Re: alfa-digest V7 #936

[MAXLTV@domain.elided]

In a message dated 8/4/99 12:18:15 EST, owner-alfa-digest@domain.elided writes:

<<  I think one will note that as imports became a threat
 to the big three and the UAW, hampering measures went into place.  Still
 the imports penetrated -- but they in turn fell under the thrall of the
 UAW, as aided by protectionist legislation 

We're getting off topic here, but I would like you to cite evidence of 
"hampering legislation." Union membership in domestic plants has nothing to 
do with trade policy, as evidenced by the Mercedes plant in Alabama which 
builds the 430 SUVs. The UAW is trying to get into the plant, but wage 
differentials between union and non union plants have practically evaporated. 
There was a long article about this in the New York Times about a month ago.  
 

<<why it did not work for VW to
 build cars down the road in New Stanton, PA -- traditional parts supliers
 to Detroit could not meet even minimal quality requirements, and
 non-productive union workers could not build a competitive car.)(Honda
 seems to have been able to exctract sufficient productivity.)>>

The VW plant closed chiefly because of an aging product-the Rabbit. This 
canard about lack of union productivity is bogus. Care to guess what the 
labor environment is like in VW's native Germany? A lot more oppressive to 
management than the U.S.  BMW, Mazda, Mercedes, Toyota and others have 
manufactured here for years, with equal or even better quality than their 
native counterparts.   
 


<<  Did it again with the
 164 -- at introduction, a base model was about 20K -- by the time they
 withdrew, gizmos abounded and the minimum price was 30K or over -- of
 course they were not selling.)

I have my original price sticker on my 1992 164L-priced at $36,000. The base 
model 164, with it's cloth interior and hubcaps, didn't sell well, so it was 
withdrawn. Most European manufacturers usually ship their most luxurious 
versions here, because that is what people here want.  
 
<< As in all things, it is necessary to distinguish the rhetoric -- US
 industry is big on free market rhetoric -- except for "unfair" competition
 - -- "unfair" competition is competition beyond what can be countered by
 Marketing, and may actually require reduction in the cost of manufacture.>>

There was an interesting article in Car and Driver years ago about the labor 
disadvantage the U.S. had in manufacturing. "In time," the author wrote, "all 
the industrialized nations will have rough labor cost parity." He was right. 
The author was John Z. DeLorean, then head of the Pontiac Motor Division of 
General Motors. Today, no nation really has a large labor cost advantage, and 
certainly Europe and Japan do not.  In the third world, undoubtedly so, but 
these plants are used chiefly for parts assembly. If this were the case, the 
foreign manufacturers would not be such a presence here. Companies do not 
locate production to areas with high labor costs.  Take it from someone who 
spent 20 years in the apparel business.  
 

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