Dravur
Member
MacroEcon needs to be taught in schools....
Seriously, grab an econ book and go nuts. Simply put, the car companies and the unions priced themselves out of the market. When GM has to pay someone $40 an hour, plus burden, to punch a rivet and Toyota can pay $13 an hour....one of four things will have to happen for GM to be competitive....
Mechanize...Make a robot that can do that job.
Move the job...Next stop..Mexico
Close down as inneficient.
Hope the buying public can be conned into paying more for the same or lesser quality.
This is the way the world works. If you can bring the same or better quality into the market for a cheaper price and one of your main contributing factors is wages, you don't have a lot of choice.
If we were protectionist, the buggy whip manufacturers would have LOVED that. Also, there is a huge slippery slope when you start screaming for protectionism. For every $ you place on their heads, they place the same on our corn, for example. Protectionism is a tax on the consumer to keep an inefficient business in business...
This assumes just the one factor. There are many factors that also come into play, such as shipping costs, availability of raw materials, available talent and ease of entry.
Seriously, grab an econ book and go nuts. Simply put, the car companies and the unions priced themselves out of the market. When GM has to pay someone $40 an hour, plus burden, to punch a rivet and Toyota can pay $13 an hour....one of four things will have to happen for GM to be competitive....
Mechanize...Make a robot that can do that job.
Move the job...Next stop..Mexico
Close down as inneficient.
Hope the buying public can be conned into paying more for the same or lesser quality.
This is the way the world works. If you can bring the same or better quality into the market for a cheaper price and one of your main contributing factors is wages, you don't have a lot of choice.
If we were protectionist, the buggy whip manufacturers would have LOVED that. Also, there is a huge slippery slope when you start screaming for protectionism. For every $ you place on their heads, they place the same on our corn, for example. Protectionism is a tax on the consumer to keep an inefficient business in business...
This assumes just the one factor. There are many factors that also come into play, such as shipping costs, availability of raw materials, available talent and ease of entry.