Quote:
Originally Posted by Equivalence
I'm not a businessman, car designer, or economist, so I could be way off on this. However, from what I understand, the unadaptive aspect came from the design of American cars. As far as I know, unions were not the ones who designed the cars, they merely built them. It was the availability of cheaper-by-design Asian cars that brought down the American car companies, and not the autoworker's union.
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Ok Equivalnce, lets think about this for a moment. Inferior products usually cost less money than higher quality products. Indeed, you get what you pay for. When a company sells a lower quality problem they can command, or ask such a lower price than the higher quality product. So to be able to sell something they lower the price. To lower the price the company has to lower costs. Since the American cars quality was lower, or perceived to be lower, the markets did not think that American cars were worth their asking price. Now if the car companies lower their prices then demand increases. Now look at the situation of the American car companies, their costs include electric bill, automotive supplies and labor costs. The average wage labor totality for the American Unionized worker came out to about $75 an hour. The foreign car company's cost was about $40-45 an hour. That is a massive difference in cost for the different companies. The reason of the difference is the unions demanding the higher wage. These wages became what are known as sticky prices or sticky wage. Thus this high labor cost tied the hands of the American car companies to lower the price of their cars because they still had to cover costs. The breakdown of cost of a Car is mostly supplies and labor, design is a much smaller percentage of cost.
Saya, there were way too many assumptions and a lack of coherent thought for me to even see what the point of your post was.