Quote:
Originally Posted by Leonidas
Because making fuel efficient vehicles is such a bad thing for US dependence on imported oil  |
What does that have to do with equalizing fair trade?
The main reasons the asian companies can do these cars in the US so "easy" is because of:
Government subsidies
Currency manipulation
non-UAW labor
More low-cost imported parts from China, etc
Closed Japanese market
In Japan (the #2 car market in the world) those small cars have been running around for decades because nobody else is allowed in there. All they had to do is update the cars for the US and ship them out. It doesn't take as much investment to convert a car from Japan to the US like it does for the Euro cars to the US. (Japan is more US-like with their crash standards, etc.)
One of the domestic OEM's, who shall remain nameless, has tried for YEARS to get a small car program approved by the Board. That program is now slated to begin production in 2010 and it is still a money loser overall. (Only reason it got approved was because of the new CAFE laws expected to take place.) If Japan was an open market, then the domestics would have a better chance to make profitable small cars because they can spread out the fixed cost allocation as well as get economies of scale on parts purchases.
If there was true free trade between the countries the domestics would have had small cars running around a long time ago. It's not like they haven't tried - they just could never get a small program to make any money or come close to break-even. No board of directors is going to approve a program that costs $1.5 BILLION and then loses $1,000 on every car made on top of that.
Now, with the new UAW agreements, reduction in retiree health care/pensions, lower material costs because of constant pushes on the supply base, the small car programs are becoming closer to break-even for the domestics.