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Why we can't compete in the world.

11/18/2008 10:53 AM

As I was pondering the financial and technical woes of the world, I started to think that our problems were somewhat caused by the differences in the two systems of measurement, namely Imperial and Metric. Was the stubborn adherence to one system over the other the reason for high costs in manufacturing? Goods made in America are not as popular overseas as are goods made in metric subscribed countries. Would American made cars be more popular in China if they were metric? Instead, we see all the vehicles sold throughout the Asian countries originate in Japan and now Korea. Japanese car makers have established themselves in every country and could possibly take over from the big three here at home.

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#1

Re: Why we can't compete in the world.

11/18/2008 11:25 AM

My take is it is not so much about metric/imperial as it is about greed. the way I see it is in America everyone wants more - the CEO wants more money, which in turn the managers want more money, then the workers want more too - this drives up the cost of the products; with that the purchasing power of the the workers' dollar goes down, so they wnat more money ................ a viscous cycle.

With globalization to reduce manufacturing costs (which I see as a short-term solution because these poor/overworked/abused workers will eventually fight back to earn what they deserve), and companies utilizing this, for now, cheap labour they have pushed the american products out of the market place.

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#2

Re: Why we can't compete in the world.

11/18/2008 1:33 PM

The Imperial / Metric issue only a small part of it. For the American auto industry specifically, two of the biggest reasons are.

1) Not monitoring market conditions. This is not rocket science people! If oil prices go up, don't try and flood the market with SUV's and gas-guzzling pickups and expect people to buy them.

2) American cars are NOT well designed for the conditions of other countries. Design issues in question (which American cars suffer from one or more of) - Leaf-spring suspension systems (lousy ride and performance on twisty and bumpy roads), large turning radius (parking, maneuvering issues), poor gas millage (large heavy vehicle, poor power to weight ratio), large physical size (parking, price, gas mileage issues), etc. If someone had a choice between an American car designed for American conditions and a car designed for their local conditions, why would they buy the American car.

I am ignoring purchase price, reliability, access to spare parts, vehicle conversion to right-hand drive, etc.

As a side note I was in Chicago a month ago for two weeks. About half the cars I saw there were NOT American at all but a mixture of European and Asian models. That is the BIGGEST indicator of all! If they cannot compete in their own market against foreign imports (which also require the consumer to cover the expense of importing and left-hand drive conversion, etc), well you can see where I am going.

Give the people a choice and they will buy what they want.

Japanese car makers have established themselves in every country and could possibly take over from the big three here at home.

From what I hear, the big 3 (and a couple of others) are in serious danger of going under altogether (effecting millions of American jobs). If the government doesn't bail them out, I doubt the competition will. I put the blame squarely on incompetent and short-sited management.

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#5
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Re: Why we can't compete in the world.

11/18/2008 7:30 PM

I agree with everything you said. You just confirmed what I thought all along. I think if the government bails out the big 3, it is a big mistake. A lot of people will lose their jobs which is unfortunate, but bailing out the car companies will not save any jobs, except for a few executives. As you say over there, "it's a sticky wicket".

On a related subject, I personally think the American auto worker makes too much money. Auto workers are among the highest paid workers in the U.S., about 20 to 25+$ an hour plus benefits, just for working an assembly line. That's more than college grads get and they have to invest a lot for their career. The unions are responsible for that. How can you compare an assembly line worker to a skilled craftsman like a carpenter or electrician.

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#6
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Re: Why we can't compete in the world.

11/18/2008 8:28 PM

'I personally think the American auto worker makes too much money.'

You can think whatever you want. However, the UAW bargained their contracts in good faith. At the time of these negotiations, the the auto makers were making record profits. Do you have a problem with the working man sharing in the profit of their employer?

It's upper management that screwed up here, but it's the working man that's going to take the biggest hit. Yup, the executives that drove these company's into the ground will still have their huge salaries and a nice bonus.

The conditions of any bailout should be the removal of the people that caused it in the first place, and it's not the guy on the assembly line.

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#3

Re: Why we can't compete in the world.

11/18/2008 2:23 PM

The system of measure has little to do with it. Labor cost allow other companies to put more technical advances in to their vehicles at lower price to the consumer.

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#4
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Re: Why we can't compete in the world.

11/18/2008 5:50 PM

In some cases, Korea, for example, that is certainly true. However, Japan has a labor rate equal to, or slightly higher than depending on how you're measuring, the US. So, why can't GM compete with Toyota?

I don't think it's just the metric issue, although that's an indication of the US not being willing to go to the customer, especially in terms of multilanguage labels and CE certification.

There are questions about the strength of the dollar, though this crisis should fix that.

And, our costs include the burden of employer provided health care and pensions, while many competitors provide for that at a government level via taxation. If we had no trade agreements, that wouldn't matter, but we do, and it does.

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#7

Re: Why we can't compete in the world.

11/19/2008 7:53 AM

I agree with you, it is high time that a single system was used. The Imperial units were invented in the UK but for the most part they have switched over to metric. I remember that when I was at school there, we dealt in feet and furlongs and miles, inches etc., quite complicated. The decimal metric system is much easier and so if adopted in the US should result in an increase in efficiency as well as portability.

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#8

Re: Why we can't compete in the world.

11/19/2008 7:29 PM

I believe the reason we can't compete with the rest of the world, is that the American Industry is plagued with numerous false economies. One of these false economies is the elimination of product testing. One example of this, we have a coffee pot at work that no matter how careful you are at pouring it makes a mess on the table top because of poor spout design. I personally cannot imagine any company would knowingly sell such an inferior product to its customers and expect them for repeat business. Based on this experience alone, I would never buy any of their products, coffee pots, power tools, etc.

I believe that too much credence is put into computer analysis in product design at the elimination of product testing. We test to discover things we do not know; however, a computer analysis is only based on what we do know. Thus, it is the customer that discovers what we didn't know.

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#9
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Re: Why we can't compete in the world.

11/19/2008 8:23 PM

What, pick it up and look at the bottom, and see where it was made. It may have an American name, but it was made oversea's. You get what you pay for.

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#10

Re: Why we can't compete in the world.

11/20/2008 4:34 PM

Actually we do compete in the world. You all talk about Japanese and european cars here, but many of those are now build here. Why? Because its cheaper to build the cars in this country. Honda, toyota, Nissan, BMW, etc. all have built manufacturing facilities here in the US. Others such as Volkswagon are in the process of doing so... and theses are just the big noticable car companies. Other companies such as parts suppliers have also built manufacturing here as well. Its not a matter of Americans not being able to compete, its more a matter of having a poor business model for the big three, and poor accounting in the financial sector.

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