Building cars requires lots of manual labor. Manual labor in the states is bloody expensive compared to the rest of the world. Therefore manufacturing cars in the states does not make sense and cars manufactured there will be at a competitive disadvantage, all other factors being equal. Simple economics.
Discuss.
P71 wrote:
No seriously I'm not trying to flame. The idea just hit me yesterday, and I'm just looking for opinions.
Manufacturing that requires lots of manual labor has largely moved outside of the states, but there's a big freakin' car company right there
Jeez. You just now came to that conclusion? We've known that for years. 
Well,
One problem I see is that the folks in countries with low costs of labor will harbor some resentment toward the folks that are buying the cars at prices that could be argued as "artificially low."
And if you don't think that matters...you could look at other, more extreme cases of large groups of people having some ill-will toward the U.S.
Clem
Jensenman wrote: Jeez. You just now came to that conclusion? We've known that for years.
I think it was a fish-in-water effect.
ClemSparks wrote: Well, One problem I see is that the folks in countries with low costs of labor will harbor some resentment toward the folks that are buying the cars at prices that could be argued as "artificially low." And if you don't think that matters...you could look at other, more extreme cases of large groups of people having some ill-will toward the U.S. Clem
Good point, but I don't think it would be an issue unless the company is setting up a true sweatshop, and if they wanted to do that, they could just go to the Marianas islands, a place nobody knows or cares about where the workers are practically slaves.
This comes back to Adrian's 30 second history of the developed world. Let's look at the power houses on the world scene over the last few hundred years.
Industrial revolution - England based on building stuff
Late 19th early 20th century - America based on building stuff
Post WWII - Japan based on building stuff
Late 20th early 21st century - China based on building stuff
Yes I know that this is overly simple, but at the end of the day I don't believe we can survive as a service economy, we need to build things, anything if your going to have people earning money to continue buying things and driving the economy. This is partly why were in the situation we are.
Tariffs were created to level the playing field, but they've gotten so political that they no longer make sense.
The best thing that could happen to the world is for human rights to be closer to equal everywhere. In the US, unions help establish worker's rights (then OSHA and labor laws came into effect). Also, environmental issues should be similar. Those two things add a lot of cost to goods.
personally, I think it is mostly a product of comfort. The factories are here, the trained workers are here. Have you ever toured the Rouge River factory? They had EVERYTHING on site. They had a glass factory, a rubber factory, a steel mill etc.
If it doesnt make sense to make cars here then why did foreign car manufactures come here to make plants? i.e. BMW, Subaru, Honda... The BMW plant opened in 1994. Are any of the foreign plants UAW? Because I'm guess thats the difference.
RossD wrote: If it doesnt make sense to make cars here then why did foreign car manufactures come here to make plants?
To get around tariffs.
Yes, the number one reason to have domestic car production boils down to simple logistics...If its going to be sold here, its smarter to ship raw matls from there to here and make the stuff here rather than make stuff from the raw matls that are there and pay to ship the final stuff here when the stuff is big, like cars
Kramer wrote: The best thing that could happen to the world is for human rights to be closer to equal everywhere. In the US, unions help establish worker's rights (then OSHA and labor laws came into effect). Also, environmental issues should be similar. Those two things add a lot of cost to goods.
Voting up because it's nicely said.
Clem
ClemSparks wrote:Kramer wrote: The best thing that could happen to the world is for human rights to be closer to equal everywhere. In the US, unions help establish worker's rights (then OSHA and labor laws came into effect). Also, environmental issues should be similar. Those two things add a lot of cost to goods.Voting up because it's nicely said. Clem
I agree, but what's a target date for reaching utopia? Just about the time the sun goes supernova?
I think that it's going to take people voting with their wallets, stop buying cheap imports from X country until X country has basic human rights. The problem is this country is now so addicted to cheap E36 M3 that we are in a symbiotic relationship with country X, we need their cheap E36 M3 as much as they need to sell it to us.
Because one day we might need that industrial capacity for something other than building cars. Also, not everyone should work in banking, technology, etc. There should be options for the guy who doesn't want to sit in a cube all day. Those guys also tend to be incredibly useful when the SHTF. (s*&t hits the fan)
I hope everything is not about a race to the bottom. Cheapest price for the lowest acceptable quality (or less when it can be gotten away with). In the long run, everybody loses in that game.
oldtin wrote: I hope everything is not about a race to the bottom. Cheapest price for the lowest acceptable quality (or less when it can be gotten away with). In the long run, everybody loses in that game.
