Sorry guys, but this is simply not so. If a line of business cannot cover its
variable costs plus a reasonably allocated part of the corporate overhead, then
it is not a viable business in the long run. I suspect that in the case of
Olympus, the camera division cannot even cover its own variable costs.
Cheers,
Nathan
Nathan Wajsman
Alicante, Spain
http://www.frozenlight.eu <http://www.frozenlight.eu/>
http:// <http://www.greatpix.eu/>www.greatpix.eu
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YNWA
> On 13 Nov 2019, at 10:11, Piers Hemy <piers@xxxxxxxx> wrote:
>
> Well put, Moose - and in your previous posting " Anyone who knows for sure
> isn't talking. Many who know nothing for sure are talking. "
>
> Allocation of "overheads" is an art, an expression of the goals of
> management, which can change over time. What we know from the past is that
> Olympus is a world-class producer of optics with applications in many more
> areas than amateur (or even professional) photography, and the concept of
> pulling one marketing division because of poor results is idiotic, because
> it would simply shift the overheads borne by that division onto all the
> others.
>
> Piers
>
> PS First time I have seen you mention your former employer by name, Moose.
> Not that we hadn't worked it out anyway.
>
> -----Original Message-----
> From: olympus <olympus-bounces+piers.hemy=gmail.com@xxxxxxxxxxxxxxxxx> On
> Behalf Of Moose
> Sent: 12 November 2019 22:51
> To: olympus@xxxxxxxxxxxxxxxxx
> Subject: Re: [OM] rumors of Olympus closing camera division?
>
> On 11/12/2019 1:51 PM, Ken Norton wrote:
>> A company that loses kajillions of Yen every year....year after year
>> after year after year... is bound to examine "why" keep going with an
>> entire division that just costs the stockholders serious money.
>>
>> I think the answer is obvious when you consider the non-obvious:
>> Accounting trickery. You bury R&D and Engineering costs for other
>> divisions into the one division that is "forgivable" for losing money.
>> The whole company benefits from having one loser division.
>>
>> While technically illegal and/or unethical, there are a myriad ways to
>> do this without conflict with the regulators.
>
> The art of allocating costs between areas of a company that's vertically
> integrated is a subtle one, with no hard and
> fast answers.
>
> For decades, Safeway considered their Supply Divisions, which sourced our
> private label brands, and especially the
> plants that manufactured many of them, to be major profit centers.
>
> Then we went through an LBO. The minions of our new owners went through all
> parts of the company, to determine what was
> OK, what needed repair and what should be sold.
>
> These new consultants came with different assumptions and came to different
> conclusions. Many of the plants that had
> been profitable were now financial drags and were sold. Most to new owners
> who continued to supply our private label
> brands and other needs.
>
> So sure, Oly's camera division may be being saddled with costs that may not
> be appropriate, for whatever business,
> political or philosophical reasons. Almost certainly not illegal, as it's
> all one entity. Unethical? Probably depends on
> point of view.
>
> Nuanced Moose
>
> --
> What if the Hokey Pokey *IS* what it's all about?
> --
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