patrick.net

Yes, one that is with out Government intervention. Other than possible tariffs for protectionism, if it's called for. But if people are willing to pay as much, if not more for foreign products, after at least import tariffs are imposed. Then it is a bad reflection on the Auto business and needs to be culled by the natural process of Free Market forces, replacing them with a better suited brand, people trust.

What I would truly like to see, is the Auto industry become a platform of modular, interchangeable, components. With a standard that they must conform to, but as motley as Computer hardware vendors and manufacturers.

I see an industry like that creating a Boom greater than Tech stocks could have only dreamed of being.

Tenouncetrout says

Yes, one that is with out Government intervention.

...

With a standard that they must conform to...

Sorry, I'd just like to ask... there seem to be a lot of contradictions in your post and I'd like to check in.

In the lines above you mention gov intervention in the context of being a bad thing, something to be avoided. But then slightly later you recommend that the auto industry have a 'standard that they must conform to' - where do you think this 'standard' will come from and how do you think it'll be enforced? Also, if the mythical 'free market' is to show the best doesn't that rule out tariffs?

And I'd like to side with you on the other idea - the 'modular personal vehicle' - its a neat idea - but I just can't. I think a system like that would be a boon only to the legal industry who would reap the benefits of trying to sort through what would probably be a nightmare system trying to figure out responsibility for failures. I think the 'free market' forces, particularly if unregulated, would tend toward producing cheap parts that wouldn't really work well with each other. I mean, its whats pretty much happened with computers, right? Also, this old gag comes to mind:

http://www.snopes.com/humor/jokes/autos.asp

Tenouncetrout says

I see an industry like that creating a Boom greater than Tech stocks could have only dreamed of being.

Nah, cars are mostly consumption and not wealth-creating capital like computers and networks.

By Government intervention I mean the government giving any company money to stay afloat. Or intervening where a company has an unfair advantage over any company.

By having standards in a Modular Auto Car industry, that's not any different than standards that are in any industry.

There's a whole industry in transportation that has been locked in a bottle in the U.S. since Henry Ford first fired up an assembly plant. The Big Three have controlled the industry by both owning and setting the standard. Toyota is already setting standards on their components, to make them interchangeable between different models, and Car Genre even.

We should be able to pick and chose power sources, and types, from electric to hybrid to gas to what ever competitive industry can dream off, that passes Safety standards, and fit to standard form factors. Match them up with Chassis, Interior, and Body options from multiple companies.

Kit Car industry if you will, but with an ISO support, instead of guys in body shop with sheet metal and hammers pounding out one offs. Then bolting it to a Pontiac Fierro.

As far as legality of who is responsible for the finished product when the end user eventually sets in the seat and turns the key for that first time? Well just like in Construction, there are codes and standards that ultimately the General Contractor is responsible for, build quality. Each manufacture is responsible for the component they made, to spec and ISO standard for that formfactor.

I mean it works in the Building industry? Could you imagine if GM, FORD, and Chrysler were the only ones allowed to build a home in America?

elliemae says

4X says

elliemae says

I’m proud to be able to remain in the US, unlike the rest of you traitors. HA! I say! HA! HA! HA! I’ll joyfull laugh at all of you as you drive past me, blissfully unaware of your impending deportation, as I continue to remain on a first name basis at the GM dealership repair shop.

Not, GM makes vehicles that are just as sound as Toyota….Cadillac, Buick, GMC, Chevy are some of the most top rated vehicles. It your perception that needs to change…
Cadillac Escalade, CTS have been top rated for the past 10 years now…you just cant afford them and choose to buy Honda, Toyota products.
I wink because i know you own a GM, because you told me so in previous posts.

So - Chevy only builds quality vehicles for the elite? That’s a great business model. Probably what has made them #1.

sorry, that came out the wrong way. I meant that the Cadillac brand is out of a lot of peoples price range. As a doctor, I am sure you can afford one.

...not that you personally are poor. My point is that GM has the right concept with their Cadillac line, now they have to get it right with all others. Pontiac was on track as far as design was concerned unfortunately some smart guy thought to end that line.

