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High Wages Means Large Cars
Posted by Jim (more from Jim) on Sat, 30 May 2009 15:23:01
In Reply to: It wasn't the workers or the unions who've made, No Snaab, Sat, 30 May 2009 14:12:13
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Small cars do not scale down in part count at the same rate car size. e.g. an $18000 car has far more than half the number of parts than a $36000 SUV. Part number count correlates to labor cost, because the labor cost for attaching a part (like a door) on an SUV is about the same as the labor cost for attaching the corresponding part on a smaller car.
That's why high labor cost producers can only make large vehicles and expensive vehicles profitably, if sales volume is to be maintained. Domestic makers' penchant for making large cars is to a large degree the result of high labor cost. That's the only kind of car that they can make profitably. They are also victims of the FED's monetary policies: the same easy money phase in the economic cycles that allow people to buy large and expensive cars also drive up commodity prices (including oil) shortly afterwards.
posted by 76.118.39...
Posts in this Thread:
- GM bankruptcy = "depression"?, rob 94 aero, Fri, 29 May 2009 17:23:22
- GM no longer employes enough people to have this effect, MI-Roger , Sat, 30 May 2009 13:33:39
- The unions bankrupted GM..., Mike Lynch , Sat, 30 May 2009 13:30:09
- hmm it really wasn't just the Unions, ryan , Sun, 31 May 2009 15:19:24
- The unions bankrupted GM... with management help, Noel, Sun, 31 May 2009 06:36:26
- Yep, Jim, Mon, 1 Jun 2009 11:30:03
- Re: The unions bankrupt many places they dominate., BobS, Sat, 30 May 2009 23:01:20
- Re: The unions bankrupted GM..., KevinM, Sat, 30 May 2009 19:03:38
- Re: The unions bankrupted GM..., mikef, Sat, 30 May 2009 18:02:42
- do what? (i do not intend this as a flame), repoSAAB, Sat, 30 May 2009 14:42:12
- It wasn't the workers or the unions who've made, No Snaab, Sat, 30 May 2009 14:12:13
- Graph of Unemployment by County - USDA Stats, andym, Sat, 30 May 2009 04:11:08
- You ought to live in Michigan, TG, Sat, 30 May 2009 03:35:03
- Actually, "throwing in the towel", is, for all intents, Lawrence, Fri, 29 May 2009 18:53:11
- Huh?, PGAero , Sat, 30 May 2009 12:36:45
- Re: GM bankruptcy = "depression"?, Simon S, Fri, 29 May 2009 18:04:19
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