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, Tue, 22 Dec 2009 03:52:39
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From that same article:
"5. It's wise to assume that the huge loss figures probably attributed to operations like Saab or Volvo or Saturn are exaggerated. Why? The tendency in the auto industry is to dump costs. If Ford Motor ( F - news - people ) of Europe could dump millions of dollars of its costs into Volvo, the Ford Europe people look better. And dumping costs--let's be nice and call it cost allocation--is done with a stroke of the keyboard. Naturally everyone would deny such game playing, but believe me, it's the way they play the game."
Like AdamB said in an earlier thread.
Even if a company wants to be transparent and play a fair game in cost allocation and transfer pricing, corporate politics are always just around the corner.
It's just too tempting. Tax evasion (errr.. make that 'tax planning' :-)) is easily understood in the boardroom, calculations fit on the proverbal stamp, and it is considered 'easy money' i.e. you don't have to go through all the hassle of marketing and selling a good (or not so good) product in a competitive market place.
Moreover, most larger companies have dedicated tax departments, whose daily job & reason of existence it is to spot these opportunities. Before you know it, this gets into the core business of a company.
been there, done that...
posted by 217.77.15...
, Tue, 22 Dec 2009 03:46:14, Wed, 23 Dec 2009 06:48:28, Tue, 22 Dec 2009 15:14:45, Tue, 22 Dec 2009 03:52:39, Thu, 24 Dec 2009 10:47:03, Tue, 22 Dec 2009 05:28:53, Tue, 22 Dec 2009 15:09:01
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