4X says

sorry, that came out the wrong way. I meant that the Cadillac brand is out of a lot of peoples price range. As a doctor, I am sure you can afford one.

I'm a medical case manager/Social Worker. Not a doctor. I went to school for 4 years and have practiced for over 20 years, and make less than a graduating R.N. I'm not poor, because accorrding to the 2009 poverty guidelines "poor" constitutes $10,830/yr. However, I don't have the opportunity to do alot of things such as vacation, go out a whole lot, etc. I bought a chevy because that's all I could afford.

To be fair, it appears to be somewhat repaired for the moment. But you get what you pay for. And I did.

Troy says

But just like light manufacturing, much software development can EASILY be exported to low wage areas like India and China, knocking the generous gross margins enjoyed by US-based software developers.

This claim has been debunked so many times it's not even really worth arguing anymore. It's almost always made by people who know absolutely nothing about how software (or really, any technology) is created.

Saying that you can "easily" export a software engineering job is like saying that you can "easily" export a product design job or "easily" export an executive or "easily" export a professional athlete.

People who don't know what they're talking about have been making this claim for over 30 years, and yet software continues to be among the top growth industries (both for employment and revenue) year after year.

Kevin says

The insinuation that “foreign” companies are going to buy up our natural resources and deprive us of them is silly.

It's all about capital flows OUT of the country.

England enjoyed pride of position in the 19th century, US in the 20th. The 21st is up for grabs.

Kevin says

Saying that you can “easily” export a software engineering job is like saying that you can “easily”

I'm looking down the road. Sure it's difficult shifting existing development to India or China.

I just don't see our natural monopoly here. And I've been programming professionally since 1990.

Troy says

England enjoyed pride of position in the 19th century, US in the 20th. The 21st is up for grabs.

Oh, shit, I forgot that every other country was poor in the 19th and 20th centuries. Thanks for reminding me.

Troy says

I’m looking down the road. Sure it’s difficult shifting existing development to India or China.

I just don’t see our natural monopoly here. And I’ve been programming professionally since 1990.

It's not about "shifting development". Any technology company worth the price of the products that they create has offices all around the world. They hire the best people they can find, wherever they can find them.

People who are in the business of creating new technology will never want for work any more than people who are in any other applied creative discipline.

As a country, our concern must be on making sure that we strive to have the best people that we can here -- either by molding our own youth, or encouraging gifted individuals to immigrate here.

You're right that there's no "natural monopoly", but there's no natural monopoly on anything, except for natural resources. Natural resources alone don't make you a rich, prosperous nation. At best they might let you have a quasi dictatorship like Saudi Arabia.

Seriously, I think think it's not so important which industry we're talking about. Autos or software engineering it makes no difference. Anybody who believes other countries can't match or even exceed our technological prowess are only arogantly fooling themselves. When it comes to cars, people the world over love American cars. It's only in America that we percieve them as somehow lacking. I've driven literally thousands of cars, and it doesn't matter which make be it beemer or Benz Toyota Honda chevy or ford, after 15 years they're all becoming pieces of crap. If you are concerned with your image and status you probably drive euros, cause you think that shows you're somehow superior. Me, I drive a 15 year old jalopy cause it gets me where I want to go and it's paid for- and I could care less what you think of that.

But the larger point here is it really doesn't matter which industry it is. It could be autos, tooling, toothpaste, almonds, movies, software, drugs, education, hotels, tourism, literature. The key to get people from other countries to give us their money. Take the Vancouver olympics for example. Now I'm not a skier but I had never heard of whistler before, but I guarantee you that the Vancouver region of Canada will be getting lots of foreign dollars for years because of this exposure. That means more jobs to service the tourists. Now you can argue whether those are less important than 'tech' jobs, but every dollar a foriegner spents there is one more dollar they didn't have before. That's more money for bread, gas, Internet service, travel, to start a new business, etc etc etc. This I where china is kicking the living shit out of us. We've arrogantly decided that we're to good to make things because somehow that's not technologically worthy of us. What a load of pretentious crap. It would be nice to see the majority of stuff you buy say, "made in USA", instead of "made in china."

deanrite says

That means more jobs to service the tourists. Now you can argue whether those are less important than ‘tech’ jobs

Nah, tourism is great. A lot of labor-intensive customer-service, all of it "wealth creation" in the sense that wealth is that which satisfies human needs and wants. We forget that Wealth is also an end -- a condition of happy being -- and not just a means!

