Dr. Ellen Szarleta-Instructor
September 02, 2006
Products, Services, and Prices in the Free Market Economy
Wabtec Corporation which is formally known as Westinghouse Air Brake Technologies manufacturers braking equipment and other parts for locomotives, freight cars, and passenger railcars. For the fiscal year ending December 2005 the company generated revenues of $1 Billion dollars, an increase 25.8% of over the previous fiscal year (Wabtec 2006). The company conducts its business through two principle segments: the freight group and passenger transit group, both of which serve original equipment manufacturers (OEM), and provided aftermarket sales and services. The freight group manufacturers and services components such onboard electronic components, train coupler equipment, and engines. The freight division generates sales from OEM sales and locomotive overhauls, aftermarket sales, and from freight car repairs and services.
The company operates from around 40 plants, service centers and sales in the US, Canada, Mexico, Europe, Asia, Australia, and South America.
With the recent news that Wabtec lost a multi-million dollar contract with CSX Transportation which operates the largest railroad in the eastern United States is considered a big blow to the freight group since it produces electronic train controls for locomotives. Sales for the electronic train control are low and Wabtec needs to decide whether to increase the sales/supply by increasing or decreasing the price of the good and services which it provides and in this case it would be the electronic train control system. Although, in the other divisions the sales are high with other equipment, Wabtec is driven to increase profits and revenues which benefit its shareholders even though the overall net sales and profits for the company are up.
In order for Wabtec to achieve its current... [continues]
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