Tuesday, July 19, 2005

The reality of "Free Trade"

Ladies and Gentlemen, it's time for my soapbox to come out. So if you're not interested in my rants, than pass this one by. Of course, I'm hoping that one of the reasons you visit (in small numbers) is because of my ocassional rant.

US automakers control less than half of the market share in the US. Not a surprise to anyone I'm sure. And US Automakers sell very few cars overseas (Ford being an exception, but that will be clearer later.) Now ask yourself why the later is true. Is it because the US automakers can't build quality vehicles? I don't think so.

The reason are high taxes or tarrifs on imported vehicles. A Corvette or Mustang in Japan would be as expensive as a Ferarri here. The same goes for many countries. The only reason Ford sells so many F Series trucks world wide, is because they're built locally. Did you think Ford exported all those F Series from the US?

If you look at my archives, you will see posts about South American Fords, such as the Falcon which sold in Argentina mostly unchanged until 1991 and the Galaxie that sold in Brazil until the 80's. Many countries have tarrifs or high taxes on imported cars. One way around this has been to build locally in these markets, such as Ford has done.

Now with proposed Trade Agreements with Thailand, there is a possability of a flood of trucks from Japanese manufacturers who build locally in Thailand. An end run around tarrifs and taxes that are in place on both sides.

As Americans, we buy cars because of price, economy and value. But shouldn't we also think about our own economy? If we all buy cars and trucks made in Asia then much of our manufacturing industry will eventually colapse. Now maybe you don't work in manufacturing and don't care what happens to some "lazy" UAW worker. Well shame on you, for not seeing the bigger picture. If all the people that work in manufacturing loose their jobs, then all of us suffer. Yep all of us, from Movie Stars and Musicians down to the clerk at Shoprite and A&P.

Autoworkers are people, who spend money on movies, music, food, houses and clothing. It's bad enough that half of what we buy comes from Asia now (check the labels on your clothes and electronics) Do we need to cripple our own economy?

Japanese consumers buy Japanese cars, because they want to keep their economy strong. Same for other goods. Shouldn't we buy with this in mind?

I buy American, for several reasons, quality is one of them, common sense is another. So when idiots call trade agreements and tarrifs protectionism, maybe it's something worth protecting, like an American standard of living and healthy economy. If you export all the jobs and import al the goods, who's going to have a job to pay for all of this? We can't all work at WalMart !!


Anonymous said...

well said. and on the mark. except ... Don't japanese company's like Honda and Toyota build cars here? what about BMW and Mercedes Benz ? and Ford & Daimler chrysler shifted plants north of the border.


Big Ford Fan said...

MM, it's true that Honda, Toyota and even Hyundai build cars here. And they do support American households. But it's also true that this too is to bypass local tarrifs and taxes and we do not have an equitable trade scenario with Japan or any of the other Asian countries, especially China.
As for the German automakers, their impact on our market is tiny.

Ford, and DMC have shifted plants north of the border and will build plants in china.

My overal point is still valid.

Shawn said...

Japanese auto makers are basically government institutions. It's a different type of economic system.

They maybe building cars here in the US, but the VAST majority of the funds are going overseas to Japan.

You know what, I got nothing against foreign companies. I have issues with fairness. I would like to see: 1. Equal trade conditions. 2. Equal government subsidies.

I'm not familiar with the European economic system, so I won't comment on it.

Big Ford Fan said...

Shawn, thanks for commenting, I agree with you. There is a need for more equitable trade and government involvement.

Japan operates unders some major philosphical differences. While there is no longer the "Employment for life" that there was in Japan. Loyalty to your company is still a major motivator.

I wonder if you recall a recent news item where employees at a US Chrysler manufacturing plant were complaining when told that any employee who drove a non chrysler vehicle would be required to park in a lot slightly farther away than employees who drive Chrysler products. They felt put out.

You know what? In Japan, they would feel shame. How can you earn a living from a company and not support it? If you work for Toyota, I would expect you to drive a Toyota. If you work for GM, I would expect you to drive a GM.

Anonymous said...

problem is when you see union workers driving land rovers and lincolns and living in airstreams

Big Ford Fan said...

"problem is when you see union workers driving land rovers and lincolns and living in airstreams"

OK, I've got a problem with this comment. First, if said Union worker is employed by Ford then what's wrong with him driving a Lincoln or a Land Rover? Both are Ford products. Is it because you feel he should be driving a beat up pickup or a Focus. Don't show your ignorance by jumping on Union Employees.

Second, "living in Airstreams" ???
Where someone lives is not related to my comments about loyalty to their employer. If you are making a crack about people living in mobile homes, then again, you've shown your limitations.

If a Chrysler employee wants to buy a Mercedes, that's fine. If a Ford Employee can afford a Jaquar or Aston Martin, that's also fine. It doesn't matter if you're Union or not. If you earn your living working for a company, you should show pride in the fact and support your own company. The same would apply if you worked for a company that makes tools or soda.

TommyO said...