Every 767 landing on Maui is carrying 300 or so wallets that are going to dump at least $1000 each into the local economy.

At $30K per job that's 3000 jobs supported by each inbound flight (assuming the economy retained that money for several buy-sell cycles to allow the velocity of money to benefit locals).

I've been thinking of doing a SimIsland-type economic simulation since I am horrified at what Maui's become and think technocratic governance could make that an awesome, self-supporting economy.

deanrite says

It would be nice to see the majority of stuff you buy say, “made in USA”, instead of “made in china.”

Not going to happen as long as factory wages there are $1.17 an hour.

http://www.nytimes.com/2010/02/27/business/global/27yuan.html?adxnnl=1&ref=global&adxnnlx=1267262669-mbJ3g7Ye4pHQ4cKxit1xng

deanrite says

Seriously, I think think it’s not so important which industry we’re talking about. Autos or software engineering it makes no difference.

It makes a *huge* difference. Spending our resources developing new technologies will benefit our society much more than spending our resources making automobiles. Mindless production boosts short-term GDP, but it doesn't provide long term benefits to the society.

deanrite says

ut the larger point here is it really doesn’t matter which industry it is. It could be autos, tooling, toothpaste, almonds, movies, software, drugs, education, hotels, tourism, literature. The key to get people from other countries to give us their money.

Getting people from other countries to give us their money only makes sense if those people have things that we need their money to buy.

deanrite says

Seriously, I think think it’s not so important which industry we’re talking about. Autos or software engineering it makes no difference. Anybody who believes other countries can’t match or even exceed our technological prowess are only arogantly fooling themselves. When it comes to cars, people the world over love American cars. It’s only in America that we percieve them as somehow lacking. I’ve driven literally thousands of cars, and it doesn’t matter which make be it beemer or Benz Toyota Honda chevy or ford, after 15 years they’re all becoming pieces of crap. If you are concerned with your image and status you probably drive euros, cause you think that shows you’re somehow superior. Me, I drive a 15 year old jalopy cause it gets me where I want to go and it’s paid for- and I could care less what you think of that.
But the larger point here is it really doesn’t matter which industry it is. It could be autos, tooling, toothpaste, almonds, movies, software, drugs, education, hotels, tourism, literature. The key to get people from other countries to give us their money. Take the Vancouver olympics for example. Now I’m not a skier but I had never heard of whistler before, but I guarantee you that the Vancouver region of Canada will be getting lots of foreign dollars for years because of this exposure. That means more jobs to service the tourists. Now you can argue whether those are less important than ‘tech’ jobs, but every dollar a foriegner spents there is one more dollar they didn’t have before. That’s more money for bread, gas, Internet service, travel, to start a new business, etc etc etc. This I where china is kicking the living shit out of us. We’ve arrogantly decided that we’re to good to make things because somehow that’s not technologically worthy of us. What a load of pretentious crap. It would be nice to see the majority of stuff you buy say, “made in USA”, instead of “made in china.”

...and again, this is exactly my point. We need to be #1 or a close #2 in all industries. Some here think this is unreasonable but i think that we need those jobs here in the USA. We need to influence all industries to follow our lead in order to maintain our economic stability. Someone stated that when all the electronics manufacturing went over seas that I didnt get the point of the offshoring of this industry....however, we lost 3 million jobs to Japan and China.

those could be American jobs, meaning less unemployment and more money circulating in our economy. Not sure why the statement was made that we dont need that industry let alone the auto industry......maybe we are accustom to unemployment and being under employed.

Your thoughts?

DEY TUK OUR JERBS! - South Park

@kevin

It makes a *huge* difference. Spending our resources developing new technologies will benefit our society much more than spending our resources making automobiles. Mindless production boosts short-term GDP, but it doesn’t provide long term benefits to the society.

