Tariffs to Help Domestic Manufacturers?

lemko

...and definately a blatant disregard for safety. Back in the day anthracite coal mine owners cared more for their mules than their workers.

"Mr. Gowen! A terrile gas explosion occurred at one of our Schuylkill County mines! Fouteen miners and three mules were killed!"

"Three mules! Heads will roll!"

The Mollie Maguires sure had a solution for this mentality!

brightness04

What's a PT? Just curious.

The problems of engineering and electrical can due to either poor workmanship or lacking extensive testing ahead of time in the design and engineering phase of the product development. In companies where union demand has lost touch with reality (such as places where members consider $19/hr beneath their consideration when other people are lining up to do the same job for $14/hr; oh, the union members had been doing the job for $40 or even $60 an hour before reality intruded and showed the productivity of the job is only worth $14), corners have to be cut somewhere.

MB is a classic case of a company following that trajectory. VW is dependent on how it can capitalize on its global presence and wiggle free from the state government of Lower Saxony.

m1miata

So will China built cars some day match or exceed those of Korea, or even Japan in build quality? Will people in America buy them? Get the crystal ball out now and see into the future.....

Will the Hyundai Sonata and Azera prove to be long term durable? Is the initial quality a good indicator of long term durability?

Will Korea and China get into dumping cars to get market share and thus trigger tariffs???????

As for me, I am still trying to figure out what the GM " An American Revolution " means and what the Ford " Bold Moves " are. Hope those two make it into the next decade. A lot of heritage - a lot of jobs.
-Loren

m1miata

Oh the PT is for PT Cruiser.

The PT and Ford Fusion, both are made in Mexico, with great initial quality scores.
-Loren

brightness04

Not sure why Mr Gowen will be a transformed humanitarian if he becomes a government official when Schuylkill County Mines is run by the county. The same irresponsibility and callousness of the man in charge will take place (whether his name is Gowen or something else), only that mine workers will have nobody else to turn to for a job. If the county and all neighboring Countties set up a registered public healthcare and retirement system for local residents only (everyone hates "freeloaders" coming from out of town), then the workers can not realisticly move out of the county either. They effectively become fuedal serfs of Mr Gowen.

brightness04

I thought PT was Chrysler. Somehow I was scratching my head for a VW PT :-) Silly me.

I do share the opinion that outsourcing is a way of getting away from the 3-generation decline cycle.

brightness04

IMHO, If GM and Ford can survive the next few years, they will do fine . . . because the Germans are already on the decline (for a decade), and the Japanese will follow early next decade as their 40-year/3rd-generation mark hits.

Chinese manufacturers are terrible at building their own brands. Know any significant Chinese brands out of all the stuff we see at every store? Not that I'm aware of. GM and Ford can make a killing arbitrarging their brand equity. That's why it is critical for GM and Ford to cut production in the next few years and prevent further brand dilution through discounting.

lemko

Oh man, I've been saying that all along. Pretty soon we'll be seeing ads like this:

NOW HIRING
POTATO PRODUCT TECHNICIANS
BEEF/WHEAT COMMODITY ENGINEERS
CUSTOMER COMMUNICATIONS INTERFACE SPECIALISTS
$6.5O/HR.
NO EXPERIENCE NECESSARY
BACHELOR'S DEGREE REQ'D/MASTER'S PREF.
APPLY McDONALD'S

lemko

Hope this telephone conversation is currently happening.

"Hello, Ken? It's me, Satan. Could you give our new resident Saddam a walk through the place? He just got here Saturday morning."

lemko

The only guys you'll get working for $10 around here are the poor, uneducated, and desperate. Plus you'll draw a lots of screw-ups, goldbricks, and folks who'll rob you blind.

m1miata

I would settle for employees at take-outs with listening skills, and basic math skills. College doesn't seem to help at all. Many of the local students of hire education can not seem to be able to count back change to save their lives. Be very careful not to confuse people with extra change to get bills only back if you have not presented the change before the register entry. Some can of course make change, but you are taking a risk.

As for outsourcing. Seems like us tax payers should not be too happy with our government buying products from large companies that are outsourcing their tech. There goes our money spent of defense (aircraft) to a company which is hiring foreign workers. National security is no longer an issue???
-loren

rockylee

Well many of us in my generation will be forced to work for those wages lemko. :sick:

Rocky

lemko

The only significant Chinese brand I know of is Haier, the manufacturer of cheap refrigerators and air conditioners.

lemko

Pretty much why I choose to be a genetic dead end. If I'm going to have it so tough in the future, I shudder to think of the world in which my children and grandchildren would be living. Of course the sad thing is that they'll be desecrating the graves of the babyboomers who greedily flushed away the prosperity our grandparents built.

rockylee

Yeah I agree......Many baby boomers hosed the future generations :sick:

Rocky

m1miata

Ah, the decline and fall of the great Roman Empire. Let others fight your wars. Oh well, has nothing to do with tariffs..

