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Thread: Face to face

  1. #61
    Senior Member 6feetunder's Avatar
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    Default Re: Face to face

    It's easy to say go find facts when you have none. I know what I've seen so it really doesn't matter , choose to be ignorant in your beliefs it doesn't affect me. The company as a whole is not producing the 30 - 40%, more like 18%. There are however territories that do run 30 - 40% proving that more should be expected from the rest. Even in the territories running at the high margins , the workers are paid crap for the most part and will never get paid what they should. The 5 territories running at 30 make up for the 12 running at 15, instead of giving the 5 - 30's raises and holding the 12 15's accountable to raise the bar. I don't care what anybody says I don't feel sorry at all for any owner, they reap their rewards and more than they would let you think, however in most cases the locators don't reap what they put in. Both parties involved rely on eachother to make money and conduct business, but I feel the scales are tipped a little too much towards the top. Step back and think about it for a second, you are paying a guy 12/hr on average that is responsible for peoples lives and millions of dollars worth of utilities. Heck you can make that at McDonald's making chicken nuggets! Locators are some of the most under paid and under appreciated people in the world period.
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  2. #62
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    Default Re: Face to face

    Quote Originally Posted by TheCableVine View Post
    I gotta pipe in on this one. Years ago companies made good money. Those days are gone. If you read through this site you will see multiple threads on companies that underbid contracts just to get the contract. When you underbid a contract you make little to no money. You may even lose money. That is common these days.

    How can a company making 30-40% profit margins stay in business when there are multiple locate companies who are glad to come in and do it for half?

    Sure, there is always waste somewhere but that doesn't mean companies are making huge profits. If I were to guess I would say the profit margins are 3%-5% for an average company.

    I was surprised to hear that profit margins for major grocery stores are at about 1% - 2%.

    The basic rule of business is that high profit margins in an industry attract competition. Competition drives down prices so companies lose those profit margins.

    There is another factor that affects the industry adversely in this area.

    These are corporations with privately traded stock. Very often a majority share gets bought up by either another locating firm or a holding company.

    The holding company can be one that specializes in the utility industry or just some big firm that holds majority shares of stock in all kinds of businesses.

    The buying firm has put out millions of dollars, maybe even $100 million or more. They consider the money put out to purchase the stock to be money that a return MUST come back on. They decide what this rate of return will be and demand that the bought out company WILL return x amount of dollars to the holding corporation. The demand on how much will be payed out to the holding company is made be the holding company and may not be based on any realistic expectations of what profits can be returned. So when a firm gets bought out by another company there is usually a round of expense and benefits cuts.

    Some years ago I conversed with a locator whose firm had been bought out by a holding company that specialized in holding utility companies. One day there was a heated exchanged between the locate firm and the holding company because most of the trucks were off the street and the company was basically shut down.

    Now this holding company took firm financial of any firm they got control of. They did not just approve or disapprove the proposed budget they reviewed each individual line item and modified or deleted them as they chose. The holding company was in Florida and they had completely removed from the budget snow chains for the trucks. The locate company was somewhere in the US northwest and guess what t did that winter, it snowed.

    The other side to low bids to utility companies is unreasonable demands for profits by majority stockholders.

  3. #63
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    Default Re: Face to face

    Any time you have stock, either privately owned or publicly owned, there is a shareholder who wants maximum return on their investments. I would guess most do not know how it is done.

    Now since most of these locating companies have contracts in several states. There are going to be areas that maybe more profitable than others. The money making areas will always get the lions share of recourses. Look at GE, CITI, an even GM they all have companies in their holdings are more profitable than others. Take GM plants, the plants cost to much to retro fit were closed. The lines that did not make the profits were shut down. One plant is close to highest in quality but the profit wasn't there. Isn't like a half truth to say a companies profit margins are 30-40% but it is maybe a regional or state that has that margin and not the companies overall profit margin? If they have other areas that have less than 30% profit margins, should you not either given the total profit margin for the whole company if known or figured out a mean if possible? I agree if all were making 30-40% profit margins smaller companies would be popping up and taking smaller regional contracts. After all if you look back into the history of how theses locating companies got started, you would probably see where when times were better their were locators that quit locating for a company and went out and started their own. Like that saying goes" if you do not want to work for someone go into your business for yourself" Laborers will never be the highest paid. After all the guy who starts the business takes most if not all of the risk.

    snow chains, I guess the guy who cancelled them probably never driven in snow before too. I know the fleets usually deem air conditioning as a luxury. I haven't looked into the laws for heat and defrost, but if there wasn't or a risk of a lawsuit they probably say heat was optional too.