I think it was you who stated when Reagan offshored the electronics industry in the 80s that we didnt need that industry, I am sure it has something to do with that 3 sector economy you all were speaking of.

Can you explain your theory on the 3 million jobs lost offshoring the electronics industry and your above statement that we shouldnt focus on manufacturing....I feel that we need to be highly competitive in all industries?

Prove that 3 million jobs were lost by "offshoring the electronics industry" (whatever that is). What was the unemployment rate when Reagan took office? What was it when he left? How many total jobs existed in 1981? How many in 1989?

It is absolutely *IMPOSSIBLE* to be "# 1 or a close #2 in all industries". We don't even have a big enough population to make it possible, even if the entire rest of the planet was filled with idiots.

Furthermore, the idea that we MUST be #1 or #2 to "maintain our economic stability" is absurd. What you really mean is "maintain our economic dominance", which is a stupid objective. The global economy is not a zero-sum game.

Would you rather live in Greece in 700 BC, or in Greece today? After all, in 700 BC Greece dominated the global economy, and was a leader in nearly every industry. Clearly that must have been a better position to be in than their current state as a financially troubled component of the eurozone.

Kevin says

Prove that 3 million jobs were lost by “offshoring the electronics industry” (whatever that is). What was the unemployment rate when Reagan took office? What was it when he left? How many total jobs existed in 1981? How many in 1989?
It is absolutely *IMPOSSIBLE* to be “# 1 or a close #2 in all industries”. We don’t even have a big enough population to make it possible, even if the entire rest of the planet was filled with idiots.
Furthermore, the idea that we MUST be #1 or #2 to “maintain our economic stability” is absurd. What you really mean is “maintain our economic dominance”, which is a stupid objective. The global economy is not a zero-sum game.
Would you rather live in Greece in 700 BC, or in Greece today? After all, in 700 BC Greece dominated the global economy, and was a leader in nearly every industry. Clearly that must have been a better position to be in than their current state as a financially troubled component of the eurozone.

Good points, however, with 15 million unemployed in the US i would have to assume that by inshoring those 3 million jobs would come in handy. This was not meant to prove anything, just a question that I was seeking answers for.

Per Wiki:....we need to take this back.

Due to its high concentration of electronics companies, dominant global market share in electronics, and high quality of its products, Japan is the largest consumer electronics manufacturer in the world. Japanese companies have a reputation for high quality and innovation, having introduced products such as the Sony Walkman and VHS recorder.

Japan's success overpowered the United States consumer electronics industry. Unproved charges of dumping and other predatory practices led to orderly marketing arrangements by Japan in 1977. Restraints limited the export of color televisions to 1.75 million units annually from 1977 to 1980. The agreement gave some protection to the United States' domestic industry. Japanese companies responded by investing in the United States, by the end of the 1980s, only one United States-owned television manufacturer remained.[citation needed] The Japanese electronic industry as a result has maintained its dominance in the market over the United States, and maintained its export strength in this field due to the high reputation of its electronics.

Japan's overseas investment in the consumer electronics industry was motivated by protectionism and labor costs. After three years of voluntary export restraints, seven Japanese firms located plants in the United States by 1980. Japanese firms continued production of the most technologically-advanced products especially in Japan but also U.S., while shifting production of less-advanced products to developing countries, such as Taiwan

4X says

Good points, however, with 15 million unemployed in the US i would have to assume that by inshoring those 3 million jobs would come in handy. This was not meant to prove anything, just a question that I was seeking answers for.

If the United States stopped buying things from other countries we would have a higher unemployment rate than we do today. You simply fail to see this because you don't understand economics at all.

Kevin says

You simply fail to see this because you don’t understand economics at all.

Economics is a complex subject and I honestly don't think anyone really understands it.

Economics is essentially the study of scarcity but modern productivity has turned this on its ear. If everyone had access to the capital to engage in productive enterprise suited to them we could collectively create immense amounts of hard wealth, much more than we are capable of consuming.

So much of the national income goes to wastage in excess labor output devoted to luxury goods and economically meaningless services.

