"Tim" wrote in message
...
On Jul 4, 4:25 pm, thunder wrote:

I heard something interesting, perhaps on NPR, the Chinese prefer foreign
brands because the perceived quality. Seemed a little odd to me, as most
of those "foreign" brands are manufactured in China.

In the past few years. American-made Snap-on tools have found a good
and profitable market in China as well as the rest of Asia.

Yep, and as of last year you can get the knock offs pretty inexpensively.
Just minus the logo.

As for the profits, while they are making some, the market is quite
competative and margins much thinner than Snap-on is used to. And as the
Chinese manufacturer for Snap-on, they gain the expertise to undercut
Snap-on. Good for short term numbers but lets take a look at Snap-on say 3,
8, 15 years out. My guess is the profits will be squeezed and pricing
elasticity is shot to hell.

With credit the way it is, the dealer part of the business is under the
squeeze in both costs and credit. Industrial is under pressure.
Government? Not sure but not big enough to mater that much.

The real problem with companies like SNA on a long term view is the new
management style. Hacksaw Jack of HNI fame started it and no doubt some was
needed. But new managment knows nothing else but ruthless and often
mindless slash and burn mentality, geared only towards short term profit and
management bonuses. Good short term view, but not maintainable in the long
term. From what I hear, they are not repairing the social damages done to
morale either. A ticking time bomb and VP/executive top heavy.

Review the history of another mid-west company, Master Lock. No longer
manufacturers much at all and ever bit outsourced. A shadow of it's former
self, went to China too. Snap-on in right on this track.

It isn't to say I would buy SNA stock, I might. If it dipped to $20 I might
make a short term play for $35 but it has no place in my long term portfolio
as a buy/hold. Sold my last lot at $59.90 just over a year ago. It will
not see $60/share until inflation drives it or a reverse split.