the money up. That is a speculation that has no proof.

 

[jpeyton]

They're probably going to outsource more American jobs to China to make up the difference. Good Job Obama.

Let's hope so. The Chinese can make some damn fine construction equipment.

 

[IndyColtsFan]

They're probably going to outsource more American jobs to China to make up the difference. Good Job Obama.

Well, that was my point. The usual suspects can scream:

"Oh noes, they're going from 3.5 billion to 3.4 billion" and trip up the sarcasm meters, but my bet is that companies in Caterpillar's position will do their best to get rid of that new, $100 million expense.

I hope to god I am wrong, but I may not be. My point is certainly as valid as those dismissing this as corporate whining, however.

 

[BlahBlahYouToo]

CAT is up today. Even their investors can smell the BS in that argument.

you're basing this on a stock price.
.....

 

[spidey07]

You are speculating. You are assuming they are going to make the money up. That is a speculation that has no proof.

Wow. You totally lack basic business sense. If a company has an unexpected 100M expense they are going to cut costs to keep net profit as close to the same as possible. That means cutting 100M in expense elsewhere.

aka, jobs.

 

[IndyColtsFan]

You are speculating. You are assuming they are going to make the money up. That is a speculation that has no proof.

I never claimed that it wasn't just my opinion (though it might have seemed that way), as I am not in Peoria to initiate a mind-meld with Caterpillar's management to read their thoughts. You, on the other hand, also have no proof that I am wrong. 🙂 And I do hope I am very, very wrong. I have worked in business for a lot of years and I am betting that some expenses are going to be cut to make up all or part of this new expense.

 

[soulcougher73]

Where do you suppose they will make up that $100 million? They will get it back, believe me.

Oh i know the greedy bastages will get it back somehow. That really wasnt my point though.

 

[theeedude]

I never claimed that it wasn't just my opinion (though it might have seemed that way), as I am not in Peoria to initiate a mind-meld with Caterpillar's management to read their thoughts. You, on the other hand, also have no proof that I am wrong. 🙂 And I do hope I am very, very wrong. I have worked in business for a lot of years and I am betting that some expenses are going to be cut to make up all or part of this new expense.

I never claimed CAT won't make that money somehow. You claimed they will.

 

[Throckmorton]

Wow. You totally lack basic business sense. If a company has an unexpected 100M expense they are going to cut costs to keep net profit as close to the same as possible. That means cutting 100M in expense elsewhere.

aka, jobs.

Uhh why would they not cut those jobs regardless and make $100 mil in profit?

I'll tell you why. The reason an employer employs someone is because it's profitable to do so. A job is business, not charity.

 

[nonlnear]

The difference is that they have the $100 million now and they won't shortly. It isn't a question of magically gaining another $100 million now; it is a question of having a $100 million expense added to your books. Now, where do you think they might make the money up? Hint -- it won't be cutting loose executives.

I may very well be wrong and hope I am.

That's a little better. It's important to be clear about things like this. It's the leftist collectivists who push the ideology that taking money from corporations only inflicts "virtual" damage. The line from the right that "everything must be made up for somehow" is quite a different concept, what with it being grounded in reality and all! If one isn't careful with phrasing it might be construed that you were saying that corporations have the magical ability to conjure up whatever money the government demands of them, thereby justifying the claim that it is moral for the state to do so.

 

[IndyColtsFan]

I never claimed CAT won't make that money somehow. You claimed they will.

Yes, I did make my claim, and it is my opinion. Companies don't suddenly absorb $100 million expenses and say to themselves "Oh well, that's the way it is." Maybe I am wrong -- in fact, let's hope I am.

 

[IndyColtsFan]

That's a little better. It's important to be clear about things like this. It's the leftist collectivists who push the ideology that taking money from corporations only inflicts "virtual" damage. The line from the right that "everything must be made up for somehow" is quite a different concept, what with it being grounded in reality and all! If one isn't careful with phrasing it might be construed that you were saying that corporations have the magical ability to conjure up whatever money the government demands of them, thereby justifying the claim that it is moral for the state to do so.

Yeah, sorry, I didn't word it very clearly, you're right.

 

[theeedude]

Yes, I did make my claim, and it is my opinion. Companies don't suddenly absorb $100 million expenses and say to themselves "Oh well, that's the way it is." Maybe I am wrong -- in fact, let's hope I am.