Are you saying ATK Alliant Tech is outsourcing munitions?
CCI ammo too? Or is this some other ammunitions.

Come to think of it, many Japan branded items are now made in China.

Time for Mexico to ramp up production. I assume that India is going at a fast pace.
-Loren

m1miata

What does that mean? The babyboomers were not in power in Washington DC during the years when the Vietnam War and other large expenditures erased the S.S. account money which was spent as it came in. They are in power now, and are just as wasteful of tax payers money. A trillion for war and such, but the waste of money started decades ago, and not by very young men and women. If you mean they have not saved money, that is true for some, but not for all. I am in my fifties, worked as previous generations did, and saved some money. How different is that? Perhaps a few less lawyers in the World would help, as it seems this has contributed to inflation of health care and other products.
-Loren

m1miata

I don't know, the standard of living appears to be going higher. Have you seen any data which indicates a falling economy? Housing is so expensive in Calif. these days I, like many others, will likely move on one fine day. Must be a lot of people making a lot of loot though to be purchasing homes for over $500K. Many around here at over $600k and in Santa Barbara if you have to ask, you can't afford it. I take it plenty of people are making five times what I did when I was working by the hour.
-Loren

lemko

A coworker of mine is married to a Japanese woman. He went back to Japan to visit her family for the first time in 15 years and spotted middle-aged men living in cardboard boxes in railway stations - something that was unheard of 15 years ago. Sad.

rockylee

Loren,

Most of us aren't as wealthy as you California's. I don't know how anyone could afford to live in California. You take a factory worker their is now was he's make 6-digits is he when you could pay 1/3 of that in the south ?????

Rocky

rockylee

WOW............I did not know that. I can't picture poverty in Japan. :surprise:

Rocky

lokki

To wrap this whole conversation before the end of the year, here's the way I see it:

1. Will tariffs save the U.S. car manufacturers?
No. The foreign manufacturers are already here. They'll just build more factories, here. Additionally in the 1980's we learned that the American people will pay more for a car with less comfort and power if they believe it's a better car. Nothing but better products are going to save GM or Ford.

2. Will the demise of the big 2.5 destroy the U.S. economy?
No. See above. The demand for cars still exists. The U.S. car factories will just be Honda, Hyundai and Toyota factories

3. Could GM and Ford ever become kings of the U.S. auto market again, even if they made 'perfect' products? No. Those days are over. There was a freak period between 1930 and 1980 for the U.S. makers that will never come again. In the 30's there was no incentive for foreign companies to come here during the depression. During the 40's the war prevented it. During the 50's the foreign companies had no factories. By the 60's they began to nibble but didn't have the product. In the 70's the triple curse hit: Oil prices, lousy designs, and lousy quality. Hellllllo Toyota. In the 80's voluntary import limits brought the foreign companies to the U.S.

4. Is unionization going to die?
No, but the unionized American Auto workers are fading, following the same fate of the Airline mechanics whose featherbedding contracts are being broken by bankruptcies. Recall the United Airlines Mechanics President's quote?

We don't want to kill the golden goose,'' he said. "We just want to choke it by the neck until it gives us every last egg." Hello UAW? Delphi's fate was your final warning.

For the Unions to survive, you're going to see unionization of the the undocumented workers. The UAW Bosses going to learn Spanish.

4. Is the demise of the American Auto makers a bad thing?
A sad thing? Yes. A bad thing? Not necessarily. The world moves on. Anybody recall Xerox and IBM? How about Bethlehem Steel? Zenith? America didn't collapse when they did.

5. Will Rockylee ever change his views?
No. He's welcome to his religious beliefs. But don't forget to pray Rockylee, because the ice age is coming for the dinosaurs. Everything changes.

rockylee

lokki -The Norse God is Mischief http://en.wikipedia.org/wiki/Loki :P

You have it all figured out and we don't have to wait until next year for the answers.

Rocky

explorerx4

Rocky,
Happy New Year. You ought to be on 'Myth Busters'.

imidazol97

Interesting, since some of the info in the post don't computer right. When did Toyota first start merchandising their rust buckets here in US?

rockylee

ROTFFLMAO "explorerx4, I wouldn't go that far"

You and your family have a "Happy New Year" also.....

