Exxon Mobile throws in the towel

[Philip T]

Originally Posted by baystater

So basically they're trying to find a bunch of franchise chumps to take on the burden of selling their gas.

You got it.

Still leaving their name on (dunno what "good will" that has -- I bypass Exxon stations), and trying to find a pack of Greater Fools to take over payments.

They will work it like a sled shop (used car lot). Take the fool buyers' money, and then jack with them, take the store back, and then rinse and repeat until they screw over enough idiots, and then start a new scam.

American business model ethics have when from goofy to just totally crooked.

First there are builders.
Then there are maintainers.
Finally come the looters.

America is deep in the looter stage.

[pcity]

Originally Posted by baystater

Here's the thing though. With the exception of the gas/convenient store/restaurants at rest stops 1. The cost of fuel is going to cause a lot of people not to buy convenient store products at inflated prices. I will expect the gas/store profits to remain low until if/or when gas ever comes down in price. 2. Now with pay at the pump credit/debit cards those stores in gas stations won't get as much impulse buying because people don't even have to go into those stores anymore to pay.

This is true, and it's pretty clear where gas retailing is going. Those tiny little On The Run type stores are going to go by the wayside, and you're going to see more fast-food, sub shops, and discounters add gas as a loss-leader.

I notice if I ever go into On The Run or similar convenience stores, the place is empty, but if I go into Wawa or Sheetz, the place is packed, AND they have cheaper gas than Exxon or Mobil.

Wal-mart, Costco, Wawa, Sheetz, Sam's, Safeway- these will be the dominant gas retailers in a few years. The franchisees who are using gas to drive people to their attached Subway or McDonalds will probably be fine too. The standalone gas station, though, is on its last legs.

[pghquest]

Originally Posted by ViewFromThePeak

Exxon is making a wise choice. Just another way to get out of the dollar by selling domestic assets. I'm sure they'll continue to expand internationally.

I think its more then this also. With alternative energy coming into play, Exxon might be considering that they need to sell off the gas stations now while they are worth something. Exxon actually makes very little from the sale of gas, profits are generated by food sales and rental income.

[UpperPeninsulaRon]

Originally Posted by cdelena

Selling gasoline has always been a very low margin business, which is why the profitable outlets are convenience stores / fast food operations with gasoline only as a customer draw.

Refining is a business with varying margins so that at times like now with high crude and pressure on retail they also have trouble making a good profit.

The upstream part of the business is two parts... exploration and production. Exploration is a very high dollar gamble trying to find resources and negotiate rights for development with the owner and local government. The production part of the business has been very profitable of late but as recently as the 15 years ago was a struggle where it was hard to cover costs.

Even though many millions of Americans own oil companies (most through retirement plans and pensions), few recognize the complexity and challenges in the industry.

Absolutely correct. They are very focused on getting superior return from capital employed and no longer being interested in the retail business confirms this. It is one heck of a company. If anyone wants to really begin to comprehend the complexity of this well run enterprise, you should really see what they are all about.

http://www.exxonmobil.com/corporate/...b_sar_2007.pdf

I wish our elected officials were focused on a winning strategy like Exxon's management is.

[texdav]

Oilcompanies did the same thng with their refineries from mid 70's thru 2003. During those time refineries didn't make a profit and they were sold and bought by different investmant groups. Actually there has never been big profits in refining the oil ';it was the srude that has always been the profit maker. This is just another getting rid of retail business move.It is very hard to be in the selling gas business when you own gas and sell it at one price then the next day you pay alot more to replace that gas.