No economy can detach itself from the fundamentals of wealth-creation indefinitely. Smith's theories of comparative advantage are useful but not the final word on the long-term wealth of nations.

Kevin says

4X says

Good points, however, with 15 million unemployed in the US i would have to assume that by inshoring those 3 million jobs would come in handy. This was not meant to prove anything, just a question that I was seeking answers for.

If the United States stopped buying things from other countries we would have a higher unemployment rate than we do today. You simply fail to see this because you don’t understand economics at all.

well help me understand...it sounds like what you are saying is that if we were the #1 producer of all goods for the planet we would be no better off than we are now. Explain?

I am confused, not being argumentative.

Kevin says

If the United States stopped buying things from other countries we would have a higher unemployment rate than we do today. You simply fail to see this because you don’t understand economics at all.

Fact: There is a massive and unsustainable imbalance that gives us cheap tube-socks right now in exchange for ruining our society and impoverishing our future.

Squanderville vs. Thriftville

text-formatted article

4X says

it sounds like what you are saying is that if we were the #1 producer of all goods for the planet we would be no better off than we are now. Explain?

Comparative advantage means eg. instead of paying $10 for a domestic manufacture we pay $2 to China and then spend $8 on something else we want. If this "something else" is a good or service of domestic origin then we're probably ahead, wealthwise. Just paying people to work isn't a solution, they've got to be productive, too, otherwise we're better off just paying the $2 to China and paying people not to work.

The problem with this is that the economy is more than an exchange of goods and services at efficient price levels and not all goods and services enrichen us equally. There's a lot of rentierism going on which taxes efficiency and diverts the velocity of money into unproductive products of labor. Ie. the factory owner being driven around in his Audi A8 doesn't make the factory town any richer.

The story of globalization so far is winners among people whose jobs can't be sent to India or China (eg. politicians, newspaper publishers and opinion column writers), an uneasy middle class, and a largely f----ed working class that has to figure out how to make a living in this world.

Troy says

4X says

it sounds like what you are saying is that if we were the #1 producer of all goods for the planet we would be no better off than we are now. Explain?

Comparative advantage means eg. instead of paying $10 for a domestic manufacture we pay $2 to China and then spend $8 on something else we want. If this “something else” is a good or service of domestic origin then we’re probably ahead, wealthwise. Just paying people to work isn’t a solution, they’ve got to be productive, too, otherwise we’re better off just paying the $2 to China and paying people not to work.
The problem with this is that the economy is more than an exchange of goods and services at efficient price levels and not all goods and services enrichen us equally. There’s a lot of rentierism going on which taxes efficiency and diverts the velocity of money into unproductive products of labor. Ie. the factory owner being driven around in his Audi A8 doesn’t make the factory town any richer.
The story of globalization so far is winners among people whose jobs can’t be sent to India or China (eg. politicians, newspaper publishers and opinion column writers), an uneasy middle class, and a largely f—-ed working class that has to figure out how to make a living in this world.

ok, now that makes sense in the fact that since we have lost our comparative advantage and wage payin jobs are going overseas to our 40:1 comrades. Looks like a rework of WTO, NAFTA and GATT agreements is in order to prevent those jobs from leaving. Sir James Goldsmith reccomended that we only have free trade with "like" economies and not with 3rd world nations whose wages are 40 times lower.

Elliemae shall bend over and take this one.

Her car is outta the shop. It's doing well. Or so she thought...

http://money.cnn.com/2010/03/02/autos/GM_recall/index.htm

At this rate, I'll not have to worry about gas costs. I can't get a tank full before it visits the shop again.

Any society (country, empire, etc.) that no longer produces its own goods is done, over with.
We can have all the professional sector service economy stuff we want, yet we make nothing.
Sorry, it's over in the long run. Manufacturing is where it's at.

I'm often bemused by the eagerness of those who are (presumably) not millionaires/billionaires to jump to the defense of certain policies that have helped steadily transfer the wealth of our nation from the many independent manufacturers/business owners into a few blue serge pockets on Wall St.

