They are pushing production and engineering to anywhere not the USA, so this trend of having fewer workers isn't going to stop until all that's left of GM is the headquarters. I'm not Chicken-Littling either. This trend has been many decades in the making, and it only has one logical endpoint.
I was looking at their trucks, and left the showroom when I saw one that had 45% domestic content. I bought a truck that had the most USA content...a Honda Ridgeline.
When Henry Ford built cars, he knew that the people making his cars were also buying his cars. That mantra was thrown out in the 80s. The new mantra was "make sure the people making the stuff are poorer than the people buying the stuff, and you [shareholders and executives] can pocket the extra profit margin."
The flaw in this theory is obvious: Eventually you run out of poor people willing to build things they themselves cannot afford to buy, and since the buyers of your stuff no longer have jobs, they're no longer buyers either.
And that's where we are today. It sucks, but a lot of wealthy people made a lot of money on the float while it lasted.
Were that the case, we'd see a prevalence of people unable to afford cars. This is not the case. The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day. And this isn't considering the fact that a modern car is far safer, more comfortable, more fuel efficient, and just broadly way better than a model T.
American workers are too highly paid to make many manufacturing jobs viable in the US. If GM et al. were to pay American workers more they would either not be making enough money to stay afloat, or the cost of their cars would rise considerably (and likely lose sales and not be profitable anyway).
So, let's compare the automotive industry then. I might be mistaken, but I'll try my best. And yes - I totally ignore taxes, healthcare, and anything else - which might be important, so... take it with a grain of salt.
In the year 1916, Henry Ford lowered the price of the Model T to 345 USD[1]. Using an inflation calculator[2], this tranlates to roughly 8120 US-$. At the same time, Ford raised the salary to 5 US-$ per day[1]. That makes 160 US-$ per Month (calculating with 4 x 5 days). Using the same calculator as in[2], we end up with a value of 3766 US-$. So a Model T costs 2.5 months of labour for an average worker.
Fast forward 2019 - the avarage salary is maybe 40k US-$ a year for an automotive worker?[3] So, using the same reference as above, this would translate to 166 US-$ per day, and 3320 US-$ per month.
Now, what's the successor of the Model T nowadays? I don't know - so I followed the "successor" links in the Model T wiki article[4], and ended up at the Ford Fusion. Ford says, it's starting at 23.170 US-$[5]. That's 7 months worth of labour for an average worker. So, yes - compared to 1916, it's 2.5 times more expensive.
Appreciative of the breakdown, but I think there might be some issues with your methodology.
For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing.
Also, your salary resource is a little weak. It has a huge range ($34k-$144k average). I speculate this isn't relegated to just using automotive manufacturers but also includes their suppliers. Anecdotal experience shows me that the lowest paid Tier 2 union employees on a line make that much if you include overtime. Tier 1 workers make much more (close to double, in my experience). Then you take the skilled trades (e.g., electricians and machinists) where its more common than not to make six figures, all things considered. This is all before we're getting to the degreed engineers. Payscale.com shows average Ford engineer salary nearing $90k. Engineers on the line generally make more because of the work conditions and overtime (it wouldn't be uncommon for a process engineer to make double that). I don't know what the actual numbers are, but I wouldn't balk at data that's easily double the numbers you covered. It could easily be on-par or even below the Model-T numbers when it comes to monthly household income.
When Henry Ford set minimum salaries, he wasn't impacting the wages of the engineers who designed the cars - he was impacting the wages of those who made less than $5 at the time the change was made. A minimum wage was being set, not an 'average' wage. So comparing a $5 minimum wage to the 'average wage today including white collar workers like line engineers' fails to be a convincing comparison. It's even less convincing now that I realize, after reviewing your comment, that you're including overtime wages for "Tier 2 union employees" when MrGilbert's data specifically doesn't include overtime wages. If you need to work overtime today to have the same relative affordability as that available a century ago - that's not progress!
