For another thing, what about the many markets where the Japanese compete and Detroit doesn't? Like Africa, for instance? Or Southeast Asia?
I think that the biggest problem GM and Ford have is centered on their products, not their wage costs or manufacturing efficiency or brand management or executive compensation. They simply don't make the kinds of cars that people want to buy. You can't buy a car made in Detroit that competes with the Honda Fit or Toyota Yaris. Period. At any cost.
Should there be money to be made, I think Detroit would have solved the right hand drive issue. Ford certainly knows how to make right hand drive vehicles. This is certainly not the first time I have heard the protected domestic market argument and I have yet to see it convincingly refuted. I doubt that it can be. Nor is this the first time I have heard the strong dollar argument.
My suspicion is that these policies strongly favor large US retailers and those in the financial dis-services industry who have bought up, closed down and laid off workers of US manufacturers so they could ship the production to China and other low labor cost destinations and then clean up and sell the property formerly owned by said hapless manufacturing companies.
I believe that this is a suicidal, unsustainable race to the bottom that now has succeeded in hollowing out the US economy for the benefit of retail, transport and finance and has helped create a massive national accounts problem that had to blow up, which it is now doing.
The other significant contributor to this problem has been our oil companies and the associated national accounts problems deriving from importing so much oil, especially at $40 to $140/bl. This has allowed those companies with domestic production to sell at great profit oil that costs them $2.00/bl. to $20/bl. to produce.
So due to the highly unequal distribution of wealth in this country and the consequent highly unequal distribution of economic and political power the whole country has been systematically looted and run into the ground in the interest of a few small vested interests. The rest of us are left with the carcass of an economy. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
And you're right that Ford in Europe knows how to make LHD cars--in order to sell them in Britain. But how many Detroit-made cars find their way to Europe?
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Despite this commitment, Toyota's foreign workers in Japan are second-class citizens. On arrival the guest workers' passports are confiscated. During the first year as "trainees," they are not covered by Japan's labor or minimum wage laws. They work alongside Japanese workers, putting in the same long hours, but often earning less than half the minimum wage - as little as $2.76 an hour, or $479 a month. As guest workers, they are required to remain with the same employer - no matter how bad the working conditions - and to live in the company housing assigned to them - even though some are charged twice what their Japanese colleagues pay for comparable accommodations. Any worker who tries to change jobs, or who complains about conditions may be forcibly deported. By the time food, housing, and taxes are deducted, some guest workers end up earning less than $600 for an entire year, according to several advocacy organizations and unions that work with subcontract plant temp and guest workers. ... In the U.S., Toyota has set up non-union plants in the South - far from the unionized auto industry stronghold of the Midwest. Blunting support for unionization is Toyota's practice of paying wages nearly on par with the U.S. auto companies (around $25 an hour in comparison with G.M.'s $26 to $28) - although with much lower benefits. Meanwhile the Big Three's falling sales and market share have forced the American companies to adopt, and their workers to accept, two-tier wage and temporary worker schemes eerily similar to those used for years by Toyota - just to compete. And the race to the bottom seems to be just warming up. In September 2008, an internal Toyota memo leaked from its Georgetown, Kentucky plant, laid out management's plans to cut $300 million in labor costs in its U.S. operations. In April 2008, the Wall Street Journal reported that Toyota plans to end its practice of pegging its hourly wages to UAW rates, and will now pay new hires only 50 percent above the local prevailing wage. In Kentucky, this would mean a savings of about 12 percent, or $3.00 per worker hour - which, of course, will put even more of a squeeze on the Big Three U.S. auto companies and their unionized workforce.
In the U.S., Toyota has set up non-union plants in the South - far from the unionized auto industry stronghold of the Midwest. Blunting support for unionization is Toyota's practice of paying wages nearly on par with the U.S. auto companies (around $25 an hour in comparison with G.M.'s $26 to $28) - although with much lower benefits.
Meanwhile the Big Three's falling sales and market share have forced the American companies to adopt, and their workers to accept, two-tier wage and temporary worker schemes eerily similar to those used for years by Toyota - just to compete. And the race to the bottom seems to be just warming up. In September 2008, an internal Toyota memo leaked from its Georgetown, Kentucky plant, laid out management's plans to cut $300 million in labor costs in its U.S. operations.
