The unraveling of Ford, General Motors and Chrysler have become lessons in how not to manage a company. Although the situation for each corporation is different, here are some of the shared reasons why car sales statistics are falling and the big 3 US automakers are losing money.

High Labor Costs

Chief among them are the labor laws and costs. The three companies all have powerful unions and they have exercised great power during negotiations. As such, workers for Ford, GM and Chrysler make more dollars per hour than in most other companies.

In addition they also have extensive health coverage. It’s been estimated that GM spends over $1,600 per vehicle on health care alone.

It is also worth pointing out that GM has an extensive retirement program. What this means is that the retirement pay for workers are huge. This doesn’t even include health care coverage for active and retired workers.

Another reason why the big 3 US automakers are losing money are labor laws. For example, paid holidays, line relief and other measures total more than $1.000 per car. There is also a law stating that when a factory shuts down, the car company has to pay them about 90 percent of wages.

Large Bonuses

The labor unions aren’t the only ones to blame. The CEOs and executives also gave themselves large bonuses. As with the labor unions, this practice was acceptable when the companies were making money.

It can be argued that the CEOs and labor leaders couldn’t have foreseen the problem. However, their penchant for fat bonuses and overly generous labor benefits is what is making it difficult for the car companies to get bailout funds. This is one reason why the big 3 US automakers are losing money.

These bailout funds come at taxpayers’ expense, and understandably don’t feel like giving aid to these CEOs.

Foreign Competition

Other problems stemmed from competition overseas notably Japan. Unlike the big 3, Japanese automakers were able to create fuel efficient and cost effective cars.

During the 50s to the 60s, US car companies built large gas guzzling vehicles. It was acceptable then. Fuel prices were at reasonable levels back then. During the 1970s however, the oil crisis hit several countries, including America. Industry observers point out that GM, Ford and Chrysler should have learned their lessons there.

They didn’t. Instead the US car companies continued to make gas guzzlers, all the while the Japanese were chipping away at their market share. So the lack of innovation is why the big 3 US automakers are losing money.

High Gas Prices

During the 1990s the three were able to make profits with their SUVs. But then came the high oil prices. With oil hovering in the $100 range, people started looking for more fuel efficient cars.

The Credit Crunch

This was followed by the US housing and credit crisis. It plunged the US into recession. Thousands of people have lost their jobs. As people tightened their belts, people stopped buying cars and SUVs. With low sales and huge debts, the car companies are now faced with huge financial losses.

There are many more reasons why the big 3 US automakers are losing money. But the bottom line is that a lot of the problems could have been avoided if they had a little foresight.

A highly popular discount department store chain in the world, Kmart shocked the entire world when it filed for bankruptcy in 2002. The financial problem was very similar to that of Enron, as it almost put an end to one of the most notable retail store chains in history. A company marked with significant highs and lows, it is quite interesting to find out why Did Kmart filed bankruptcy.

Reason Behind the Bankruptcy

Why did Kmart filed bankruptcy? Then-President Mark Schwartz and former Chairman Chuck Conaway caused a financial disaster when they misled company officials and shareholders regarding a financial crisis. Instead of disclosing millions of income and revenues, the two were allegedly spending the money of the company on different kinds of luxuries. According to reports, they spent the money on boats, houses and airplanes.

For these reasons, the company sought Chapter 11 bankruptcy protection. The blame for such crazy downfall for such a huge company was on Conaway, who admitted the fault during a company conference that took place on January 22, 2002. This was the very same date that the company filed for bankruptcy protection. As a result, the stockholders and other company officials forced Conaway to resign. Simultaneously, he was asked to return and pay back all the money and loans that he took from the company.

Important Events and Developments that Took Place After the Bankruptcy

Edward Lampert decided to buy the bonds of Kmart during the time of its bankruptcy. The move was made for ESL Investments. After some time, the discount department store chain slowly emerged out of bankruptcy on May 6, 2003. The newly established Kmart Holdings Corp. started trading at the NASDAQ stock exchange on June 10, 2003. Instead of operating the company for sales, Lampert controlled it in a way that the company would profit.

After emerging from such bankruptcy situation, it was a perfect time for the company to restructure. As part of this all-important move, 34,000 employees were laid off. At the same time, approximately 300 stores closed. All of these significant moves were made after Schwartz and Conaway were dismissed.

In November 2004, Kmart decided to purchase Sears, Roebuck and Co. Under the terms of the merger, the new entity would carry the name Sears Holdings Corp. In addition, both Kmart and Sears can still operate stores under their respective brands.

Today, the company runs in four different successful store concepts. K-Café is a nice restaurant found within stores that sells sandwiches, hot dogs and soft pretzels. Furthermore, it also serves coffee and other kinds of refreshing beverages. The other three store concepts are Kmart Super Center, Big Kmart and simply Kmart.

Because it’s such a valuable resource, consumers have the right to know why gas is so expensive. There isn’t a single cause though. There are actually several explanations.

Demands by Growing Economies

The emerging economies of China and India are partly responsible for the increase in oil costs. Statistics show that every year more people there are purchasing cars. This increases the demand in those countries. What happens is that the supply of oil is stretched out. This naturally increases the costs.

This doesn’t just apply to China or India. Whenever the world economy is up, the need for oil increases. This is just part of the natural law of supply and demand. So it would be correct to say that emerging economies are reasons why gas is so expensive.

Seasonal Demand

The weather also plays a part. During winter season in the Northern Hemisphere, the need for oil goes up. This is true in Europe and the United States. In this case the rise is temporary, albeit quite steep. When the winter season ends, the costs will go down to the pre winter level.

