I gots sometin' excessive he can feel!
Posted on 02/05/2006 9:50:35 AM PST by Willie Green
For education and discussion only. Not for commercial use.
It is almost impossible to imagine a figure like $10 billion (£5.6 billion). In fact, it is almost impossible to write it down because it has so many noughts on the end. But the accountants at Exxon Mobil must be pretty used to dealing with the number, because that is the amount of profit they have just made.
If that seems like a huge amount of money then please note that this was not Exxon's 12-month profit, but its quarterly profit for the last three months of 2005. If you take the whole year into consideration then the figure is an even more staggering $36 billion (£20.3 billion), making it the largest profit ever made by a US company.
Of course the team at Exxon Mobil will be quick to point out that these profits are merely a function of their huge turnovers. After all, a relatively modest percentage on a huge sum of money soon adds up. It has been estimated that Exxon Mobile are making about 10 cents on every dollar of petrol they sell in the US, not an unreasonable amount compared with some industries. But we have all heard this defence a number of times before – look no further than our beloved financial institutions and all-conquering supermarket chains – but when the numbers start to get this large it still feels a tad excessive.
The oil industry will also reference the fact that they spend huge amounts of money on research and development, trying to find alternative power sources which will eventually take over from fossil fuels. But to me this does not cut the mustard - the profits that have just been declared take into account these costs. That $36 billion is profit pure and simple.
The slightly bizarre part of the whole equation is that while oil producers are making record profits, one of their biggest customers, the automotive industry, is on its knees. News this week revealed that Ford had once again made a loss, this time $1.6 billion (£901 million), in its North American operation in 2005. At the same time they revealed that they plan to cut another 30,000 jobs and shut 14 plants by 2012. And just a few days earlier General Motors announced a loss of $5 billion (£2.8 billion) in North America for the same period and an $8.6 billion (£4.8 billion) loss on global sales.
These losses may feel huge for GM and Ford but when you are making over $1 billion a fortnight like Exxon Mobile, you could pay them off out of your small change.
Perhaps it is time that the oil companies snapped up a few of the car manufacturers? It would guarantee the demand for fuel products in the future and more than likely be welcomed by a few of the governments and banks that are currently looking at a potentially sticky situation if a major manufacturer goes pop.
Oil companies buying car companies may sound like a preposterous idea today, but if they continue to make such huge profits they are going to have to find something to spend all of their profits on.
Why would a successful oil company want to buy a health and pension manufacturer who makes cars as a hobby?
Is the automotive business really on its knees? Or is it just Ford and GM. Is it true that fewer cars are being sold, or is it that GM and Ford are losing customers to the other manufacturers?
Silly article. As if all profits go to the corporation and the share-holders don't exist. As if corporations don't think about reinvenstment, or alternative competitive industries especially in the face of rampant concerted efforts to promote alternatives instead of their products.
Exxon made 10.7% profit, Microsoft made over 30%, Merck made over 25%. Why should an oil company be punished just because it's business is an order of magnitude larger than a software or pharmaceutical company?
Cool idea. Maybe the day will come again when we can buy some fully prepped race cars at the dealership, specifically modern cars with the concept of the Ford Thunderbolt, Hemi Darts, and ZL-1 Camaros.
I gots sometin' excessive he can feel!
And forget about economy cars. The more gas car uses,the more $$$ oil co. will make in the future.
Trying to compete on the low end of the market is a LOT of the problems with the domestic manufacturers. Not only do these cars not use as much fuel, but there is little profit in making them due to the competition cutting each other's throats racing to the bottom of the barrel.
As an example, Ford should be making Mustangs, GT-40s, the pickup/SUV line, and Crown Vics. Nothing else is needed.
The cars would be cheap but thay would get about 5 mpg and the cost of gas would skyrocket.
I wouldn't touch a car company with my worst enemie's ten foot pole. Who wants all that union pension responsibility?
The oil companies should start their own car company, union free, if they want to get into the business. Which I doubt.
They can't. They are mandated to produce a cerrtain quantity of miles per gallon across the board in their production run.
In other words, they can only produce so many SUVs as long as they also produce a certain quantity of low mpg cars to offset the fuel consumption of their entire line.
You can thank DC for that.
Because U. S. laws don't allow vertical ownership.
Be careful what you ask for, you might get it. If the oil companies owned the car companies we would be getting gas mileage of 2 to 3 miles per gallon.
"I am sure that the result would look like the computer printer industry"
Quit using a stupid ink jet printer and buy a lazer.
I just yesterday changed the toner csrtrage on my HP-6P after 5 years of using it daily at a total cost of $32.96.
10 years ago it cost over $600 but has never had any service and is now starting on it's 3rd cartrage, super cheap at the price and never problem.
These profits won't last. Just watch Hugo Chavez discounting oil to make friends as a harbinger of what is coming. Copmpetition.
I can thank DC for a LOT of things like that. How long do you think that CAFE would last if the oil companies bought GM and Ford?
I.E. how does Ferrari comply? - $'s
CAFE needs to go, the oil companies need lots of competition, and they need the freedom do drill wherever they can afford to buy the lease. Plus, alternative technologies need to be developed.
Let the free market decide what's profitable. If I want to buy a 2006 muscle car with a 429 Hemi, I should be able to. If I want to buy a solar powered mini-bike, that's my prerogative.
The government needs to completely butt out, except to break up monopolies like OPEC.
We bought an HP 5P just over ten years ago. It cost $900, we have put about five toner cartridges through it, but it is still going strong.
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