VP Of OEM Explains Supply Chain Issues...

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6/17/2021 4:57 AM

CLICK HERE for a short video from a VP of an OEM on supply chain issues.
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6/17/2021 5:41 AM
Edited Date/Time: 6/17/2021 5:41 AM

The company I work for (as like all others) over the years have moved many parts to outside vendors....(not necessarily just outside the country).

I expect to see a shift to now insource vs outsource. Better to rely on yourself, versus some chumps at a supplier..

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6/17/2021 6:32 AM

Demand went up, supply went down.

June of last year was arguably the largest month in powersports history. Everyone will be down this month compared to last year. Supply issues are not helping the matter. I just hope that the customers walking into dealers with money to burn don't get discouraged and start spending their money elsewhere outside of the PS industry.

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6/17/2021 10:01 AM

We currently have trucks down anywhere from a week to a month, sometimes longer, waiting on harnesses, EGR coolers, turbos and all sorts of crap. Just can't get anything from the OEMs right now and so many things are outsourced in the trucking world it doesn't help matters at all.

Volvo workers going on strike isn't even our issue with parts, its all the shit shut down across the world and boats stuck in ports for days, along with people just not wanting to go back to work for all sorts of reasons.

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6/17/2021 10:02 AM

mikie44 wrote:

Demand went up, supply went down.

June of last year was arguably the largest month in powersports history. Everyone will be ...more

This is what seperates good dealers from great dealers. Depending on your region April was the best month for powersports sales. So far our 2021 has beaten 2020 every month this year. Capitaizing on new markets, detailed marketing, and creating inventory where there is none. Nobody wants to walk into an empty showroom.

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6/17/2021 10:13 AM
Edited Date/Time: 6/17/2021 10:15 AM

Boat industry parts are slow also. Here is a good one. A 15” oil dipstick for a mercruiser, basically a 350 GM was $100 at marina. He gave me part number and web site of his supplier to buy it direct for $50. Still way overpriced but appreciated his honesty.

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6/17/2021 10:16 AM

You are correct, 1200/mo. And it still isn't keeping anyone from going to work. Well, the majority for that matter. There are always going to be those that buck a system, but they don't make up the majority. The days of Batchelor degree required for a job that pays $10/hr are over. These companies are going to have to learn the hard way or pony up on some actual wages. And for the love of God, stop dangling Healthcare in our faces like it's some kind of reward.

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6/17/2021 10:30 AM

40acres wrote:

You are correct, 1200/mo. And it still isn't keeping anyone from going to work. Well, the majority for that matter. There are ...more

Just a couple of simple questions for you --- in reference to your quote on "companies need to pony up some actual wages" ---Will you be ok when your Big Mac and fries cost you $ 17 because Mickey D's are paying their High School help $ 15/hr ??

And hasn't HealthCare always been considered a "Benefit" whenever an employer presented you with a Hiring Proposal ?
Has company provided HealthCare become an "Entitled Right" ?? I know in my past I have made career decisions based on the better Benefits packages when the Salaries were close. So you feel that should be a given??

Not being a smart ass , just wondering if you have thought all of this thru -----

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6/17/2021 10:37 AM

It would slightly concern me to buy a machine put together in an ad hoc out of order procedure.

This is what companies get for relying on overseas parts. Japanese bikes don't, the US steel and aluminum manufacturers I work with don't, and they're not having a problem.

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6/17/2021 10:41 AM

OldPro277 wrote:

Just a couple of simple questions for you --- in reference to your quote on "companies need to pony up some actual wages" ...more

Mcdonald's already pays $15 minimum in places like Australia and their big mac meal price isn't much more than ours. Simple questions should be based on simple truths.

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6/17/2021 10:42 AM

sandhills wrote:

It would slightly concern me to buy a machine put together in an ad hoc out of order procedure.

This is what companies get ...more

I'm not an economist or in the industry, but if every company in the USA hadn't out-sourced to other countries and we actually made anything here anymore, the situation might be different. 'Course companies had to do so to remain competitive.

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“There are only three sports: bullfighting, motor racing, and mountaineering; all the rest are merely games.” ― Ernest Hemingway

6/17/2021 10:45 AM

OldPro277 wrote:

Just a couple of simple questions for you --- in reference to your quote on "companies need to pony up some actual wages" ...more

How much of a McDonald's restaurant overhead is labor? Would a 100% increase in labor component rest in a 300% increase in price? This assumes food price, rent, insurance, franchise fees, etc are constant.

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6/17/2021 10:52 AM
Edited Date/Time: 6/17/2021 10:54 AM

Moto Nomad wrote:

I'm not an economist or in the industry, but if every company in the USA hadn't out-sourced to other countries and we actually ...more

To be clear the US manufacturing companies I work with aren't moto industry either. But they make parts in the US out of US metal stock and components and so aren't caught up in the shipping crunch.

