Re: US rules

[richard bies <bies@domain.elided>]

Sorry, I was too pre-occupied with the steel industry going down the drain
to have chapter and verse on exactly which protectionist measures
phased-in exactly when.  As of the late sixties, import of cars was
still relatively free.  The asininity of the American public's
choices first hit the fan in the early seventies, followed shortly by
massive imports of efficient cars. (The forte' of Detroit for decades has
not been the building of particularly good cars -- rather in determining
what the US public would buy.  OPEC caught them and it took several years
to re-tool -- by now the public is back to dinos, in the form of SUV's
this time.)   The requirement on Japan to import tons of un-salable US
junk would have been laid-on after that, but before they decided to try to
manufacture here -- present barriers would have been pretty much in  place
by '90.  Of course, the reason the poor quality of US made parts seems to
have been made biting was a little matter of "Domestic Content"
requirements.  Neither was I reading automotive industry literature -- the
labor problems were covered by a Labor-favoring local media.  It seems to
be a local Labor Badge of Honor to drive the company under, rather than
adjust wages closer to what others are willing to work for.  Not only the
steel industry is gone (last blast-furnace in an area which had once
produced the lion's share of steel, world-wide, came down a few weeks ago)
- -- virtually all labor intensive basic manufacture is gone, including
Nabisco, the Clark Bar, Westinghouse, Gulf Oil, North American Rockwell, a
lot of Heinz production and countless small founderies and the like.

That "everyone who was willing to buy one had already bought" is the stock
company excuse.  Ordinarily when sales become weak, that's the time to
<lower> prices, not raise them.  Did competent research really indicate
that US enthusiasts wanted <more> gizmos?  Cup holders?  Was it the big
spenders, rather than the enthusiasts, who bought early?  (By the time
Fiat took-over and dropped the distinctive diDion [a breakable
differential is not a worthy distinction] it may have already been too
late.  The last Alfa may have already been built.)

So New Stanton ended-up with the Rabbit.  VW didn't get quite as much
mileage out of an old design as Alfa did.  Yet if New Stanton were a good
facility, they'd have been exporting (if the product were of quality,
even to Germany) -- and re-tooling if necessary.  VW put their investment
elsewhere.  (Hmmm -- built as a Chrysler assembly plant -- they decided
they couldn't make cars profitably there years before the already built
plant was sold to VW, and they in turn discovered the validity of
Chrysler's assessment.)

My impression is that DeLorean had his labor costs in line in Ireland (for
heaven's sake; that's why the facility was there), but needed loans or
line-of-credit to continue production (had to buy engines from Pugeot, for
instance), which he did not get.

To the extent markets are free, yes, labor costs will <tend> to equalize
(already to fair extent in Europe, amid caterwahling) -- but yet subject
to investment costs/capital gains taxes.  A given price-point can be
reached through low wages for a relatively large number, with minimal
investment, or higher investment in productive machinery and smaller
numbers at higher wages -- how far this can go depends upon the investment
climate.  It is the <total> cost of production which will equalize.
("Productivity" figures tend to be in hours, rather than in dollars.  Thus
a company which has supplanted workers with sophisticated machinery will
make the ramaining workers look very "productive", though their wages may
be high, and the actual gain is in the machinery, not the workers.)

r.m.bies

------------------------------