Archived posting to the Leica Users Group, 1999/09/27

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Subject: RE: [Leica] I am very concerned.
From: "Lee, Jonathan" <Jonathan.Lee@hrcc.on.ca>
Date: Mon, 27 Sep 1999 09:37:11 -0400

All this bad financial news can only mean one thing....

It's time for a new LEICA COMMEMERATIVE!!!

Jonathan Lee

- -----Original Message-----
From: Bill Erfurth [mailto:m6rf@yahoo.com]
Sent: Sunday, September 26, 1999 11:07 PM
To: leica-users@mejac.palo-alto.ca.us
Subject: [Leica] I am very concerned.



I have been quite busy and have not been following
Leica stock like I usually do.  Today I had a chance
to take a look at it, and the picture is not good.

As I recall, a couple months ago Leica was at about 13
or 15 Euros, now it is a 8 and some change.  What this
means is that Leica stock has lost, at least, one
third of it's value in the past couple months.  And,
it was down last week again over 11%.  That is not
good.  Imagine your house loosing 30% to 40% of it's
value in a couple months.

You can look at the data yourself at:
http://profiles.wisi.com/profiles/scripts/cos01.asp?cusip=C28084720

I believe that Herr Cohn has made the necessary
business decisions in cost cutting and reorganization,
but he does not have a feel for the photographic
industry, nor does he have the experience or expertise
to sell to this nitch market. A 30% to 40% drop in
Leica stock means that the financial community has
lost faith in Herr Cohn's ability to turn the company
around by himself. Those are harsh words, but I can't
help but believe that they are accurate.

Herr Cohn (or the board of directors) needs to bring
in someone with the knowledge and insight to reverse
some of the problems that still exist and bring new
products to market IMMEDIATELY.  I can think of a half
dozen things, off hand, that should have been done
that have not been done.  There are very simple
changes that haven't been made.  There are missed
opportunities for marketing and promotion that have
slipped away by default.  There is one relatively
simple change that could be made to the M6TTL, that
would send sales through the roof, that hasn't been
made, and there is no indication that anyone has even
considered it.  This change should have been made
months ago, and the improved M6TTL should now be
sitting on the dealers shelves, but it isn't.

Another major problem that exists at Leica is the R8. 
If, as reported, there are 5,000 R8s sitting on the
shelf (roughly a 2 1/2 year supply), and if the unit
cost of these items is say $400 (US), that is
$2,000,000(US)in dead inventory. That is $2,000,000
that could be put to good use in other areas to
generate much needed profits for the company.  But,
here again, there is no indication that anything is
being done about it.  I believe that these can be sold
at a substantial profit in a relatively short period
of time.

What is the answer?  The simplified answer is to 1)
bring in someone who will jump-start sales through
immediate product introduction and promotion.  Second,
Herr Cohn (or the board of directors) needs to find
some "Silicon-Valley" types who will come in and work
for little or no salary in exchange for a  share of
the profits if the company can be turned around.  The
longer they wait the greater the chance is that the
company will fail.

Make no mistake about it.  There is a point of no
return.  A point where the stock is going to drop like
a rock and the assets of the company will have to be
liquidated.  

I truly believe that the company can be salvaged and
that it can grow and prosper.  But, that is not going
to happen unless drastic changes are implemented, and
implemented immediately.

Someone in Solms has some very difficult but necessary
decisions to make.  Let's hope that they are up to the
task.

My personal opinion is that Leica is the Mercedes-Benz
of the 35mm photo industry.  Although it will take
some had work by dedicated people, Leica can be
restored to it's previous position of leadership and
profitability.


Regards,

Bill Erfurth
m6rf@yahoo.com












































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