  4. #64
    Senior Member ProfessionalLocator's Avatar
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    Default Re: Face to face

    Quote Originally Posted by paintitnow View Post
    Any time you have stock, either privately owned or publicly owned, there is a shareholder who wants maximum return on their investments. I would guess most do not know how it is done.

    Now since most of these locating companies have contracts in several states. There are going to be areas that maybe more profitable than others. The money making areas will always get the lions share of recourses. Look at GE, CITI, an even GM they all have companies in their holdings are more profitable than others. Take GM plants, the plants cost to much to retro fit were closed. The lines that did not make the profits were shut down. One plant is close to highest in quality but the profit wasn't there. Isn't like a half truth to say a companies profit margins are 30-40% but it is maybe a regional or state that has that margin and not the companies overall profit margin? If they have other areas that have less than 30% profit margins, should you not either given the total profit margin for the whole company if known or figured out a mean if possible? I agree if all were making 30-40% profit margins smaller companies would be popping up and taking smaller regional contracts. After all if you look back into the history of how theses locating companies got started, you would probably see where when times were better their were locators that quit locating for a company and went out and started their own. Like that saying goes" if you do not want to work for someone go into your business for yourself" Laborers will never be the highest paid. After all the guy who starts the business takes most if not all of the risk.

    snow chains, I guess the guy who cancelled them probably never driven in snow before too. I know the fleets usually deem air conditioning as a luxury. I haven't looked into the laws for heat and defrost, but if there wasn't or a risk of a lawsuit they probably say heat was optional too.
    Yes, there are managers that do not like it thinking it is just a luxury but these mangers are wrong. Air conditioning has shown to increase productivity well beyond it's cost. Air conditioning is a money maker.

    Fortunately in the type of trucks most locating firms use AC is standard equipment, it just comes with the truck. Perhaps with a fleet order they could get them without AC but most just get a few trucks at a time from a local dealer. Also many firms lease their trucks rather than buy them so they get what is commonly in inventory.

  5. #65
    Mke
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    Default Re: Face to face

    I Kinda see where 6ft is going with this, but I think he's mis-lead. I think smaller private locate firms might be able to pull larger profit margins then larger public locating firms. I still think 40% is way.....way......way.......out there for a reasonable figure. Most buisnesses don't pull in 40% profit margins. You can't compare the Locating industry to the Banking or Loan pricks that bilked the system out of imaginary cash.

    I don't understand how you think these companies are having truck loads of money dropped off in their lobbies. I worked for a Private locating company, small only a hand full of locators. We had a solid contract with a utility for 124,000 buckaroos a year. That contract only needed one locator at 34,000 bucks a year. The truck was paid off before the contract was enacted. Had no Insurance to speak of. The only thing that had to have money was supplies (paint, batteries, maintanence). As good as that number looks, its still shy of 30%.

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    Default Re: Face to face

    Quote Originally Posted by Mke View Post
    ...to the Banking or Loan pricks that bilked the system out of imaginary cash.
    Ahhh....come on. We're not all that bad.

  7. #67
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    Default Re: Face to face

    I guess i will make myself more clear on the A/C. The trucks all come with factory air but if it goes out and not under warranty, we have had the fleet deny the repair. When we questioned the repair shop the stated that the fleet said it was not a necessity but a luxury. The managers of the locators had nothing to do with it.

  8. #68
    Conservative Meanie ifinditunderground's Avatar
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    Default Re: Face to face

    6feet, some of us have facts.......some of us see the monthly and year end financials. I have facts, go get some of your own. "I saw One areas financials One time" is not facts bud.
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