Yes, yes - perhaps the autoworkers we are talking about are not 'average' and own fewer cars per household. And yes, yes - moving the minimum wage probably resulted in wage increases for higher paid workers as well. If you want to move the goalposts again do some legwork and show some work, otherwise you're just promoting a paper-thin narrative on the basis of "but what if".
I think the 'more than one car per household' is a fair point but I think it gets watered down by the >1 car per driving adult...this may be just that we consume more, not need more. If that's the case, it implies vehicles are more accessible today, not less.
But I stand by the assertion that claiming a $40k average wage is way off. The base salary of most Tier 1 non-skilled employees was still in the $70k-$80k range, and this was years ago. The skilled trades made much more. This is without overtime. It seems like MrGilbert was cherry picking the data. And I hope you also realize that there is a difference between the manufacturing engineers and design engineers. Manufacturing engineers probably should be included in my opinion, and they are some of the highest paid, but I'd even be willing to concede that and still stand by the general point.
I included overtime because it is a such a large part of the manufacturing experience. And yes, some people game overtime as a way to inflate their wages. And the overtime pay increases didn't come about until the Fair Labor Standards Act. If you look at the history, the $5 per day wage actually does include overtime (if you define overtime by today's standards). We could debate whether or not this is progress (many of those I personally knew would call it progress because they wouldn't have the opportunity to make that wage elsewhere, which is why there is little turnover even today). I actually don't think it's unfair to include overtime to get the total compensation comparison, but even without overtime the $40k number seems pretty far off.
The larger point being, it's not as simple of a comparison as 'don't include overtime' and select the lower end of the overall automotive salaries (including lower paid suppliers). We can further complicate things by factoring in the preferred employee pricing etc. It's complicated, even if we want it to be a simple narrative.
The loss of manufacturing jobs is a big part of the reduction in size of the middle class United States, especially in the Rust Belt. This is largely due to automation reducing the number of available well-paying jobs not because the car companies are systematically mistreating workers. People still vie heavily for those jobs because they are some of the highest paying jobs available.
Introduction of the $5 daily wage also included a reduction in labor hours to 8 hours per day. So no, the $5 wage did not include overtime.
"To run the factory continuously instead of only eighteen hours a day, giving employment to several thousand more men by employing three shifts of eight hours each, instead of only two nine-hour shifts, as at present."
https://archive.nytimes.com/www.nytimes.com/learning/general...
Fair enough on the hours. But it's not wholly accurate to count the $5/day as a wage. About half of it was a 'bonus' if you met the "socialization" criteria like abstaining from drinking. They would literally perform home inspections. Men would have to give up the bonus if their wives worked. I think people look at this with some revisionist history; it wasn't as altruistic and I (personally) don't think it's an improvement over today.
Not to belabor the point, but it's not a simple one-to-one comparison like the OP was trying to demonstrate. I don't think the wages are nearly as bad as they made it out to be.
> It seems like MrGilbert was cherry picking the data.
I was not - I had to work with what I had, and I clearly stated at the beginning, that you have to take it with a grain of salt. However, I did not cherry pick any data. That‘s a false accusation.
Sorry, from my perspective it seemed like you took the lower end of that $34k-144k because it fit your point. At the very least, I would have thought the average would have been a fairer assumption. Chalk my mistake up to the limited information communicated in a forum format
Indeed it would be nice to see a more definite and representative source for income. I wonder, since the process is more complicated, you should now include both the line engineers and also the people working near minimum wage to make the parts for these cars. Did Ford make most of its own parts? How much was off the shelf, and were there industries that existed solely to make parts for these cars?
> For one, far fewer households today are single salary. Say what you will about whether this is a good or bad thing, but I think it's probably more appropriate to base the numbers on an "automotive household income" if that's such a thing.
How many households had two Model Ts, and how many households today have two cars?
>How many households had two Model Ts, and how many households today have two cars?
