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madsen

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In recent days, I have seen a lot of the usual negative comments about certain American motor producers. It appears that we are to believe that a certain product from a foreign manufacturer cleans itself vs. evil Aerotech that takes hours to clean. I have also read that some people are upset with the recent Aerotech temporary price increase--even though it brings Aerotech in line with the competition. And now there is a rumor that Cesaroni will offer their Canadian made product if we we turn in our American made hardware. As a public service--I am sharing the following information: INFLATION IS COMING--BIG TIME! Those of you who can remember Jimmy Carter--that was nothing. Think Vimar Republic. (If you so not know what the Vimar Republic was--thank the education system.) The United States is spending trillions that we do not have--we cannot borrow enough money from China. The result is inflation--our money will be worth less in the world market. When that happens (not if) a foreign motor producer--say in Canada--will be forced to charge more for its product. I have nothing against Cesaroni--I have never even seen a Cesaroni motor. But the reality is--before you trade in your Gorilla, Aerotech, etc. hardware--think about what Cesaroni will be forced to charge in 2 or 3 years of insane inflation in America. I will not get political--it is certainly not the faullt of Cesaroni. However, the reality is that foreign goods will get very expensive in the next few years--so there. I just ordered a spare 38/720 and a spare 54/1080 motor--Rouse Tech--I just hope they include the self cleaning option.
 

MarkII

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Man, this Aerotech versus CTI thing is really going off the cliff. It reminds me of....




MarkII
 
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fox_racing_guy

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When I first read this I thought the Paser & Gremlin might be comming back into production :y:
 

billspad

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When I was in school it was called the Weimar Republic. Let me clarify that. I wasn't in school when the Weimar Republic existed. That's what they called it in history class when I was in school.


I had a 75 Pacer. It was great car except for the gas mileage and the dismal trade in value.
 

gpoehlein

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I had a 75 Pacer. It was great car except for the gas mileage and the dismal trade in value.
I always thought it looked like someone fattened up a Gremlin and then sat on it! ;)

And don't forget the ever-popular Pinto (complete with exploding gas tank) :p
 

madsen

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I had a 75 Pacer. It was great car except for the gas mileage and the dismal trade in value.
I had a violet Gremlin. It was the greatest car on the face of the earth. It could carry anything. And it got great mileage.
 

sunward

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.... And now there is a rumor that Cesaroni will offer their Canadian made product if we we turn in our American made hardware. ....
Please be careful on rumors.

CTI doesn't need to exchange hardware. Just cross CTI certify motors for use in Aerotech hardware. Which has been done.
 

stickershock23

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I think there is more to this than just price.

I buy for quality and customer service! honestly a few bucks difference really means nothing to me.:D
 

als57

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I have also read that some people are upset with the recent Aerotech temporary price increase--even though it brings Aerotech in line with the competition. However, the reality is that foreign goods will get very expensive in the next few years--so there. I just ordered a spare 38/720 and a spare 54/1080 motor--Rouse Tech--I just hope they include the self cleaning option.
Gee my dealer forgot to tell me it was a temporary price increase. I guess I am anoyed that the price of H180W has gone from $22.95 to $27.50 in just over a year.

BTW comment about bringing prices in line with others would make me ask what are you bringing to the table? A bag of parts requiring assembly or a module requiring 1 adjustment. Most folks seem to appreciate less work for the same $. The quick clean up isn't a bad selling point for some. And lets not even get started on the CTI spacers where 2 cases and 2 spacers can do the work of 6 cases.

I'm glad to see your stimulating the economy.

As usuall folks will vote with their money. If AT does reduce their prices ; then I expect I'll start buying their product again. But there are other fish in the ocean. For now I'm having fun with the new Pro29 motors. Your mileage may vary.

Al
 

Uncrichie

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Bob, I have to join in. I had a 74' metallic green Javelin with a white vinyl roof and a full length white tri-stripe on the side full length of the car. We also had a 76' Gremlin Reddish Brown with a gold side stripe. Both vehicles lasted longer than 10 years til rust ate them up. With lots of body work I have no doubt that both would/might be running today. The Javelin was a small 8 and the Gremlin was a straight 6. I miss both of them!
 