Sir William Goldsmith (incidentally, a billionaire) had some very interesting and prescient observations to make regarding our trade policies back in the early nineties, perhaps best summarized by this:

"...one of the characteristics of developing countries is that a small handful of people controls the overwhelming majority of the nation's resources. It is these people ... who assemble the cheap labour which is used to manufacture products for the developed world. Thus, it is the poor in the rich countries who will subsidize the rich in the poor countries".

Quite a template for advancing the global community.

But hang in there folks; the age of automation will eventually wrest us all from the drudgery of toil, manufacture and craft. We can lay around and eat chips and dips while a fleet of cheap, self-propagating Daleks take over the heavy lifting.

I'll stick with my US made Honda. I think they build Civics in Ohio.

I dispute the parts of the article which implies that it's OK not to have electronics, textiles, etc produced in the US. We need those industries also. Not everybody is cut out for a management position.

Austinhousingbubble says

But hang in there folks; the age of automation will eventually wrest us all from the drudgery of toil, manufacture and craft. We can lay around and eat chips and dips while a fleet of cheap, self-propagating Daleks take over the heavy lifting.

I assumed this was the way the world worked until the dotcom bubble, where we were creating a lot of wealth yet home prices just rose to match incomes, and then some.

This troubled me but I did not have an intellectual framework to plug in what was the difference between real estate valuation and other forms of capital.

Then I came across Georgism, and then, later, Mason Gaffney's _The Corruption of Economics_, and the difference between land and what the neoclassical schools call other forms of capital became pretty clear.

Whoever owns the land will always take their share of the producer surplus. There's never enough land, not until we start making floating colonies or moonbases.

Troy says

There’s never enough land, not until we start making floating colonies or moonbases.

Bzzzt, wrong. There's never enough land if everyone wants to live on a plantation. Otherwise there's plenty of LAND for just living on. The USA is still from a 50,000 foot view largely empty.

Land suitable for farming? Maybe. The USA has not even begun to see starvation for "land" in raw sense. Clean drinkable water, now there's an issue that may bring some consternation in my lifetime.

Back on topic. I love my 1997 Toyota Camry and will not part with it until it falls to pieces beneath me. A very solid and fixable car. But before that I had never owned anything that wasn't a GM product. I still think they have potential for comeback but should they? Must we surrender industry entirely?

Maybe the debate is wrong. Maybe it's time for a NEW American car company not burdened with the legacy of 50+ years of making the same crap? The choice to bailout GM was I think wrong because it keeps the Big 3 in place and they will by their mere presence crush upstarts.

I have hopes Tesla or SOMEONE will come along and show what is possible. After all corporations like people get old and fossilized, the difference is we prevent the corporations from dying when they probably should.

The current trade imbalances are temporary. As soon as China can’t sell tube socks for $1 anymore because they can’t find people willing to work for ten cents an hour,

Except that, despite how capitalist China looks these days, they're a communist nation. A rather big factor to leave out of the equation.

sorry, they’ll NEVER be made by humans in america again, despite all the wishful thinking).

I doubt if anyone is pining for the golden days of tube sock manufacture (although nothing beats a hand-linked toe). That said, you will never see a fully automatized manufacturing base in your lifetime.

Furthermore, if we stopped importing most of the cheap crap we import from China, NOBODY would make that stuff at all.

Sounds like progress already!

You think McDonald’s is going to put little plastic toys into happy meals when they cost more than the food?

Now there's a sacred cow. Are Happy Meal toys considered durable consumer goods? They certainly don't hold up well as fodder for your viewpoint. Fuck 'em, besides -- kids shouldn't be eating that dogshit anyway.

If it wasn’t for the child slave labor making those things, they just wouldn’t be made, and not importing them would not lead to any new jobs in America (though it would lead to fewer jobs in China, which means less need for infrastructure, which means less money for American firms like GE and Caterpillar)

No. If according to you, the current trade imbalances are only temporary, (vague), then you will simply see the Chinese eventually buying their own goods and services.

Why such a vocal proponent of what is clearly a fucked and failing system? Are you importing the plastic bits that go on the end of shoelaces or something?

Austinhousingbubble says

Why such a vocal proponent of what is clearly a fucked and failing system? Are you importing the plastic bits that go on the end of shoelaces or something?