Like my response above, I think that's a valid and interesting point that should be factored in. I'd also be curious to see how much this plays into the overall debt load of consumers. I.e. does the necessity of dual-incomes force the need for multiple vehicles which in turn forces a higher debt load than previous generations? Where I come from, taking on vehicle debt is considered as much of a given as mortgage debt.
> Were that the case, we'd see a prevalence of people unable to afford cars.
Actually, I'd say that is precisely the case. The vast majority of cars in the US are bought on credit, which means people can't actually afford a car, they can only afford to borrow money to pay for a car for a few years, then get out of that one and move onto another one.
The massive, massive majority of vehicles are not owned by the person driving it, they're owned by banks.
The price of a model T in 1908 was $825 or $850 (google results vary). The median annual income was between $450 and $525 (again, sources vary). So a Model T cost 1.6 to 1.7 times the median income of a US worker. For a car that had no air conditioning, no radio, no airbags, and a top speed of 45 mph. Near the end of the production run (mid-late 20s) the cost of the model T had gone down by over half - thanks to production line manufacturing.
By comparison, the current US median income is just over $60k. You can buy many of these cars for less than half of that. Some less than a third: https://www.truecar.com/prices-new/kia/ Each of these cars is drastically safer, more comfortable, and with amenities like aircon radios and more.
Almost all the price-market comparisons from decades ago forget utility value of monetary and the shifting of disposable income for non-essential goods and services. Houses then cost the equivalent today of perhaps $80k as well. A better comparison may be around disposable income though which at the national average household income of about $70k to be a safe $15k, so cars should be about $20k. Except new car sale prices nowadays are about $30k and yet we know that most people making $70k for a family of four probably aren’t going around getting a new car.
Elizabeth Warren’s paper from a decade or two ago did a fair job doing some pricing comparisons of the day to turn of the century American household microeconomics and demonstrated the primary change in the past 100 years was the additional cost of a second bathroom.
And what was the disposable income in 1908 when the median us income was $500. If buying a $30k car is out of reach for a family making $70k a year, then I find it exceedingly hard to believe that a family making $500 in 1908 would be able to afford an $800 car.
Microeconomic comparisons are very easy to tweak to achieve a conclusion determined a priori. Some goods and services like electronics, air travel, communication, and transport become orders of magnitude cheaper over the course of the 20th century. Others like healthcare and housing on average get more expensive, especially in the latter half of the 20th century. If you want to show lowering costs of living, weight the model towards the former. If you want to show a higher cost of living, weight the model towards the latter.
I think the only American workers that are paid too highly for manufacturing jobs to thrive in the US are folks like this:
As Chairman and Chief Executive Officer at GENERAL MOTORS CO, Mary T. Barra made $21,870,450 in total compensation. Of this total $2,100,000 was received as a salary, $4,452,000 was received as a bonus, $3,425,006 was received in stock options, $11,081,760 was awarded as stock and $811,684 came from other types of compensation. This information is according to proxy statements filed for the 2018 fiscal year.
But Fiat doubled headcount, how was that possible if your argument that labour cost is the issue ? Let's not follow garden economics, greedy and laziness may be the root. BTW other auto companies are expanding except GM.
The real storm would be when next time they need bailout , would they be bailed out as US company?
> But Fiat doubled headcount ... BTW other auto companies are expanding except GM
GM's business is shrinking while most automakers have expanded in the last five years. It makes perfect sense that GM would contract their employee count as sales decline backwards by nearly two decades.
GM sales 2014: $155b | 2018: $147b
Their sales in 2005 were $193b by comparison. Automotive sales were $158b that same year.
> The cost of an automobile is an even smaller fraction of an average person's disposable income than it was during Henry Ford's day.
I seriously doubt that... at $50,000+ for a new pickup, and $35,000+ for a new car? And used vehicles are still quite expensive as well (unless you buy an absolute pile of junk).
Financing terms keep stretching longer to keep the appearance of an affordable monthly payment, but many Americans have become wary of the overall cost of a vehicle, which is by no means low today.
