Friday, January 04, 2008

Is this any way to run a business?

Quote from tonight's financial news on ATV:
"Ford is selling these units [Jaguar and Land Rover] to concentrate on its unprofitable US business."

Er.. wouldn't it make more sense to concentrate on your profitable businesses and dump the loss-making ones instead?

Meanwhile, the main news reported that Western Harbour Tunnel fees, already the highest among the three tunnels, will rise by $5 or more depending on the type of vehicle. Since many drivers already go out of their way (literally) to use the $20 Cross-Harbour Tunnel rather than the (currently) $40 Western Tunnel, this can only drive even more vehicles away from the tunnel, which has run at a loss since it opened.

Conventional economic wisdom suggests that where there are alternatives in the market, the best way to attract more business is to lower prices, not to raise them. Do the tunnel's owners know something we don't?

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