[Jamo]

Well, let's break it down, shall we?

Originally Posted by clayfoushee

Funny on the German/Japanese Dr. deal. Except, we're talking about parent company, home-country costs, and the majority of their workforce.

Hmmm...the fact is, for many of their most important models (things like Camrys and Altimas), they build right here. Why? Not only do they avoid transportation costs...the Japanese cite lower cost labor as one of their reasons. Now, why would they say that? See below.

The foreign manufacturers haven't been here all that long, as you well know, and the "legacy" costs haven't caught up with them yet. And yes, with regard to transportation costs, that is one reason they built U.S. plants relatively recently, and the other reason was "political." They chose their places well in traditionally non-union states, got major tax breaks/assistance from those states, and put themselves in locations where a "Toyota plant job" was far superior to anything else available. All they do here is assemble. The intellectual capital and technology development happens off-shore.

They've been here long enough to learn about our labor laws...by watching the mistakes our own Big 3 (used to be more than three, it seems to me, but we lose a few during every cycle of awareness we go through). The Japanese plants are just not sitting in right-to-work states. There is, obviously, no such thing as a no-union state...wished there was. Only thing that happens in a right-to-work state is that you don't have to join a union to work, ie., closed or union shops are illegal. Non-members still have to pay a union a representational fee equal to union dues, but can withhold other fees and charges associated with political contributions or call girls for the union bosses. Be that as it may, the lack of legacy costs has little to do with the age of the workforce, and more to do with whether outrageous retirement benefits are granted. With no union, there are more reasonable retirement benefits. GM is paying such extreme healthcare benefits to its retired workers that few go on medicare. As to leftover defined contribution funding liabilities, GM and the others have been bringing those down dramatically over the past decade from profits gained from smoothing camper shells on the backs of pickups and calling them SUVs and charging a bunch more for the same platform...that gravy train is over. GM, Ford and Chrysler have all built new plants during the last 30 years that the foreign mfgs have been here for engines and subassemblies...they had the same choices as to where they might build them, and they enjoyed more than a few taxbreaks over the years both for new plants and in refurbishing old ones. Ford got so much help from Michigan when they redid the River Rouge plant that a medium-sized African nation's despot would've have been tickled with the fortune gained. As to where design and technology occur for these foreign mfgs, maybe you've lost sight of all of the major European and Asian design studios in Southern California...see, they pay attention to what folks will want to buy in the future right where the future market first appears...Southern California (the only real place left on this planet where innovation continues to occur, whether it's the design for a car or how a Hmoung can feed five generations of folks from a few acres of strawberries). Our own dumbasses are blind. Case in point...Ford builds the great little Fiesta in several nations, designed in Europe, and we're only now going to get it. GM is bringing over Aussie vehicles whenever it can, and they are winners...if they can keep the Michigan designers' hands off of them. But you're right, the Big 3's intellectual capital and technology for the American market is kept in the bowels of the accounting department, which has to figure out how to pay for union wages and benefits instead of creating the best car they can.

There is a body of theory in sociology called "relative deprivation." Revolutions never start when people are at the bottom. They begin when people have something and start to lose it, or they begin to want more. This is relevant to the "legacy cost" issue.

Guess this point was lost in France circa late 1700s. A few heads at the top need to go me thinks. I don't blame just the unions...some azzholes keep giving in to them.

Right now, the average US foreign-manufacturer worker is much younger and feels relatively lucky even though he/she gets less in terms of overall compensation. Over time, they'll want more and more, which is what happened to the Big 3.

You keep talking like the foreign-mfgs just started building here a few weeks ago...they've been around for a few decades now (Honda-Ohio in 1982), and they have beat the union organizing drives on a consistent basis simply because they do a better job managing the jobs and folks don't feel the need for third party representation. Over time, they will appreciate the fact that their employer is still standing and they are being treated right with pay according to their ability rather than watching morons getting increases because of seniority because they can't be fired.

Many also forget that the Big 3 signed a deal with the UAW last year, which will greatly reduce their health-care and benefit costs going forward and make them more competitive with the foreign competition. However, that deal doesn't cut in until Jan. 2010. With the current economic crash, they won't make it until then.

It's a simple two-tiered system that many industries adopted decades ago (Retail Clerks in the supermarkets in the late 70s)...just shows how far behind the Big 3 are in their labor relations. Forget dates, they won't kick in until the old phuks that can't be fired, or are layed off at 80-90% of their pay, or retire with huge benefits move on or pass on. Decades from now...we'll be thinking about GM in the same vein as American Motors or Rover.

I'm sure you're well aware that Toyota, Honda, Nissan sales are also down 30+% in the US, similar to Big 3 sales. If economic conditions get appreciably worse, which they well might, we might even start seeing them shuttering U.S. facilities as well. Meanwhile, back home, their Govs. will make sure they do not go out of business.

When the economic downturn turns...who is better placed in the market? They export many of the vehicles they build here...again, it's cheaper for them. Gotta wonder what they see that Detroit doesn't.

It's not about inferior products anymore. I don't believe the Big 3 products are significantly inferior anymore, and most of the relevant stats support that statement.

No...but they have relied too heavily on the wrong products, and they can't move quickly enough to absorb some hits...not when you have to continue to pay laid off folks not to work.

Love ya buddy.