I think the SmartCar didn't sell in the US because the mileage was shockingly bad. You'd expect 100mpg for something that small and light. It didn't seem 'smart' to American buyers at all.
I should have made clear I was describing how all (or at least most) American industry threw out Henry Ford's mantra. Ford Inc might still be living Henry's values.
This is actually a myth (or clever PR) about Ford raising the wage to enable his employees to buy the product they were creating. There's been numerous reports that show the economics of that don't really make sense. The wage raise was actually to prevent turnover to improve productivity; it wasn't uncommon to have people walk off the assembly line mid-shift, shutting down production.
Just goes to show that the poor need their own power structure, Trump or Fascism (not saying Trump is fascism, just saying Fascism is another option which appealed to poor people in WWII) is not a replacement for that.
As someone in the market for a truck, why specifically USA and not somewhere else?
I'm always a bit bemused by this. We were urged to buy British in the late seventies and early eighties. My dad lapped it up and the reward for his loyalty was a string of really crap cars.
Well first a Tacoma is actually a truck; even Honda states the ridgeline is not intended to compete with traditional trucks, is not built for towing and uses a unibody construction.
Tacomas are expensive, the dealers don't deal and they hold their resale value. The new (2019) Tacoma trades heavily on it's reputation IMO, without really adding much new over the past 3-4 years. It's a real off-road vehicle though, if that's important to you.
In this format/size I'd suggest you take a look at the new Ranger. It's nothing fancy but much more affordable. It's pretty much the polar opposite of the Ridgeline.
I absolutely love my Tacoma. It's a 2009 4dr TRD Sport with 164,000 miles. I have no desire to 'upgrade' to something newer. My only regret is getting the short bed, I sleep in the back a few times a year and it'd be nice to not need to sleep in the diagonal.
The people I know who own the 3rd gen Tacomas seem to like them just as much as I like mine.
This is exactly opposite for me - I want a pickup that is "short bed, standard cab" - I want a small pickup - like the original Ranger/Mazda B3000.
Sadly, due to CAFE rules I can't get that any more.
Now - what I (and many others) lusted after was something Jeep showed off as a concept vehicle: It was a short-bed version of their new Gladiator pickup.
Probably the only way that I might - might - give up my TJ. Damn, that thing looked so sweet. But again, they probably couldn't build it because of CAFE rules. So if you want the Gladiator, you have to get the 4-door. I don't like 4-door vehicles, I have no need for one. I want a 2-door pickup, standard cab, short bed - nothing less.
Either that, or give me one of these - another vehicle I can't own:
I’ve got a 2000 4Runner that is still running great, but looking to switch to a truck in the next couple of years.
My thought, years ago, was to wait for the 4Runner to break down then upgrade, but I’m now starting to wonder if that’s still a few years (decades?!) off.
Wow I have the 2000 RAV4 and the same opinion.
5 years ago I started thinking of buying something new but the RAV4 keeps purring. 240,xxx miles and you would never know it.
I’m a fan of Ford trucks myself, drive a F150 for off-roading. Tacoma and Jeep Wrangler out here in CO are extremely popular and have great reputations. The build quality on Ford stuff is fine. I think the recommendation for Ranger is solid, but I am not sure if it is better. If you are really serious about off-roading full sized trucks are not ideal (too wide/long).
From what I can gather - and this is mere speculation on my part - the new Ranger is merely a version of the 1990s F150 dressed up.
Compare the size of an early 90s F150 with that of today's new Ranger, and you'll see what I mean (while you're at it, compare the sizes of an early 90s F250 with today's F150).
I honestly think (I have no proof) that what Ford did was kill off the Ranger (ie - stop rebadging them from Mazda), because of CAFE rule changes, but then they found that even the F150 was too small, too. So they moved the F250 down a notch (it became the 150), and maybe the 350 too (it became the 250). I'm not sure about higher numbers; most people never bought anything bigger than the 350, at least on the consumer end (I have seen some "consumer" 450s and 750s on the road - but they are very rare).