Rocky

rockylee

Interesting, since some of the info in the post don't computer right. When did Toyota first start merchandising their rust buckets here in US?

You'd have to as lemko, fintail, Socala4/pch101 for that answer. I would guess it was in the 60's. Hell I couldn't tell you which brand from Japan was the first to enter our shores. Datsun? or however you spell it was a foreign car so many of you jock and it seems like a old brand. :P

Rocky

british_rover

Probably honda as they were selling motorcylcyes here back in 1958 or 1959.

rockylee

That's what I assumed but I was more interested in the automobile side which I believe they still might be the first ones ?????

I know for a fact that one of our regulars knows the answer.

Rocky

rockylee

Quick question british_rover. How long does it take for a Range Rover supercharge to depreciate 50-60% ????? 3 or 4 years ????

Rocky

british_rover

Well they haven't been out three years yet since they were only launched a little less then two years ago.

But in general Range Rovers usually end up at or around 50% after three years. After that the deprecation curve starts to level out so it is not as steep after year four. Basically just like every other luxury car/truck it is just that first year of depreciation that is killer on a Range Rover. The first year depreciation on the fully loaded Range is around 20,000 dollars or between 18 and 22 percent.

Oh and according to wikipedia Toyota was the first japanese car to be imported into the US in 1957.

http://en.wikipedia.org/wiki/Toyota#History

rockylee

Okay thanx........

I will keep that in mind. The west minster edition appears to be the top of the line one to look at in another year or two.

Rocky

P.S. Toyota, was it then........

m1miata

1957 Toyota sold the first car in USA. Ya know those Datsun 510 sedan were decent little cars. I think the date on those starts around '68. Then there was the Datsun Z cars. The first Subarus and Hondas did not look like much = toy cars. I would say momentum was picking up for Japan cars around mid-60's, but they were still a small player, as you know.
-Loren

m1miata

HAPPY NEW YEAR EVERYONE !
:shades: :shades: :shades:
-Loren

lemko

I believe it was 1957. The Toyopet Crown looked like a 5/8 scale 1954 Plymouth. They couldn't handle American driving conditions. Valves would snap off and transmissions would sieze. Toyota withdrew from the U.S. market in 1959 and wouldn't return until 1961.

brightness04

My wife's grandparents were GM production line workers. They got laid off in the late 70's when GM scaled back manufacturing here in New England. Somehow they did not end up becoming McD workers at all. They became part of the labor pool that propelled DEC into pre-eminence in small computer workstations. What was DEC? you asked? Well, they subsequently went out business too, and their worker now work for Compaq (now HP), and other technology and biotech companies.

Did GM or people debate job issues back in the 1970's have a clue what Internet and Biotech companies were? And that these new jobs can make far more money than production line workers could ever dream of? My wife's grandparents had no clue what computers were, and still don't use computer or internet today! Yet a fast growing company like Digital Equipment Corp was able to find highly productive lines of work for them. Real jobs are created in the real market place by real entreprenuers, fortunately quite unlimited by the lack of imagination that we often all suffer; when one of us have a moment of epiphany and think up something new and interesting to do, that's when new jobs are created. Investors and job applicants alike evaluate our new ideas.

brightness04

I guess the next step is to hire illegal aliens to be in our military, run our company's, and hell while were at it we can hire them to run our country since they are willing to do jobs americans seem to not want to do

That's exactly what will happen if we keep people doing obsolete jobs and insist on paying them much more than what the market will bear. Bread and Circus inevitably suck in import labor to fill the gaps as the resident population go into non-productive endeavors thanks to the hand-outs. Some one has to do the real work to produce all that hand-out.

brightness04

Actually the fall of Roman Empire was very much the result of high tax, high tariffs (tariffs for moving goods around within the empire and from outside) and massive inflation. They all go hand-in-hand as the government grows into a Bread-and-Circus cradle-to-grave nanny state. Eventually the currency was reduced to less than 1% precious metal in the coin and the Roman tax collectors refused to take the coins minted by the government itself. The whole economy went into barter, and earstwhile free Roman citizens sold themselves to large estates in order to escape the tax collector.

cooterbfd

I did a little research to bolster my claims that unions had nothing to do w/ the death of independant automakers and high gold prices:

Yes, the law is still "on the books" granting the government the right to recall privately owned gold. Let’s take a look at the background.