I agree with Kevin. I don't think he's really a proponent, just a realist.

Austinhousingbubble says

..... importing the plastic bits that go on the end of shoelaces or something?

Aglets, they are called aglets.

4X says

It is a known fact that today we are raising families on 2 incomes, where as in the 1950s where the prices matched the salaries families were being raised on a single income. Home prices do not match the incomes, food costs do not match the incomes, transportation costs do not match the incomes.
Lets say a person makes 45K a year or $2200/mo:
Mortgage on a 1600/SQFT home in LA: $2500/mo
Rent a 1600 SQFT home: $1500
Food: $600
Auto Insur: $100
Auto Car note: $300
Auto Gas: $400
In this scenario whether you rent or own you will need to downsize to a cottage in the ghetto in order to survive, so most parents realize they need a dual income household which leaves the children to raise themselves.

Luckily, the US as a whole is not well described by using LA as an example.

I agree with Kevin. I don’t think he’s really a proponent, just a realist.

Then perhaps you, too, are a pathological contrarian ; )

When someone frames the disastrous reality of our free trade agreements (including "child slave labor") so glibly, it's hard not to see it as something of a defense -- or at the very least, acceptance of the status quo as a necessary evil for industry.

This notion that we *need* to buy crappy baubles from China so that China will, in turn, have money to buy our raw materials or the plastic injection molding apparatus to manufacture said baubles to perpetuate a vicious cycle? Complete nonsense. Show me hard evidence that the Western world would implode like The Great Pit of Carkoon if this all went away tomorrow.

Here's the reality: the American middle class has not been advanced or enriched by free trade (unless you measure the debt to fund it as wealth) -- on the contrary, it has been subsidizing its own slow demise. The system has failed.

Aglets, they are called aglets.

Ah! I knew there was a name for them, but couldn't remember.

jvolstad says

I’ll stick with my US made Honda. I think they build Civics in Ohio.

The point of the post is that you do not support as many American jobs as you do Japanese nationals.
This is not including the supply chains, which may or may not be the same parts companies shared by all auto-manufacturers.

Ford = 70K American Workers
Toyota - 70K Japanese Workers, 7K American Workers
Honda - 25k American Workers

As we discuss more and more, I think it best that no one company dominate as in all (Toyota, Honda, Nissan, Ford, GM, etc.) most likely create about 500k in American jobs. Should 1 fail, it would not be good....especially FORD or GM.

tatupu70 says

4X says

It is a known fact that today we are raising families on 2 incomes, where as in the 1950s where the prices matched the salaries families were being raised on a single income. Home prices do not match the incomes, food costs do not match the incomes, transportation costs do not match the incomes.
Lets say a person makes 45K a year or $2200/mo:
Mortgage on a 1600/SQFT home in LA: $2500/mo
Rent a 1600 SQFT home: $1500
Food: $600
Auto Insur: $100
Auto Car note: $300
Auto Gas: $400
In this scenario whether you rent or own you will need to downsize to a cottage in the ghetto in order to survive, so most parents realize they need a dual income household which leaves the children to raise themselves.

Luckily, the US as a whole is not well described by using LA as an example.

Yep, however, both coasts are the same. Rural America has its own troubles with much slower economies.

The trade deficit ex-petroleum went to 1998 levels in 2009:

SF ace says

Yes, the US needs a vibrant auto industry but the changes must come in two fronts:
Stiffen the tariffs on BMW’s Lexus, Mercedes, etc. When people choose to buy them in lieu of the tariff overwhelmingly over say a Cadallic, then our tariffs are too low. The balance is out of whack. It is not like Europeans, Japanese are driving Cadallacs. You don’t see European trucks and SUV’s on the American soil as much, so I bet the tariff is stiffer on these items.

I hear that BUICK is huge in China, Japan and Europe. I think the foreign markets and American trucks are keeping GM/FORD afloat for now....there seem to be some changes in the direction of FORD/GM as their old BOATS are not around any longer. Ford has the EDGE, ESCAPE, FLEX, FOCUS and FUSION which are targeting the economy class vehicles pretty well. FORDS Lincoln line isnt the best designed luxury vehicle and most likely would benefit from a EURO design. GM/CHRYSLER on the other hand havent seemed to shifted their focus. Outside of Cadillac I dont really see any viable options for economy class vehicles with the EURO styling.

