Mitt Romney wrote in yesterday's NYT about the $2k extra labor cost. But why
the US automakers cannot compete in the cars which they build offshore with
equivalent Japanese cars built on-shore? 

Should $2k make much difference anyhow when people on the street are sold on
monthly payment and not on the price of the vehicle?

American automakers have the advantage that many Americans buy American-made
otherwise their sales could be even lower.

Someone on NPR was saying that Japanese have much less number of dealers so
they can weather ups and downs better.

25 billion can buy 1 million $25k autos and 2 million $12k autos. Any number
in between the two should cover all employees of IPC members companies and
their friends. Only thing we need is a private jet for the TechNet webmaster
to go to DC and lobby. 

-----Original Message-----
From: TechNet [mailto:[log in to unmask]] On Behalf Of Pete Houwen
Sent: Friday, November 21, 2008 12:03 PM
To: [log in to unmask]
Subject: Re: [TN] A Modern Parable

It goes beyond the UAW for sure, but an interesting number:

Hourly North American labor cost, GM: $81
Hourly North American labor cost, Toyota: $35

There's about $2K extra in every GM (Ford, Chrysler) car for labor.  All
else 
being equal, consumers will spend $2K less.  So, Detroit needs to cut
corners, 
and still sell small cars at a loss just to compete, meaining they need to
sell 
more high margin SUVs (still at that disadvantage with more cut corners) to 
make up for it.  So some of those poor decisions and lowered quality are 
effectively a matter of unmanageable labor costs.  

And considering you can't incentivize the workers by firing the bad ones and

promoting the good ones, all you have are inspirational posters.

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