Threemorewishes

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My dad had a blue Ford Pinto and sold it the day before the report came out about the exploding gas tanks. The buyer never complained but then again never came back to do it...hummmm.
 

bobkrech

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Economics 101
  • Price is what folks will pay for a product.
  • Cost is the expenditure required to make and sell a product.
  • Companies are in business to make money
  • Companies that loose money go out of business
  • Price must exceed cost
For the consumer
  1. If you can't afford the price, don't play.
  2. If folks won't pay the price, the product goes away.
  3. If this occurs for a while, the manufacturer goes away.
For the manufacturer
  1. Price must exceed cost, after all, it's a business, not a hobby.
  2. If your cost is greater than the price, don't make/sell or change how you do business to reduce your cost.
  3. If you fail to reduce your costs, your customers go away.
Simplified High Power Motor Market Analysis
  1. HPR Motor Market: < 5,000 ==> < 16 per 1,000,000 population ==> small
  2. Estimated Sales: $5,000,000 ==> $1,000 per person on average
  3. Manufacturers: > 10 ==> $500,000 sales per company on average
Estimated Cost Breakdown Structure for Average Business
  • $100,000 - 20% Materials
  • $100,000 - 20% Labor
  • $100,000 - 20% Advertising/Distribution
  • $100,000 - 20% Overhead
  • $100,000 - 20% Pretax Profit or Reinvestment
Of course there is no average manufacturer, but folks here should be smart enough to do the math.
  • No manufacturer in this hobby is getting rich.
  • The market is not large enough.
  • If you want to play, you have to pay, or your playthings will go away!
Bob
 
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bob jablonski

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Bob, I have to join in. I had a 74' metallic green Javelin with a white vinyl roof and a full length white tri-stripe on the side full length of the car. We also had a 76' Gremlin Reddish Brown with a gold side stripe. Both vehicles lasted longer than 10 years til rust ate them up. With lots of body work I have no doubt that both would/might be running today. The Javelin was a small 8 and the Gremlin was a straight 6. I miss both of them!
My Black 78 Hornet AMX was one of about 900 that came factory direct with a 304 and Levi seats. Add a Eddelbrock intake 4 BBL carb dual exhaust and a cam what do you get (over 350 HP). Wish I still had that car. My Javelin was a 6 cyl.
Mr. Bob
 

als57

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Economics 101
Bob

I agree ; but you need to add in the factor of disposable income.

Lets face it the economy is in the crapper right now.

Most folks have less disposable income than they did a year ago.

Hobbies survive on disposable income.

This means its not a good time to be raising prices and having your customers go elsewhere.


In the case of a certain American manufacturer. Lets hope it was a temporary price increase as was mentioned. For now I'm trying some new things that are the same price or cheaper.


Al
 

Garoq

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I agree ; but you need to add in the factor of disposable income.

Lets face it the economy is in the crapper right now.

Most folks have less disposable income than they did a year ago.

Hobbies survive on disposable income.

This means its not a good time to be raising prices and having your customers go elsewhere.


In the case of a certain American manufacturer. Lets hope it was a temporary price increase as was mentioned. For now I'm trying some new things that are the same price or cheaper.


Al
We should have some interesting news to report next week.

I'll leave it at that. ;)
 

blackjack2564

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Ummmm............ for all those complaining about Motor prices.......


Wildman is having his 35% off AT fall sale on motors.....this ones hard to beat.....Sooooo

.........Buy American in 2009 while the prices are from 2000.
Now you got nothing to B#$%ch about!

And don't forget the best deal of all The KBA by AT ...at retail they are already 25 % cheaper than other loads for the same cases. Hard to beat a Mojave green J for 30.00 and a Mojave green L motor for 118.00!

And after this $uper $sale we will all need some new rockets to fly these motors in..............


I think if we all bug him enough....we can talk Wildman into some kind of "cash for clunkers" deal on rockets. Maybe trade in your old paper or phenolic lawn dart for a cash credit on a nice new shiny fiberglass one.

What ya think? When you call him ask about the "cash for lawndarts" federally backed incentive program. I'm dead now.
 
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sylvie369

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I don't know how much more good news from Gary and Tim my credit cards can take.
 

troj

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What ya think? When you call him ask about the "cash for lawndarts" federally backed incentive program. I'm dead now.
Shouldn't that be Cash for CATOs?