It was in April, 1933 and in his first "official" act in office; President Roosevelt declared a banking "holiday" and issued the order to confiscate gold:

Executive order: By virtue of the
authority vested in me by Section 5(B) of
The Act of Oct. 6,
1917, as amended by section 2 of
the Act of March 9, 1933, in which
Congress declared that
a serious emergency exists, I as
President, do declare that the national
emergency still exists;
That the continued private hoarding
of gold and silver by subjects of the United
States poses a
grave threat to the peace, equal
justice, and well-being of the United
States; and that appropriate
measures must be taken immediately
to protect the interests of our people.

"Therefore, pursuant to the above
authority, I herby proclaim that such gold
and silver holdings
are prohibited, and that all such
coin, bullion or other possessions of gold
and silver be tendered within fourteen days
to agents of the Government of the United
States for compensation at the
official price, in the legal tender of
the Government. All safe deposit boxes in
banks or financial
institutions have been sealed,
pending action in the due course of the
law. All sales or purchases
or movements of such gold and
silver within the borders of the United
States and its territories,
and all foreign exchange
transactions or movements of such metals
across the border are herby prohibited.

"Your possession of these
proscribed metals and/or your maintenance
of a safe-deposit box to
store them is known to the
Government from bank and insurance
records. Therefore, be advised
that your vault box must remain
sealed, and may only be opened in the
presence of an agent of
The Internal Revenue Service.

"By lawful Order given this day,
the President of the United States."

In this act of theft, the citizens of the United States of America were compensated at the "official" price of $20.67 an ounce. That was the "official" price of gold for 97 years. Following the confiscation, the dollar was devalued by 40% - and the price of gold was revalued upwards to $35 an ounce.

Under the authority of the Emergency Banking Relief Act, President Roosevelt issued Executive Order No. 6102 which allowed the Government to confiscate all privately owned gold in the United States. The owners would be repaid in paper dollars whether they like it or not.

Next, on the death of an independant (Packard, by Menno Duerkson, in 1970):
He says, Packard did not die, it was murdered. How could a company that was financially healthy in 1953 need the assistance of another company by 1954?
1) Millions of dollars in lost profits due to post war steel shortage (hoarded by the big 3, not UNIONS)
2) Controversial styling (we don't design 'em, just build 'em)
3)Studebaker merger that drained profits from Packard
4)Unexpected mechanical and engineering bugs (where have we heard that before?)
Do we need tarrifs? Probably not. Will GM and Ford survive? Probably so. But it will take likeable styling and reliability to get people to pay more for their cars, and build profits, which will prop up stock prices. Legacy costs come from a completely different ledger sheet than payroll. If they manage their company right, they will be alright.

lemonhater

“That's exactly what will happen if we keep people doing obsolete jobs and insist on paying them much more than what the market will bear.”

Actually my mom had to do the same thing as she became a nurse. She wasn’t an assembly line worker, but my family owned a small auto parts store in the 70ies. The store’s market were the back yard mechanics. Those people who fixed cars up in their spare time rather than take them to a mechanic.

By the 80ies the market had begun to dry up. A car of the 80ies with it’s greatly increased electronics does not take well to unskilled hands mucking about the engine. More and more people began to take their cars to skilled mechanics leaving few and fewer customers for the store.

To be honest a small auto parts store in a major city these days is not likely to be doing very well unless thy have a good relationship with a garage. And the large auto parts stores would have killed us both on selection and price.

To be blunt increases in the efficiencies of both automation and transportation mean that fewer and fewer items must be manufactured here and thoose items manufactured here will need fewer and fewer people. I think many of those GM workers will eventually be better of than if they stayed with GM. True there are going to be some hard cases, but it is not good for a company, a country, or an economy to keep people making products that are not needed.

Now I resent the handout part becuase if it were not for a goverment handout to help pay for the tution she could not have become a nurse. I think that the role of government shouldn't be to prop up the big 3 unless there is a really compelling reason(and I can't think of any). And I think the government should help thoose workers find jobs that are more useful.

brightness04

hey, that bit of research borders on blatant plagiarism :-) We don't need you to tell us FDR was the one who wrote the executive order that confisticated gold. Who were the political base that elected FDR? The Labor Union. Why was "bank holiday" necessary? (in case you did not know what "bank holiday" means, it's the sort of thing that just happened in Argentina a few years ago: the rich got their money out a few days ahead of time, the rest see their money locked up unavailable for withdrawal; the really ticked off burn tires in the street). It's not a holiday regardless how much lipstick FDR and his banking cronies put on that pig. Because the collapse of the credit bubble created by the inflationary Federal Reserve. Why was the credit bubble, and Rederal Reserve for that matter, created? As a way to create constantly inflating currency because the Labor Union does not understand purchase power parity when nominal price for both goods and labor go down during a non-inflationary economic expansion.