Then people clamor for the Ranger (have you ever tried to find an original Ford Ranger that is in normal condition, in good repair, and hasn't been "pre-runnered"? Not easy - and when you do, it ain't cheap, either - wish I never gave up my 94) - so they dig out the old F150 - which is smaller than today's F150, dress it up and tada: "new Ranger!"
Again - this is just my impression; I'm not sure of the truth or facts or anything.
I'll tell you where Ford also made a mistake: They announced a "mini-Raptor" - but afaik, it was only released in Australia (and I think it had a diesel engine option to boot!). Gah!
>I’m looking at the Toyota Tacoma as my number one choice, but this is not a strongly held desire if there is something better.
Something better for what?
A Dodge Dakota or an old Ranger (the ones not based on the global platform) are far superior if your goal is to overload the piss out of them without hurting the truck.
You'd probably enjoy your time in a new truck far more though.
This is a good question because all the manufacturers are totally integrated; It's really hard to determine "where a car is made" because of parts and sub-assembly.
That said, several of the car sites tally up the origin of the parts and assembly and calculate the percentage (likely on a value-added basis) to determine "domestic content":
Maybe I don't understand what this is measuring but wouldn't Teslas be close to all-American? They even make the battery cells in the same site as the rest of the car I think. They don't show up anywhere on that list.
> I bought a truck that had the most USA content...a Honda Ridgeline.
Hate to break it to you - but you didn't buy a truck. You bought something shaped like a truck. I personally don't know if I could trust it doing actual truck jobs, if I needed it for that. I don't know how well it would fare if I took it off-road on some of the trails I've been on that can easily break regular pickups and jeeps.
Just something about it being a unibody car-like construction that makes me cringe. Then again, I know there've been other pickups built like this in the past (I know that various manufacturers have experimented with this); plus, the Jeep Cherokee has (almost?) always been of a similar construction (not sure if unibody - but it doesn't have a ladder-frame chassis, but rather front and rear subframes) - and it's known for it's off-road prowess.
Part of my concern on the Ridgeline, also, is that Honda isn't exactly known for its pickup trucks (at least here in the USA), unlike other Japanese brands still on the market - but that's just bias on my part.
That said, I think we're likely to see more unibody pickups along the way, and maybe the engineering of the Ridgeline will help lead that direction. There are advantages to it; I'm just biased toward ladder-frame as that's what I've always considered a real truck to use...
Oooph, as someone in the automotive industry, I would avoid that thing like the plague. Have you checked the recall for going through the car wash causing that truck to light on fire[0]? One burned down at my neighborhood convenience store a couple of weeks ago...
I would much much much more readily trust the engineering of GM on trucks, but that's probably only meaningful if you actually intend to tow something. I have a Ford truck, but that's mostly due to rust concerns in the Southeast Michigan area.
All of this is to say that I would trust the domestic manufacturers on anything truck related before I would trust one of the foreign companies, Toyota definitely included. It's simply a matter of core competency, regardless of percentage of US content.
There is literally a war named after the Hilux because it was such a combination of cheap and super reliable despite the terrible conditions that it’s what all the local warlords used. There is a top gear episode where they roll over one with a monster truck several times and it refuses to stop working. Toyota doesn’t need any lessons from us manufacturers about reliability.
I'm really tired of this "hurr-durr Hilux indestructible" meme. They used it because they were there and available. In areas with limited supply chain infrastructure there is very much a network effect when it comes to machines that need a pretty substantial supply chain. It would have been the S10 war or the Ranger war had GM or Ford been the dominant manufacturer in that region. Toyota does not make cars that are magically immune to the laws of physics. They degrade with use like everything else and eventually suffer mechanical failure.
Okay, drop a building on a Ford Ranger and clear the rubble away and try to drive it away after. That is, after you've drowned it in the ocean and set it on fire.
When I wrote my original comment I was this >< close to proactively responding to the top gear crap that every fanboy seems to think was handed down from god.