I feel like it's a good time to rub that in the faces of the global supply chain manufacturers.

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6/17/2021 11:08 AM

early wrote:

How much of a McDonald's restaurant overhead is labor? Would a 100% increase in labor component rest in a 300% increase in ...more

Am I possibly exaggerating ? Could be, but I'm basing my thoughts on one of local gas station giants in western PA that are widely known for their excellent food. They recently upped their starting wages substantially ( to a great response by the local media) and within days all of the food items skyrocketed. A hoagie formerly priced at 9.99 was changed to 14.99. These figures were given to me by a Manager of one the closest locations that I sold a vehicle to ,so I need to assume they are telling me the straight shit.

But...... if any of you think that taking a $10/hour dishwasher and magically increasing them to $ 15/hr along with all the other employees in a given restaurant receiving a similar "bump" isn't going to have any drastic effect on your food prices, then you A.) Have never owned or managed a retail business , or B.) Can not grasp the simple concept of profit margins.

Its going to start a runaway----- and not a good kind

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6/17/2021 11:09 AM

40acres wrote:

You are correct, 1200/mo. And it still isn't keeping anyone from going to work. Well, the majority for that matter. There are ...more

OldPro277 wrote:

Just a couple of simple questions for you --- in reference to your quote on "companies need to pony up some actual wages" ...more

early wrote:

How much of a McDonald's restaurant overhead is labor? Would a 100% increase in labor component rest in a 300% increase in ...more

Good question. As a small concrete contractor wages are about 50% of my expenses.

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6/17/2021 11:20 AM
Edited Date/Time: 6/17/2021 11:21 AM

Darrin Willis wrote:

Good question. As a small concrete contractor wages are about 50% of my expenses.

Darrin-- I'm sure your guys make a decent wage ,but imagine if you bump everyone of your guys a modest 15%-20% . Are you going to be able to maintain your current prices to your customers ? I'm thinking not,correct ?

And FWIW, my expenses here at the store are dominated by payroll ( 62%) however we are not the norm as we own all of our vehicles without any floorplanning expenses etc. and our people are paid very,very well.

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6/17/2021 11:31 AM

OldPro277 wrote:

Am I possibly exaggerating ? Could be, but I'm basing my thoughts on one of local gas station giants in western PA that are ...more

Do you think the wage market will come down when federal unemployment stops at the end of the summer? It will be interesting to see. Food prices at Sheetz went up significantly about 2 years ago, I used to go there for lunch regularly, then not so much when the bill went from $8 to $11, this was way before Covid. Recently Giant Eagle has made a big push into Sheetz's market. Appreciate the use of hoagie btw.

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6/17/2021 11:33 AM

early wrote:

How much of a McDonald's restaurant overhead is labor? Would a 100% increase in labor component rest in a 300% increase in ...more

Darrin Willis wrote:

Good question. As a small concrete contractor wages are about 50% of my expenses.

OldPro277 wrote:

Darrin-- I'm sure your guys make a decent wage ,but imagine if you bump everyone of your guys a modest 15%-20% . Are you going ...more

Why would he bump up his wages to his workers if they’re making good wages now? We’re taking minimum wage people.

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6/17/2021 11:47 AM

Video sure seems like a marketing stunt to try and stop or at least slow lost sales. My guess is BRP is losing sales due to low volume output so they are hoping getting a message out like this will get people to wait on a purchase instead of going to a competitor.

Offroad products are flying off the lots right now, so whoever is able to keep the dealers stocked wins, not who actually makes the best product. Which is a very weird thing brought up by all these supply/demand issues.

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6/17/2021 11:52 AM

Maybe local dealers will now understand why it makes sense to stock the parts necessary to keep their customers machines running instead of telling them "I can order that for you, be here in 5 days". Sure it costs them some overhead to keep the parts shelves full, but at least they will still retain customers.

I stopped going to my local KTM dealer prior to the supply crunch for this very reason. Of course the OEM reps bear some of the responsibility, they should have a check list of consumable parts for every model of bike they sell and make sure their dealers have these things.

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6/17/2021 12:05 PM

I'm not an expert, but this is what comes to my mind when people mention increasing wages like it's a very simple thing to do.

For the majority of people in the United States, our retirment is dependent upon the performance of our 401k's and other investment portfolios. The majority of those portfolios contain at least a reasonable amount of domestic stocks. The performace of those stocks is dependent upon the profitability of the companies themselves.

Increased wages, without the costs then being passed directly back to consumers, is either offset by growth in the business or the profitability of the business itself goes down. In theory, if the profitability of hundreds of businesses in your portfolio is negatively impacted, then that can have a pretty detrimental impact to your portfolio and overall retirement.

So on one hand you have more money in your pocket today, but that money is then just used to cover the increased prices on everything you are already buying, or your retirment is negatively impacted.