Under the authority of the Emergency Banking Relief Act, President Roosevelt issued Executive Order No. 6102 which allowed the Government to confiscate all privately owned gold in the United States. The owners would be repaid in paper dollars whether they like it or not.

The act was passed with FDR threatening to pack the Supereme Court. Once again, what gave FDR that kind power? The same kind of mindless mass movement ignorance that put someone even more virulent in the middle of Europe that same year, by the German labor movement.

How could a company that was financially healthy in 1953 need the assistance of another company by 1954?

Who said Packard was a financially healthy company in 1953? Labor Union became a big part of domestic auto industry since the early 1930's. By early 1950's, GM already wield the price-setting power in the industry.

brightness04

I'm sure the proliferation of cars put a lot of neighborhood grocery stores out of busienss. Milkman used to be a real line of work. How many milkman did we see last week? Having someone dedicated to delivering milk is no longer necessary, and due to the improved transportation technology, people can not only get milk but also meats, fruits and seafood fresh even if they live a long distance from where the food is produced. That's rising standard of living in very concrete terms.

IMHO, the best way that government can help workers find jobs is by cutting taxes, so that people will be more eager to start new businesses and expand existing ones, hiring more people in the process. Simplifying employment laws would go a long way to encourage employment. If we insist on making tax laws complicated :-), then perhaps a tax exemption for training and education programs, especially employer-paid ones 'cuz we know if the employer is willing to pay for it chances are that it really helps the jobs.

brightness04

My point, exactly. Unlike electrical appliances, car purchases need just a wee bit more trust before the consuemr is willing to open their wallets. That's where the American brands will be valuable if GM and Ford play their cards right in the next few years.

harrychezt

but last I heard, there is a 2.5% tariff on imported cars, and 25% on body-on-frame suv's and trucks?

Maybe Chrysler will pay 2.5% for importing the Chery built Hornet to the USA in 2 years?
take care/not offense.

pch101

The US already has tariffs on vehicles -- 2.5% on cars and SUV's, 25% on trucks.

Obviously, the 25% has been a big help to the Big 3 over the short run. But I would argue that such protections have, over the long run, been harmful to Detroit because it has allowed them to spend years with their fortunes tied strictly with trucks, when they should have been investing those profits into making better cars. Now they're caught between a rock (high oil prices) and a hard place (an uncompetitive lineup of vehicles), with the only place to go being down.

The irony: Japan has no tariffs. Japan does have other restrictions that make importation that difficult, but tariffs are not among them.

rockylee

The irony: Japan has no tariffs. Japan does have other restrictions that make importation that difficult, but tariffs are not among them.

I don't know if that's (no tariffs) true socala, but from my understanding Japan has had tariffs and other obstacles in place to protect their domestic business for years. I don't fillow Japans economic strategy so if they have made changes I haven't heard. Obviously the 25% tariff on SUV's and Trucks has paid off for the domestics because it does make up some ground on the 30-40% currency manipulation advantage the Japanese have on us. So perhaps my Tariff idea isn't such a bad one after all as you all know it does work !!!!

We need one for cars and the Big 3's problems will be solved.

Rocky

m1miata

Oh heavens no! No tariffs on cars. Trade wars will lead to massive inflation. Those retired would have to go to the streets to sell apples, or perhaps barter apples for other goods.

Japan customers are not in need of American cars. Totally different market - different cars for Japan. GM will do well selling Buicks in China.

Each country adjusts its currency. I would worry more about the US Federal Reserver notes, or dollar, or is that promissory paper (cloth) being worth anything at all some day, more than what Japan is doing at the moment. The latest spending by the US government I am sure has not helped matters. Oh well, it keep the economy in motion, and hope the day of reckoning is not too near.
-Loren

brightness04

Exactly, the momentum did not pick up for Japanese carmakers till the mid-60's. By late 60's and early 70's, they became big enough to have industrial "legacy cost" 40 years later (really the echo boom of slackers). According to Toyota's own website, they made their 1 millionth car in 1952; the millionth export did not take place until 1959. By contrast, Ford made its 15 millionth Model-T in 1927!

rockylee

Japan customers are not in need of American cars. Totally different market - different cars for Japan.

I don't think its good business ethics for them to make it next to impossible for us to sell cars over there while we do everything to accomodate them over here. Hows that old saying go "If it's good for the goose, it's good for the gander" ?

Rocky

fintail

I still want to know which NA market cars would have any appeal to the Japanese consumer as anything but a curiosity? Most stuff we buy is either too fat or too shoddy to have any chance there.