Top gear is automotive themed entertainment not a documentary. Anyone who has ever worked on cars knows this. You can bet there was a lot of off camera hackery to get the truck running each time. It didn't just drive away.
I used to pull these trucks (well, all sorts of vehicles) apart for a living. If you pulled the same stunt 10x with 90s Hiluxes and 90s Rangers you'd have more Rangers driving away in one piece because they have a better (taller web specifically) frame and that was the the weak point (at least in topgear's test it was).
>All of this is to say that I would trust the domestic manufacturers on anything truck related before I would trust one of the foreign companies, Toyota definitely included.
As someone that has owned lots of foreign and domestic trucks and family has as well, this is a completely absurd thing to say. My Dad’s farm truck Toyota Tundra is past 333k miles on the same engine.
2015 Silverado owner, my first “American” car. Got it new, now have 75k miles on it. Went with an American brand because of “they know trucks”. So far, replaced catalytic converter, have a driver seat that shifts when I turn right (quoted $800 to fix), have a touch screen that works when it wants and goes crazy switching between views on its own (dealer said they can replace it for $1000, but the new one may start doing the same because they have problems, those were service reps words), just a couple of weeks ago had a brake vacuum pump go bad (lost breaking power luckily just after exiting highway, $630 replacement)
Yeah it pulls a camper well but what good is that if brakes give out.
> have a driver seat that shifts when I turn right (quoted $800 to fix)
Of anything on that list - I'd get this one fixed. I mean, if it's doing that - what's to say you'll be surprised one day it failing causing you to have an accident? Or it not working correctly in an accident.
You might look into what it would take for a custom shop to replace the seats with something else - even something from another vehicle. Manual controls, etc. Something that would be safer. Might be a lot cheaper than getting it "fixed" (which might just fail again in the future).
I once was in the market looking for a used 2-door Tahoe (not easy to find). I ended up finding one that I was going to test drive; looked like a real sweet ride. But then I did some research on the vehicle - it seems that for that particular model, there was an issue on the driver's side seat, where a bracket would fail, usually on acceleration (like an on-ramp for a freeway), and the seat would fall backward. There was never a recall for it. I considered the thought of having something custom done to fix it, but for something like that, I just noped out of it (good thing, too, as I ended up finding what I really wanted - a 1999 Isuzu VehiCROSS - which, while somewhat of a money-pit, I love).
As a counterpoint I have a 2011 Silverado that has never had an issue. I've had to replace normal wear/tear items over the course of 125k miles but that is it. The build quality on Ford/Chevy/Dodge/Toyota is all pretty good these days.
"Ford Motor Company (Ford) is recalling certain 2018 Ford Expedition, F-150, and Lincoln Navigator vehicles equipped with 3.5L GTDI V6 engines. These vehicles have high pressure fuel pump assemblies with welds that can fracture, which may cause an oil or fuel leak."
That said, I don't own a pickup from any manufacturer.
The cruise control recalls were great. Basically, the engineers figured it would be a great idea to route power through a cruise control switch at all times (even when parked). Then to really make the design awesome, they put the switch next to hydraulic brake lines. Over the years corrosion does its thing and would cause cause the switch to arc into the brake fluid.
A neighbor of mine had a Ford Explorer affected by it, he ignored the recall notice. It eventually burst into flames one day while parked in his driveway and the fire department had a great time smashing his windows while putting it out.
I lost count of how many recalls there were for my Ford Focus, including one for my transmission software after 4 trips to my dealer to report a problem they wouldn’t fix.
I would strongly recommend avoiding Ford products.
The thing is, even though I've pretty much always owned a car with a foreign nameplate, I really like most of the domestic cars I've driven. Most Fords look attractive to me, Chevys are getting better lookswise, and most of the time the suspension tuning in domestic cars seems better than I'm used to in Japanese vehicles. I drove a Chevy Sonic once, which is, I believe basically a Korean car, and the sort of car often described as a "shitbox", but I was amazingly planted when going over bumpy pavement at high speed, unlike, say, Hondas that I've driven that feel like they want to skitter off the road.