-Kevin

(Hey, Jim? If it involves picking on Tim, you know I'm in!)
 

bobkrech

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It's time for a reality check. Here's an over simplified objective look at the current status.



Employment
  • On a personal, micro economics level, employment is a delta function, you either have a job or you don't
  • In bad economic times, 9 out of 10 folks who want to work are working
  • In good economic times, 19 out of 20 folks who want to work are working
  • The macro economic difference between a bad and good times is 5%, or 1 in 20 more folks working
High Power Rocketry
  • This is a niche hobby
  • It is not a poor man's hobby
  • If you can't afford the price, you can't play
  • Assuming a normal population distribution
    • 19 out of 20 folks should still be in the hobby
    • sales should only be down 5%
How the Economy Effects the Business
  • Before the recession the high power motor market was saturated
    • No one making money
  • With the recession
    • Sales down estimated 5%
    • Fixed costs remain the same
    • Variable costs go up estimated 10%
  • What happens to maintain revenue
    • Prices go up estimated 15% to cover costs
    • Manufacturer changes business model to reduce cost 15% and hold price
    • A combination of the above is the norm
    • If nothing changes, one or more marginal manufacturers go out of business
Conclusion
  • It's a net sum zero game
  • All the old rules apply
  • That's life and death in the business cycle
Bob
 
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Garoq

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It's time for a reality check. Here's an over simplified objective look at the current status.



Employment
  • On a personal, micro economics level, employment is a delta function, you either have a job or you don't
  • In bad economic times, 9 out of 10 folks who want to work are working
  • In good economic times, 19 out of 20 folks who want to work are working
  • The macro economic difference between a bad and good times is 5%, or 1 in 20 more folks working
High Power Rocketry
  • This is a niche hobby
  • It is not a poor man's hobby
  • If you can't afford the price, you can't play
  • Assuming a normal population distribution
    • 19 out of 20 folks should still be in the hobby
    • sales should only be down 5%
How the Economy Effects the Business
  • Before the recession the high power motor market was saturated
    • No one making money
  • With the recession
    • Sales down estimated 5%
    • Fixed costs remain the same
    • Variable costs go up estimated 10%
  • What happens to maintain revenue
    • Prices go up estimated 15% to cover costs
    • Manufacturer changes business model to reduce cost 15% and hold price
    • A combination of the above is the norm
    • If nothing changes, one or more marginal manufacturers go out of business
Conclusion
  • It's a net sum zero game
  • All the old rules apply
  • That's life and death in the business cycle
Bob
Pretty darn close, Bob.
 

blackjack2564

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Shouldn't that be Cash for CATOs?

-Kevin

(Hey, Jim? If it involves picking on Tim, you know I'm in!)

OK.... that too "Cash for CATOS"

I kinda think "Rubles for Rockets" has a nice ring to it.
 

bobkrech

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Hey!

You never told me you went to business school!!! :D
Business School? Not.

Mostly on the job training, and learning by doing, and getting the job done and out the door whether it's your job function or not, sort of a corporate "Dirty Harry" role. Exactly one college course in economics, a good math background, an analytical mind, knowing how to research a subject, and a ration of common sense.

You don't succeed in a small employee-owned R&D consulting business for 33 years if you don't understand basic rule: You have to consistently deliver a quality product to your customers on-time and within budget to meet your corporate revenue, payroll, overhead, G&A and profit goals. If you bat 0.300 in the majors, you're a star. In my business there's no room for error, if you're wrong, you're out.

Bob
 

sunward

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...The macro economic difference between a bad and good times is 5%, or 1 in 20 more folks working...
Uhm, no. Unemployment may mean 1 in 20 or so are not working. But you don't take into account those working but have lower wages (either cutbacks or less hours) and those afraid they may lose their job and will reduce spending accordingly.

....sales should only be down 5%....
No sales would be down even more. In addition to those not working, others will cut back on spending.

...Variable costs go up estimated 10%
snip
Prices go up estimated 15% to cover costs...
Why do variable costs go up 15%? And who is currently able to raise prices 15% in this market at one time?

....Manufacturer changes business model to reduce cost 15% and hold price....
?

Please let me know which manufacturer ( in any industry) is able to reduce costs 15% overnight and also raise their retail prices 15% at the same time?
 
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