About 13,000 U.S. auto workers have stopped making vehicles and headed for the picket lines. Their leaders have been unable to bridge a giant gap between union demands in contract talks and what Detroit’s three automakers are willing to pay.
They kinda already did, the big automakers fighting unions are arguably what caused Detroit’s current situation. I wonder if they can outsource even more or if they’re stuck for some reason.
It’s not a case of being “stuck” per se. It’s just not cost effective to move production on this kind of stuff overseas. Shipping goes by volume, and cars have an absolutely atrocious cost to volume ratio (think about how many dollars worth of iPhones you could stuff into the space occupied by a single car). It makes a lot more sense to build them where you plan to sell them (broadly speaking). That’s why a lot of car manufacturing still happens in countries like the US, Canada, and the UK.
It’s what they are good at, comparing costs and maximizing profits.
They will find the way to get around it at least partially even if they have to invest into fully automatic production with limited human labor.
Not disagreeing, but isn’t there also protectionist incentives to at least assembly them in the US too? Benn a while since I remember reading it, but seem to remember there are many tarrifs, tax incentives, and etc that make it a complex situation for auto makers.
This isn’t the most substantive of your comments in this chain, but I think it deserves some attention. It’s perfectly worded and it’s a concept more people need to embrace: you don’t have to speak in absolutes and it’s okay to express the limits of your knowledge.
They kinda already did, the big automakers fighting unions are arguably what caused Detroit’s current situation. I wonder if they can outsource even more or if they’re stuck for some reason.
It’s not a case of being “stuck” per se. It’s just not cost effective to move production on this kind of stuff overseas. Shipping goes by volume, and cars have an absolutely atrocious cost to volume ratio (think about how many dollars worth of iPhones you could stuff into the space occupied by a single car). It makes a lot more sense to build them where you plan to sell them (broadly speaking). That’s why a lot of car manufacturing still happens in countries like the US, Canada, and the UK.
It’s what they are good at, comparing costs and maximizing profits.
They will find the way to get around it at least partially even if they have to invest into fully automatic production with limited human labor.
Not disagreeing, but isn’t there also protectionist incentives to at least assembly them in the US too? Benn a while since I remember reading it, but seem to remember there are many tarrifs, tax incentives, and etc that make it a complex situation for auto makers.
I believe you are very likely correct about that, but I wouldn’t want to say for sure without doing some digging.
This isn’t the most substantive of your comments in this chain, but I think it deserves some attention. It’s perfectly worded and it’s a concept more people need to embrace: you don’t have to speak in absolutes and it’s okay to express the limits of your knowledge.