Of course, determining an appropriate tariff is a delicate balancing act. There are probably thousands of different tariffs on different item with different countries and works both ways. There are probably general trade agreements and parameters to abide by. It is time to hire specialist to look at each items and we’ll need to start from scratch and draft a new agreement. 5M manufacturing job loss to overshore manufacturer is simply unacceptable. Manufacuring also supports capital and related industry. If nothing else, that trend has got to stop. If other nations lodge a protest, which could damage trade relations, so be it. Not just on cars, how about cell phones, furniture, chips. Some of these should be manufactured in the US. I understand some things like clothes and shoes are lost cause, even if it is still ultimately imported we should impose higher level of tariff. The $$ should be used to fund other manufacturing incentives that can be done here at a strategic level. Ultimately, it just feels like we are on the short end of tariff policies and that has to changed.
Of course, tariff’s are no good unless the car manufacturer raise their game! There is simply too many undesirable junk domestic brands. Think of the Chrysler brand, that is a horrific lineup and no amount of tariffs will help. US cars have no/weak branding even domestically. Cars are one of those things you have to get people excited about. The most identifiable US brands, the Escalade, F150, and Corvette are flawed on the premise of relying on cheap gas. We can’t compete on the high end against BMW’s and Mercedes, and we can’t compete on the low end, like the Honda’s and Toyota’s because of their profit margins. There is simply no profitable market left when the gas guzzler market left.
The definition of management failure is “auto industry”. Like any manufacturing concern, you compete on branding, costs and/or technology. It seem like all these companies did was add more confusing brands and options which is not a competitive advantage. How did we get to a point that we cannot compete on neither of these things? Maybe one company, but all three companies? What exactly did the executives in these companies did to earn their pay? Granted, car manufacturing is a complicated business but it seem like we knew nothing about our competitor while our competitor knew everything about us. It’s not like there is a lot of big inherent advantage in manufacturing a car in places like Japan and Germany.

..and then again do we want to ruin the markets for TOYOTA, HONDA, and NISSAN who combined employ 100K Americans. Tough call....and I know I am going against my statements but ultimately all I care for is a strong American economy.

The deep recession is actually a blessing for the US auto industry in a way as the business model and direction was severely flawed and it takes something like this to make philosophical and structural change. It is not like selling any car is easy nowadays considering the economic conditions, but in 2-3 years, we’ll be back on record setting sales and hopefully by then, the US manufacturer will have risen their game and sell a fair share domestically and internationally. Auto industry employment will be back. Look at what is happening to Toyota, we can take share back, only when we manage the companies diligently.

I have a feeling that HONDA or NISSAN is going to overtake TOYOTA as the number 1 vehicle sold in the US....NOT FORD OR GM. Reason being is that Ameircan car manufacturers have a stigma that is working against them with the American people. American people do not have principles and continue to tout American vehicles as the BOATS of yesteryear that break down or have transmission problems. When in reality, FORD definitely turned around their safety, reliability ratings after 2007....GM maybe not so much outside of their CADILLAC lines. But when havent Cadillacs been solid vehicles. Both GM/FORD need to invest in a EUROPEAN design for their future vehicles to stick....similar to what TOYOTA, HONDA and NISSAN have done.

4X, I don’t feel any less American buying a foreign brand. In fact, probably tariffed a fair amount to compensate in lieu of being built in the US. However, true protection comes from within, if you build cars people will buy on their own and is profitable, that is true protection and strengh and a better reason to be proud

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That being said, CADILLAC is the king of the road today with their CTS, DTS, ESCALADE and SRX models. If ESCALADE were reasonably priced it would most likely be the number 1 seller in the world. GM/FORD are working hard to turn around 20 years of stigma that was based on factual data that found their vehicles had tons of issues.

It will take about 10 years I suppose, then hopefully the markets will be ours to dominate.