Yup, but on the way down people appear to be winning.
If I outsource my manufacturing to country 'X' I can save 'Y' and pocket the difference.
So what if I loose 100 US jobs, they were only 0.000000000001% of my customer base and I still win.
The problem is when you multiply the above by 100,000 companies your customer base has gone and moved on to low paying service positions.
The scenario then becomes
If I outsource my customer service to country 'X' I can save 'Y' and pocket the difference.
So what if I loose 100 US jobs, they were only 0.000000000001% of my customer base and I still win.
Now your really in the E36 M3ter unless you’re a doctor or lawyer because you can't outsource those… Or can you, some insurance companies are now sending people off shore for operations and paying them to go as they still come out ahead!!!
The only way to stop this is when people start voting with their pocket books.
oldtin wrote: I hope everything is not about a race to the bottom. Cheapest price for the lowest acceptable quality (or less when it can be gotten away with). In the long run, everybody loses in that game.
I'd like to think so too, but that's often exactly how it is...definitely with cars...
Adrian_Thompson wrote: ....The problem is when you multiply the above by 100,000 companies your customer base has gone and moved on to low paying service positions....
Are you implying that manufacturing positions are high paying?
I think if you look at any numbers (which I do not have) you will see the higher paying jobs in the US are not manufacturing. Not saying there is anything wrong with manufacturing of course, but I think it might be a bit off implying that with fewer manufacturing, the economy will move to service jobs (and I really don't see where all these new "service" jobs will be).
It is also a bit strange to me to have an economy based on paying people to builds a product so that they will have money to buy that product. Seems like some huge economic circle jerk to me...
I think for lower-level jobs, manufacturing pays pretty well. People that would have worked at a plant 30 years ago are working the counter at McDonalds now; I highly doubt that they have equal pay scales. Not to mention benefits better than 10% off fries.
yep because everything will work out great for the economy if we send all of the jobs over seas. You know because outsourcing is our friend right?
Agreed. But currently we seem to have enough McDonalds workers in general. Starting from where we are now, I don't see a huge gain in "service" jobs. Besides, someone needs to do those jobs and in most cases it is probably better that they not make career out of them anyway.
In-N-Out might be a "good" example of this. They pay there workers well, I think they may even get some benefits, but I suspect few would consider a line worker a "career". They do have store manager and above positions of course, they make very good money, very much a career.
I am not saying the US should have a burger based economy, as I mentioned, I think that area is already saturated. But, if someone else is doing most of the labor work, maybe the US can concentrate on higher level tasks / jobs / industries. Clearly this is not an all or nothing situation, but letting someone else do a lot of the dirty work might be a good thing is some ways.
aircooled wrote: It is also a bit strange to me to have an economy based on paying people to builds a product so that they will have money to buy that product. Seems like some huge economic circle jerk to me...
Economics class 101: Suppose (for example) 100 bucks this month. 50 goes to bills, 30 goes to fun and 20 goes in the bank ( a pretty average scenario...I know I know, not all of you subscribe to this philosophy, but just let it ride for this example please
. ) Now, the bank has to keep a certain percentage as actual cash, but the fed allows a portion to be loaned out. So if 100 people deposit $20 this month, and the bank only has to keep 50% (another fictitious example), thats 1000 the bank can loan out. You have to pay people to make stuff so that people can buy bigger stuff (i.e. things you cant afford all at onc: cars, houses, yachts, a brontosaurus, whatever). If no one makes stuff, theres no stuff to buy. If no one buys stuff, no companys have any business selling that stuff. If theres no business, the company doesnt pay you to make stuff. If you dont make any money, you cant deposit any money. If theres no deposits, theres no loans to buy bigger stuff. If no ones buying bigger stuff, then companys close. yaddah yaddah yaddah
It is a vicious circle jerk as you said, but if you look at the logic of it, there really is a method to the madness. Econ was by far one of the best classes I ever took. For once you can say, I really do need to know this because I WILL use it once I get outa here...not like that dumb algebra or history
4cylndrfury wrote: For once you can say, I really do need to know this because I WILL use it once I get outa here...not like that dumb algebra or history
Seems like most politicians slept through econ as well as those other dumb lessons because they never thought they'd use it. Otherwise they wouldn't be making so many stupid financial decisions based on faulty math that are going to doom us to reliving history.
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