What a wide range of comments. First, I will start with the last paragraph of your post. We can't all work at Walmart. Well being that your enire post has to do with American labor and manufacturing that is mostly connected with organized labor like the UAW and AFL-CIO, I found it very odd that you speak of WalMart, the least union friendly employer I can think of. As a union firefighter, I refuse to shop there. Never will. Second, you say that buying American supports the American economy. Well, not entirely true. As some of these posts state, many of these vehicles are designed, built, sold and then serviced by American employess. The corporate profits may go back to other countries, but the money that is spent in the independantly owned dealerships is not, nor is the money earned by the factory worker assembling the car or the design teams and management teams headquartered in the U.S. Mercedes Benz and BMW both have their U.S. headquarters in Paramus, N.J. and employ many American workers. This is money that stays in the U.S. Some of the towns that the factories are built in would be utterly lost without the world automakers deciding to build in the U.S. The money made on the sale of the car is only one small piece of the pie. The fact is, with all of the other factors involved, including outsourcing of many parts for these vehicles by American suppliers, a more global corporate economy and product assembly in the states, there is actually an increase to our economy in some regards. Lastly, the issue comes down to import and export. The pressure needs to be put on other governments to reduce the incredible tariffs put on American goods. A balance needs to be struck. If a government sees fit to restrict American imports by heavy tariffs, then the same should be levied on there exports. That is fair. In a free trade market, all parties should have an equal chance, then and only then will the value of these goods truly be measured fairly. Lastly, an empoyee should not be obligated to purchase products sold by their employer. If you worked for GM, but wanted your Mustang, would you settle for a GTO? No, and you shouldn't have to, nor should you be penalized for buying what you want with your hard earned money. I know that I have touched a lot of points, but these are facts that often get overlooked.

Anonymous said...

Overly generous past contracts helped get Ford & GM where they are now(just one part of many causes for their current situation). It's too bad that the uaw won't recognize the threat to the domestic auto industry, and instead keeps threatening action over any types of cuts.
What I'd like to see is a reduction in the prohibitively high tariffs the Japanese stick on our cars, the UAW play ball with the Big 2, and better quality. My 2000 Saturn LS2 sucks balls.

Anonymous said...

Anonymous, first, you bought a Saturn, your mistake. It's a GM. Second, obviously you don't have a clue about the UAW, you should read a little before you write.

Big Ford Fan said...

to the last two posters, Please sign the bottom of your comments with a nickname or initials.

Also try and keep away from personal attacks or comments.

I'd like for people to feel comfortable speaking their minds wihtout fear of ridicule.

You don't have to agreee, but keep it civil.

Anonymous said...

So, you know so much about the UAW, eh? I suppose you are a member, so you know all about them recognizing the threat to the Big2 (3, incl. DCX). Cause they're working with the mfr's, right? Ha, ha.


Anonymous said...

UAW President Ron Gettelfinger says the UAW is not conceding that GM is in a health care cost crisis that demands union concessions...
...Gettelfinger says the real health care answer isn't just shifting the costs to workers.
"We need to push for national health care in some form or fashion."

So, instead of them paying for it, the other taxpayers can pay for it. Because we all know that socialized healthcare is better, cause it's run by the government, and you get helped right away with the best equipment, and you don't need to import millions of immigrants to help pay for the costs of today's health. God help the taxpayers and the sick if it ever passes.


Big Ford Fan said...

Dave, thanks for signing your posts.

I wouldn't normally weigh in on a non automotive topic, but socialized medecine is something that scares the hell out of me.

I know that the AFL CIO is lobbying for socialized medecine. And even though I'm a Union member (not UAW) I don't think it's the answer.

I will step a little further out on a limb and agree that the UAW needs to agree to concesions on healthcare and wages, in order to keep jobs.

Anonymous said...

trouble in union nirvana, seems the AFL-CIO is breaking up. good , maybe the can get back to the real job. and make sure jobs are safe well paying and here in the USA. and stay out of the beltway brothels (lobyist). unions are needed but millionare leaders are in board rooms not union halls.

Big Ford Fan said...

The situation with the AFL CIO is nothing that should be taken so lightly. While it may be easy to take shots at union leadership. It will be the rank and file members who suffer as Labor takes another blow.

And again, I ask that those that post anonymouosly please sign your posts with initials or nickname.

If everyone posts anonymously, then it makes it difficult to follow the thread of conversation.

Say what you want, you're allowed, but please sign your post somehow.

If I'm forced to, I can stop anonymous posting alltogether.


mel said...

People need to look at the big picture as stated.....Ford owns many companies, as well as GM. Like I said I just bought a Mazda Tribute-built by Union workers in America KC-MO.-the sticker says Foreign content NONE. Now you can say Hondas (and the like )are built in the USA....but Autoline Detroit published the number of Manufacturers that build American products in America---Ford 93%, GM 79%, Nissan 76 %, Toyota 57%, Honda 56%-proof is in the numbers-now in a recent article by the Associated Press Honda Employees in Japan just got a raise-no kidding-to $5.30 per hour. Now, my father was in the military, and we lived in Okinawa, and now I live in Marysville, Ohio-where Hondas are built-they are an inconsitent company that people do not talk bad about....why who knows, but even as the CRVs were blowing uo (72 to date), there is not as much publicity as the Ford/Firestone mess. The Bias of this country is ridiculous, and I just did research on how many cars Ford sold in Japan last year 5,813. Why, for instance the Focus costd 24,000.00. Now-people can say what they want, but the trading is not fair. When they send a CRV over here it costs this amount-I can go on and on-some food for thought!!!
Stop Helping Our Nation Destroy America.