But there's always been a dealbreaker. Frequently the transmission. I mean, even before it was fully verified that the DCT in the Focus was a disaster, I certainly expected it to have problems and never understood why they would take the risk on a low-end car. People always blame "bean counters" for automotive failures, but it seems (based on my imagination as an outsider) like it's more an unhealthy intersection of cost-cutting and engineers that want to be daring.
There's something to be said for an Odyssey with an uncovered cargo area (the styling on the current generation really drives that point home IMO). For that kind of use the Ridgeline is great.
Except you didn't buy a truck, you bought a tall unibody car with a bed. It has vastly less utility than a frame based truck/suv. If you are happy that's great and ultimately that is all that matters, but to compare ridgeline to silverado or f-150 is just plain wrong, apples and oranges.
Not a Ridgeline owner, but... the reality of pickup ownership in America is that on average they never get used for things that couldn't be done with a wagon or small SUV. Which makes the Ridgeline the best truck out there for most people who buy pickups -- the in-bed storage is super practical, the flat floor provides more usable space in the bed, towing capacity is reasonable for a U-haul / smaller boat / motorcycles.
It would be at the top of my shopping list for when my '05 RAM finally dies but for the bed being too short for most of my motorcycles. I wish 'utes would make a come-back in America and up-size to be more competitive with pickups, a four-door 'ute w/ a 76-inch bed and 1,000lbs of payload would suit me perfectly.
Probably I'll just buy a trailer and put a receiver on my R-350, it can tow plenty and replaced a lot of trips in the RAM.
Not cars in particular but the Swiss and Austrians are obsessed with "Made In Switzerland/Austria" respectively. Especially for foodstuff (cheese, meat, etc).
I see this a lot less in Germany, maybe because nationalism in general is seen as somewhat in bad-taste here.
As someone from an EU country with no domestic caranufacturers: we don't care at all. We buy German. French, Japanese, Korean, Italian and even some US cars. Not many, see the Top Gear review of the F-150 to understand why.
My country does not have car manufacturers, but still supplies a lot of parts to car manufacturers around the world. My BMW was assembled in the US. Not in our neighboring Germany. The car manufacturing industry is much more geographically integrated than most people assume.
There have been occasional limp "Buy British" campaigns, but the UK car industry's reputation for poor quality kind of sank it in the 80s. I'm not sure how many buyers could tell you which Nissan/Ford/Vauxhall (Opel) models are made in the UK any more.
It is true for Detroit, but GM is still the largest auto employer in Michigan. Lots of jobs at three plants in the state capital of Lansing and a handful in Flint and Grand Rapids.
I’m mostly positive about Andrew Yang but it’s frustrating to know he would point to something like this and scream “automation” when GM’s downsizing has more to do with outsourcing and a slowing market than anything remotely related to robots taking over jobs.
The difference between automation and outsourcing is that automation can actually save domestic jobs. Labor costs are lower in other countries and that is likely to continue, so for US workers to stay competitive they need to be more productive and justify the higher compensation. Which is what automation does -- you get more cars for the same number of labor hours, justifying the higher wages.
That means you get a choice between losing some jobs to reduced labor requirements from automation but keeping the remaining ones, or losing all of them to foreign labor competition. Which may itself use automation regardless of what you do domestically.
You can also get net job gains from automation in markets subject to the Jevons paradox. You make each widget cost 50% as much by reducing jobs by 50%, but that causes people to buy ten times as many widgets, so you really end up with five times as many domestic jobs. Or five times as many foreign jobs, if the other country automates and you don't.
I follow your point, but I'm not sure the research or my personal experience proves that to be true.