Maybe I'm over thinking things or there are variables I'm not considering. Either of which is completely possible. However, I don't think it's as simple as "These companies should just start paying real wages", either.

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6/17/2021 12:07 PM

early wrote:

Do you think the wage market will come down when federal unemployment stops at the end of the summer? It will be interesting ...more

Thats who I was speaking of (Sheetz) They recently upped their "summer" wages to $ 17/ hr here. Not sure where or how all of this is going to end.

My wife is a GM of a local Country Club and can't get any of her people to come back with all the local restaurants offering "signing"bonuses and super inflated hourly wages. The owner of her CC is contemplating not re-opening because if she increases wages to those ridiculous amounts they'll be losing money monthly, at least based on 2019's sales numbers. And another 3 local restaurants (1 high end) have already closed for good because of lack of employees and substantially higher costs. So how is any of this good ??

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6/17/2021 12:09 PM

Darrin Willis wrote:

Good question. As a small concrete contractor wages are about 50% of my expenses.

OldPro277 wrote:

Darrin-- I'm sure your guys make a decent wage ,but imagine if you bump everyone of your guys a modest 15%-20% . Are you going ...more

jjavaman wrote:

Why would he bump up his wages to his workers if they’re making good wages now? We’re taking minimum wage people.

I'm making a point dude.. regardless of the wages, if you increase all of your employees without raising your end cost, you will soon have no business for your employees to draw checks from ---- getting it at all ???

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6/17/2021 1:55 PM

40acres wrote:

You are correct, 1200/mo. And it still isn't keeping anyone from going to work. Well, the majority for that matter. There are ...more

Affordable health care is a benefit not a reward and its a huge benefit so company's use it as a recruiting tool. Years ago I was paying $1400 a month for a family of four for just health insurance and it wasn't even good insurance and it was going to go up. I got a part time job at fedex and the benefits package was huge. Health care, dental, vision, life, disability, stock, 401K and other benefits for about $300 a month just for 16 hours a week of my time. Benefits are just that a benefit to work for a company and if you retailed it out on the free market it costs a fraction through the company. some packages would add 30k to your salary per year if you look at it that way.

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Ed Johnson

6/17/2021 2:57 PM

40acres wrote:

You are correct, 1200/mo. And it still isn't keeping anyone from going to work. Well, the majority for that matter. There are ...more

lostboy819 wrote:

Affordable health care is a benefit not a reward and its a huge benefit so company's use it as a recruiting tool. Years ago I ...more

Somebody that knows what’s up. whistling

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6/17/2021 3:15 PM

OldPro..... (Sarcasm alert) What are you still doing in W PA?? w00t You are not thinking like the locals there! You are making too much sense!! I grew up in W PA and know exactly where Avonmore is. Went to school not far from there. It is a shame that the younger folks think they deserve everything and at no cost. No one is teaching them simple economics anymore. I'm not sure I'll live long enough for them to "get it", but I hope so. Keep fighting the good fight.... and if you have enough money, go dawn ta Sheetz for a Hoagie tonight.... just don't kick any paper towel dispensers off the wall!!

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6/17/2021 3:19 PM

40acres wrote:

You are correct, 1200/mo. And it still isn't keeping anyone from going to work. Well, the majority for that matter. There are ...more

OldPro277 wrote:

Just a couple of simple questions for you --- in reference to your quote on "companies need to pony up some actual wages" ...more

sandhills wrote:

Mcdonald's already pays $15 minimum in places like Australia and their big mac meal price isn't much more than ours. Simple ...more

And your asinine responses should be researched fully prior to you spouting off to prevent you from embarrassing yourself . Big Mac meals are $ 11.65 in Australia. Our local McD’s —-$ 5.99. So now what...........????

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6/17/2021 3:21 PM

500 Mike wrote:

OldPro..... (Sarcasm alert) What are you still doing in W PA?? w00t You are not thinking like the locals there! You are making too ...more

Love it !!! And only a true WPa’er will get the towel dispenser line ! Where’d you go to school ?

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6/17/2021 3:34 PM

OldPro277 wrote:

Just a couple of simple questions for you --- in reference to your quote on "companies need to pony up some actual wages" ...more

sandhills wrote:

Mcdonald's already pays $15 minimum in places like Australia and their big mac meal price isn't much more than ours. Simple ...more

OldPro277 wrote:

And your asinine responses should be researched fully prior to you spouting off to prevent you from embarrassing yourself . ...more

The Aussie dollar is about 75 cents US, so it's still a bit higher than the US price

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6/17/2021 3:36 PM

OldPro277 wrote:

Love it !!! And only a true WPa’er will get the towel dispenser line ! Where’d you go to school ?

Kiski Area HS. I thought you'd get the towel dispenser reference, otherwise I was going to have to ask for ID! smile

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