Companies work to maximize profits. If they could get an extra $100M somewhere now, they already would.

 

[IndyColtsFan]

Companies work to maximize profits. If they could get an extra $100M somewhere now, they already would.

<sigh>

And how do companies maximize profits? What do companies do when they are suddenly hit with huge new, previously unanticipated expenses? Do they just say "Oh well, it is just $100 million" or do they say "Time to examine our business plan and model to see what we can do to trim out $100 million in expenses."

Do you seriously think Caterpillar will pay the $100 million and won't do anything else to react? You don't think, for example, that any borderline businesses be closed to recoup some of that money? You don't think that is possible? Companies live quarter to quarter and are very reactionary. It is unfortunate but true.

EDIT: And in case you missed it, from the article:

A letter Thursday to President Barack Obama and members of Congress signed by more than 130 economists predicted the legislation would discourage companies from hiring more workers and would cause reduced hours and wages for those already employed.

It looks like they agree with me. 🙂

 

[theeedude]

<sigh>

And how do companies maximize profits? What do companies do when they are suddenly hit with huge new, previously unanticipated expenses? Do they just say "Oh well, it is just $100 million" or do they say "Time to examine our business plan and model to see what we can do to trim out $100 million in expenses."

Do you seriously think Caterpillar will pay the $100 million and won't do anything else to react? You don't think, for example, that any borderline businesses they might be closed to recoup some of that money? You don't think that is possible?

Borderline businesses are either closed or they are not closed based on their business prospects and performance. Everything is possible. If CAT could trim $100 in expenses without sacrificing business, they would do it already. It's not like they need health care as excuse to make $100M more than they would otherwise.

 

[Hacp]

Companies work to maximize profits. If they could get an extra $100M somewhere now, they already would.

I agree, but if there is an unexpected expense of 100 million that the company can 100% avoid by moving to another country, then you're looking at something totally different.

 

[theeedude]

<sigh>

And how do companies maximize profits? What do companies do when they are suddenly hit with huge new, previously unanticipated expenses? Do they just say "Oh well, it is just $100 million" or do they say "Time to examine our business plan and model to see what we can do to trim out $100 million in expenses."

Do you seriously think Caterpillar will pay the $100 million and won't do anything else to react? You don't think, for example, that any borderline businesses they might be closed to recoup some of that money? You don't think that is possible? Companies live quarter to quarter and are very reactionary. It is unfortunate but true.

EDIT: And in case you missed it, from the article:



It looks like they agree with me. 🙂

So? There are a lot of economists out there, you can get 130 to sign almost anything.

 

[Throckmorton]

In the 4th quarter of 2009 Caterpillar made 232 million in profit. So they probably make a billion in profit per year. PROFIT

If they choose to lay people off for the $100 mil, they are doing that in favor of simply losing a small percentage of profit. It would be a strange thing if they did that, considering their employees are who they depend on for making those profits in the first place.

 

[IndyColtsFan]

I agree, but if there is an unexpected expense of 100 million that the company can 100&#37; avoid by moving to another country, then you're looking at something totally different.

That is exactly my point. I don't believe I ever stated exactly what Caterpillar would do, but I did state they would probably do something.

 

[spidey07]

Borderline businesses are either closed or they are not closed based on their business prospects and performance. Everything is possible. If CAT could trim $100 in expenses without sacrificing business, they would do it already. It's not like they need health care as excuse to make $100M more than they would otherwise.

You're being purposefully obtuse or you really are just that stupid.

Let's say you make 100 grand a year and your expenses are 95K a year. Government just sent you a bill payable immediately for 10K.

What you gonna do? Pay it and cut expenses elsewhere like the permanent expense of an employee.

 

[Hacp]

Borderline businesses are either closed or they are not closed based on their business prospects and performance. Everything is possible. If CAT could trim $100 in expenses without sacrificing business, they would do it already. It's not like they need health care as excuse to make $100M more than they would otherwise.

Ok you are confusing something here. Lets say you have two work forces. Work force A and work force B. They both cost the same to hire, so it makes no difference to the company whether it hires from pool A or pool b. Suddenly, the cost to hire work force A rises by 100 million. Now, it is more desirable to hire work force B.

 

[shiner]

In the 4th quarter of 2009 Caterpillar made 232 million in profit. So they probably make a billion in profit per year. PROFIT

Profit bad, Hulk smash?