In some cases, automation leads to net job growth (e.g., there are more bank tellers now than before the invention of ATMs), but I think that is the exception rather than the rule. Especially in manufacturing, automation absolutely guts jobs. A line that was run by dozens can be run by a just a couple. The balance is so far to one side I think it's hard to make a case that automation saves many jobs. It seems to me that the paradox you bring up would only apply to very limited use cases; I don't know many products people would want to increase consumption on scale with the job loss for that to work. But I may be biased by my automation experience in high dollar products.
Example: I know of an onion farmer who recently automated. Even if all other onion farmers automated im not going to 5x my consumption of onions, and that's a low cost product
The point isn't that all markets work like that, it's that it can, in a way that outsourcing can't. Even if outsourcing results in lower prices which increase demand, the additional jobs then go to the country the jobs were outsourced to, not to the original country.
You're also looking at the overall market rather than a single company or country. If you automate before your competitors, the result is that you can produce onions for 20% the original price because you need 20% as many workers per kilo of onions. Even if people buy exactly the same total number of onions at the lower price, they now buy 25 times as many from your company and your country because you have the best price on the world market, so you hire five times as many domestic workers.
If other countries do the same thing then you're back to parity and everyone requires 20% as many jobs to produce that many onions, but you still have more domestic jobs than if they automated and you didn't, because in that case you would end up with zero flat rather than at least keeping 20% of the original workforce.
I'm following your point, but it's more of a "lesser of two evils" arguement than saying automation creates net job growth. Its not even growth its just lessened job loss.
As the efficiency continues to improve, if demand doesn't follow suit the will be an inevitable job loss. The factories I witnessed automation come in did not ever bring those lost jobs back. Sure, in the short term the displaced workers were sometimes moved to a different plant, but those jobs are almost certainly getting automated in the future too.
It's much easier to picture robots and automation than go into complicated discussions about outsourcing and market forces. Main stream media gives Yang less than 2 minutes to explain his platform when he appears on TV so he has to distill it down into sound bites. The next Democratic debate is going to be another reality TV squawk fest with 10 candidates on stage prepped to throw oneliners and soundbites.
They are subtle but there. Automation means the productivity is local - albeit concentrated in the automatees and implies an upwards trajectory to quality - giving a competitive edge. The industry is still there and likely growing stronger and more concentrated in skill.
Outsourcing implies going to the lowest bidder and less investment locally with fewer peripheral jobs. It is also "brute force" and commoditization. Inevitably the destination nation will develop competition which may be able to compete with the abroad nation who will have little special on them. It risks the loss of the industry even as an outsourcer.
screaming automation doesn't bring up the specters of xenohpobia/nationalism etc. besides that, the image of robots taking all the jobs is evocative and easy for the average person with little to no understanding of economics to respond to.
Wow, Chrysler has made quite the turn-around, I just noticed from that chart. 10 years ago, I expected them to be out of business by now with their low reliability (which I believe is still one of the lowest). Chrysler has a pretty terrible reputation, but their minivans have a good reputation (I know, I own one with 90k miles, and it's an amazing value and has been very reliable). The Jeep brand is killing it, lots of die hard fans of the nameplate. They also made a good move rebranding Dodge Rams to just Ram.
One thing that makes these employment numbers a little questionable is that car manufacturers are mostly component assemblers, with differing amounts of components made in-house vs bought from other companies which may be US companies or might not be.
I know this is true for a lot of things, but my occasional experience with the auto-industry gives me the sense that it is more true for the auto industry than other places.
I imagine they used "Detroit" for the same reason metro dwellers claim Detroit. It avoids digressions explaining where places like Auburn Hills or Royal Oak actually are when it's not pertinent to the point. Its short-hand, even if lazy
That’s different. That’s because people don’t know the local cities of the area. I’m sure many people also say South Michigan or if not for Michigan that is done in other states. Either saying the local big city or geographic area location in state.
Vs talking about stuff like Ford not being Detroit because it’s merely close as hell to Detroit and essentially considered Detroit when talking about Detroit as a car industry hub.
I was looking at their trucks, and left the showroom when I saw one that had 45% domestic content. I bought a truck that had the most USA content...a Honda Ridgeline.