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Re: [Shop-talk] (no subject)

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Subject: Re: [Shop-talk] (no subject)
From: John Miller <jem@milleredp.com>
Date: Thu, 03 Jul 2008 10:26:09 -0700
> I've spent some time with the importers down on the shipping piers because 
> of my job.  several of Pacific rim companies are making money hand over fist 
> with their cheap cars because it costs them less than $2,000 per car to make 
> it and drop it off here in the US.  Ford can't even come close when making a 
> car here in the US with US labor.

Uh, which cheap cars are you talking about?

It costs Toyota and Honda more to make a car in Japan than in the US, 
especially after shipping is factored in.  The high-volume models (or 
what were the high-volume models until the game shifted over the past 
year) are all made in the US.  The Yaris, Prius, etc. were always 
boutique models that Toyota never figured would sell here in high enough 
volume to justify US production.

But - and here's the difference - Toyota brought them in to make sure 
there were plenty of different models in the showroom, whereas Ford was 
content to leave big, big gaps in their product line.  And the market 
changes, and suddenly they've got product to sell and Ford doesn't. 
What makes the Yaris, Prius, etc. so profitable right now isn't that 
they're cheap to build, it's that they're flying out of the showrooms at 
full price.

There's nothing sold in the US and licensed as a normal road vehicle 
that costs less than $2000 to make.  The Koreans may have a modest cost 
advantage over non-union US production, but it's nothing like that big, 
and even a lot of Hyundai production has moved Stateside.

I'd gather the Chevy Aveo is probably the cheapest model out there, but 
it's still NOWHERE like $2000 a unit; it's always cute to go outside the 
US where 'Chevrolet' is GM's sub-Opel nameplate and they've got a full 
line of Korean imports under the Chevrolet brand in the Chevrolet/Opel 
showrooms.

Ford's got a lot of problems, some relate to their bending over for the 
UAW as far back as the early '70s, some relate to their taking the HUGE 
piles of cash they raked in in the '80s and BLOWING it rather than 
investing it back in their business.  Yes, there's cost disincentives to 
manufacturing in the US, which is part of why Ford's future US plans 
seemed to involve them becoming a Mexican automaker with as little US 
presence as they could manage.

We know about Nasser, but it'd be interesting to look more closely at 
Nick Scheele's term at Ford, he presided over all the disastrous 
decisions at Jaguar but managed to get moved upstairs before their 
effects came home to roost.

John.
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