Lack of Refineries

People also need to realize that you can’t just dig oil from the ground and use it. Crude oil needs to be refined. These refineries cost thousands (if not millions of dollars) to set up. A company that invests in its construction will recuperate the cost from selling the oil. Because of their costs, there aren’t that many refineries around.

Another reason why gas is so expensive is that independent refineries have become scarce. Most now belong to the big companies. Thus they can control the output and the price.

Policies of Oil Companies

In some countries oil companies have a monopoly of the business. They can decide how high or low the cost will be. If they set it high, this will be reflected by their dealers. Sometimes the need to set costs high is due to operating expenses. But some corporations jack up the price just to make more money.

Low Value of the Dollar

In the United States, the value of the dollar plays a part in determining the cost. The lower the value of the US dollar, the costlier it will be to import.

War and Political Instability

International conflicts are also used to explain why gas is so expensive. Most of the world’s supply comes from the Middle East. However it’s one of the major hotspots in the world. Conflicts between Israel and Palestine can drive costs up. The war in Iraq and Iran’s nuclear programs also heighten tension. These factors combine to raise the costs of oil.

Scarce Resource

Oil is not an infinite resource. Even today, world governments are looking for alternative energy sources. The time will come when demand will exceed the available supply. But even now this worry contributes to its sky high costs.

As you can see, the causes and explanations for why gas is so expensive are numerous. With the need growing, there is little chance that it will go down.

Agriculture is defined as a science focusing on the systematic way of producing goods through forestry as well as farming. Historians agree that agriculture played an essential role in the development of civilizations because it covers various fields of study that are significant to the survival of humans. There are numerous reasons why is agriculture important to humanity. Knowing these reasons is significant to maintain political, economic and social stability in the different regions of the world.

The Importance of Agriculture

Why is agriculture important? Agriculture is the key element to the discovery of the various means of collecting and storing foods during the early times. The concept behind the creation of food surpluses will not be developed without people’s understanding of agriculture. This led to the implementation of stratifications in societies.

In present times, business people find it very helpful in supplying work opportunities to some areas in the world. Farm owners hire great number of workers to do jobs like pastoral herding of animals, plant cultivation and plant breeding. With ample knowledge on this field of study, it will be easy for humans to develop new technologies and systems that will be helpful in improving food supplies in the world.

Agriculture is significant to the production of organic food, which started in the 1980s. With the opposition of some agriculturists in the world to the frequent use of conventional non-organic food methods or procedures, consumers started to demand for the continuous production of organic food. Because of this economic trend, entrepreneurs find great financial opportunities in the expanding organic food market. In the late 1990s, more private corporations ventured in businesses that deal with the storing and selling of organic food.

Agriculture is also helpful to stimulate environmental and social growth. By learning the various environmental friendly methods of producing and storing food, hunger was successfully alleviated in many countries since the 1980s. Aside from these, agriculturists also discovered advance methods that are helpful to improve the food supply in the 1990s. One of these methods is known as genetic engineering, which is very popular because it allows humans to develop new breeds of crops.

Finally, agriculture is important to world economy because it has great contributions to international trade since most of the items that are imported and exported by countries are agricultural products. To sustain the economy of a particular nation, political leaders should concentrate on implementing laws and policies that will strengthen the agricultural sector because it has an impact on the gross domestic product.

It doesn’t matter if you’re well off or work for every cent; knowing the importance of financial planning is critical for your future. In fact, it’s never too early to prepare for it.

Saving Money is Paramount

It doesn’t matter if you can save hundreds of dollars or only a few. It’s just crucial that you do. You don’t need to have a particular goal. That is, you’re saving so you can buy this or that. You’re just saving money. In fact it’s a good idea not to spend it. It won’t be long before that amount starts to grow.

For most, saving is probably the hardest part. Expenses are numerous, but make a note of the things you pay for. The importance of financial planning lies in its ability to make you see and think clearly. Learn to distinguish between the things you need to pay for and those you just want to buy.

Cut Down on Extra Costs

You probably think you don’t spend much on trivialities, but it’s likely you do. These can range from the cigarettes you buy or that six pack of soft drinks. By cutting down on junk food and other stuff, you’ll be able to start saving. These may not seem much, but they will accumulate quickly.

Investing Wisely

If you have some money, you’ll naturally want it to grow. When you realize the importance of financial planning, you’ll recognize the various options available. The most common is to put the money in a savings account or time deposit. Other alternatives are investing in the stock market, mutual funds or forex.

A word of caution: the options mentioned above yield higher profits than banks. However, they do have risks. If you’re not familiar with these markets, hire a broker or do some research first. Most would also say that the money you put in the stock/forex should be cash you can afford to lose.

There’s an element of gambling involved there, so be careful if it’s your retirement fund. As you study the importance of financial planning, don’t get too caught up in the numbers; use your common sense too. Be wary of scams and other schemes that sound too good to be true.

Set Your Priorities Straight

There are a number of goals you can set: building a home, saving for your children’s education etc. If these are included in your goals, always think in the long term. If you want to get a loan from a bank, be sure that your papers are in order.

The same can be said if you want to start your own business. Even if you have piles of money, it will go down the drain if you don’t plan or do research. By having predetermined set of priorities, you’ll have an easier time managing your money.

A personal emergency or nationwide economic crisis can strike at any time. For this reason, you must know the importance of financial planning. By being prepared, you’ll be ready to face any challenges that will appear.