In April 2008, the Wall Street Journal reported that Toyota plans to end its practice of pegging its hourly wages to UAW rates, and will now pay new hires only 50 percent above the local prevailing wage. In Kentucky, this would mean a savings of about 12 percent, or $3.00 per worker hour - which, of course, will put even more of a squeeze on the Big Three U.S. auto companies and their unionized workforce.
Primary strategy. The 2007 GM-UAW contract was the first "bailout" scheme, to capitalize GM's bond rating and pensions in exchange for slashing wages. At the time Gettlefinger said, union members had made enough sacrifices to allow GM to be competitive with non-union automakers. But he's hinted recently bosses aren't averse to breaking the line in order to support the automakers' pitch to Congress for $34B.
The complete Toyota report is at NICNet.org Diversity is the key to economic and political evolution.
Doesn't generally happen that way, in my experience.
Example: A friend of mine is married to a Frenchman[1] who came over on (I'm pretty sure) an H-1B, and who was in the process of getting a green card when they started dating. The process is expensive and a pain in the ass, but it's a pretty boring and formal process. I don't think his employer cared much either way.
[1] (See, Jerome, we love the French, even in the South. And he's not even one of those fake Canadian ones.) Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
but but isn't that exactly the issue with greencards in the US.
Why, yes, Helen :) picking scabs is an age-old American pasttime. When when labor organizes and agitates and wage demands squeeze margins, corporates shanghai recruit the world's poor and yearning to be free. By the boat-load.
Oh. That scrubbed Detroit News article, "$10M cost of do-over is obstacle; powerbrokers in Mich. to press solution with national party"? I saved bits I thought interesting back when... March 2008.
The governor, in an interview with The Detroit News, referred to the contest as a "firehouse primary" -- more expansive than a party caucus but not a full-blown affair like a traditional, state-financed primary. People would have to declare themselves Democrats in order to participate, and the contest would be run by the Democratic Party, not the state. [...] In another development, a new Michigan team was set up Thursday to talk with the Democratic National Committee about a resolution. The members are: U.S. Sen. Carl Levin, U.S. Rep. Carolyn Cheeks Kilpatrick, Democratic National Committeewoman Debbie Dingell and UAW President Ron Gettelfinger. All are neutral in the presidential race. [...] The national party needs to ante up or help raise money to pay for it, she said. State taxpayers already shelled out $12 million for the Jan. 15 primary, and Granholm said she won't ask for public funding for a make-up contest. Hillary Clinton won the January primary, but she was the only major candidate [sic] on the ballot. The others, including Barack Obama, had their names removed. [...] Granholm and state Democratic Party Chairman Mark Brewer said the national party has been pushing for party caucuses. Brewer estimated the cost of running a firehouse primary at $10 million, to cover the mechanics, staff and publicity.
There's always more to the story ... Diversity is the key to economic and political evolution.
For one thing, they drive on the wrong side of the road and Detroit doesn't design their cars to have steering on either side. So that keeps out the vast majority of cars.
That's actually trivial. In a lot of plants around the world, LH and RH drive cars come off the same line.
The problem isn't simply not having small-car designs either: they do - in Europe (the Ford Fiesta is simply the first one that comes to mind).
The US carmakers chose to neglect the economy segment - and now they're paying for it. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
you are the media you consume.
The problem is that the US market focused, thanks to insanely low gas prices (due to lack of taxation) on bigger and bigger cars, and Detroit did respond to what the market wanted - and fed that demand too, because they had an advantage in the light-truck sub sector.
Demand has shifted brutally because the impact of gas prices is much stronger in the US than elsewhere, and the Big 3 are weaker in the smaller segments - they simply haven't marketed their products as "no-nonsense" cars, and it takes more than a few years to change your product mix. In the long run, we're all dead. John Maynard Keynes
Not a single Japanese car: zero, none. Probably the only country in the world (with North Korea?). It was really striking. Europeans think a hundred miles is a long way. Americans think a hundred years is a long time.
