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WSJ Editorial critical of Toyota and the Prius

Discussion in 'Gen 2 Prius Main Forum' started by donee, Feb 21, 2007.

  1. donee

    donee New Member

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    Hi All,

    What we have here is another LAS BS'er. The WSJ should be ashamed they let such technical incompetence and spin be published in their paper.

    Saying (or implying) equivalence between the Prius and the 2K lbs 0-60 in 15 second cars mentioned is hogwash. Try to put 4 adult americans in an Echo, or even a single 6 foot 3 , 250 lb man in one, and the difference between the the cars is clear. Sure, anybody can make a 100 mpg car, if you only want to transport one 180 lb person in it, with no cargo space, and limit 0-60 time to over 15 seconds. When those cars were tuned up for American traffic conditions, the mileage went down down down.

    Then he goes on to call the tax credit "rediculous" when its a temporary phased out thing, to help with a temporary natural disaster induced gasoline shortage problem. And then he does not even mention the truly rediculous 6000 lb SUV commuting lawyer or doctor, seemly in-perpetuity $50 K tax deduction. When a President from Texas tells us we as a nation have a pertroleum importing problem - its like Nixon going to China!

    Toyota got lucky? Seems like the most hard won 10 years of hard work luck I have ever seen. They made a plan based on the inevitable, and when the ace in the deck came up they were ready for it. Somethings seem lucky, when they are actually shrewdly planned for. Everything in the heavens goes round-and-round and any college science-tracked freshman can tell you that periodically those things allign. How many Metro Xfi's would have been able to make it to Dallas from Houston without refueling during the huricane evacuation? None. Because the busy hybrid technology works best in the busy metropolitan where most cars are used, or in 400 mile long evacuation traffic jams.

    If the HSD is such a "mechanically complex" system, how come those HSD parts that replace the traditional automatic transmission, starter and alternator cost $800 less? Because WSJ got it wrong. The HSD system greatly simplifies the mechanics, and adds robust multifunctional electrical parts in a system that ends up cheaper, except for the cost of the battery. A Toyota engineer admitted the socalled "Hybrid Markup" was $2000 in public. Yet the Prius battery is $2800 . That means the HSD transaxle and electronic inverter replace traditional parts that cost $800 more than the HSD transaxle and electronic inverter!

    And what is this crap about emotion in marketing. SUV's exist primarily because of the this tactic, and now if Toyota markets to the same population in the same way, its some kinda trick. Yea, its a trick the SAME trick GM, Ford and Chrysler have been playing since 1949! Fat fins on cars (with half clad women flying on the hood)? Give me a break! SUV for commuting (that in double cost off-road trim can climb unpaved mountain roads), give me a break! A work truck that can brake safely downhill towing a big heavy tool trailer - makes sense! Get your ostrich heads out of the oil-well hole WSJ.

    As far as the big-three being competent users of capital, I think most of here would not agree that the GM-UAW Job's Bank program was such. And neither was it a legacy cost. It was outright ghost-payrolling, with some public-service added to sell the idea that john-q-american-car buyer should feel good about paying for it !

    The first hybrid I ever saw was a Chevy Vega GM sponsored research project - in 1979!! Nobody can tell me that they could not have brought out a profitable 2 mile battery range PHEV series hybrid the size of the Prius that would be seriously competing with the Prius in 2000 or before.
     
  2. priusenvy

    priusenvy Senior Member

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    Today's WSJ had an editorial that was critical of Toyota and the Prius. I don't have a WSJ online subscription and can't quote it so I'm not posting this in the news forum.

    While I agree with a few things the author wrote, I don't agree with most of it, and definitely don't agree with his conclusions. He says that the big three consciously bet correctly on SUVs many years ago. I'd say they lucked into it. They couldn't predict where gas prices were going to go (if they could, shouldn't they have also been able to predict the high prices now and avoid the mess they are in today?) and they lucked into several years of historically low gas prices.

    At the end of his piece he states that the big three's problems are mainly due to legacy UAW expenses (health care and pensions), and if it weren't for that, they'd be competitive with Japanese automakers. Those expenses cut into their profitability (like to the tune of over $1k per vehicle sold), but that is not what makes their vehicles undesireable to so many people. I mean, knock $1k off the price of a GM vehicle, is that going to make you buy it now?

    I am not a Prius apologist, but I would not be surprised if the author of the editorial was paid indirectly by one or more of the big three automakers. He made too many ridiculous claims to be credible.
     
  3. malorn

    malorn Senior Member

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    <div class='quotetop'>QUOTE(priusenvy @ Feb 21 2007, 07:27 PM) [snapback]394296[/snapback]</div>
    Article:
    Edmunds.com for years reviewed the Toyota Echo, the company's entry-level vehicle, by describing it as the cheapest car in America and still overpriced.

    Even after the Echo was finally dropped last year from the U.S. market, the authoritative auto site couldn't resist reminding shoppers it had once whispered in their ears, "Friends don't let friends drive Echos." And Edmunds offers only marginally more favorable comment on the Toyota Yaris, the vehicle that took the Echo's place, calling it a "decent subcompact" but advising shoppers to "keep an open mind" about competing vehicles, including the Chevy Aveo.

    Or take the Prius, the car that made Toyota a star in certain circles and perhaps even began to redress its reputation for bloodless, uninteresting vehicles. The Prius has hardly been burning up the sales charts lately. With a ridiculous federal tax giveaway expiring, Toyota has been reduced to dangling incentives even in front of California buyers. All this transpires while the EPA is still putting finishing touches on new mileage ratings that will sharply downgrade the Prius's gas performance.

    What Toyota really proved with the Prius, ironically, is that Americans have little appetite for high mileage vehicles -- in fact, are willing to buy one only when the stars align briefly and inexplicably to turn a car into a Hollywood-accredited emblem of personal enlightenment.

    To put it baldly, Toyota got lucky. Any motorist truly intent on burning less gasoline and saving the planet could have found a vehicle that produces mileage as good or better than the Prius's, without paying Toyota a premium for its busy "hybrid" technology. Designing a car that uses less gas, after all, is a snap. In the mid-1980s, Honda marketed a version of its sporty CRX that got an honest 50-plus miles to the gallon. In 1990, GM and Suzuki built the Geo Metro XFi, good for 53 in the city. But customers have to be willing to buy it. Detroit would have been only too glad to soak consumers for a high-tech, fuel-saving vehicle had consumers declared their willingness to be soaked. But apart from a few statesiders who might embrace such a car as a fad, it makes enduring sense only in markets where taxes keep gasoline prices in the stratosphere.

    And forget the guff about Toyota investing long-term for the end of oil. Hybrid technology is a mere fuel extender, and a heavy, mechanically complex one for so modest a return in gasoline savings. It shrieks technological dead-end.

    We offer these thoughts as corrective to the tendency to slobber over Toyota, on track to become the world's biggest car maker, especially given the rumored unraveling of DaimlerChrysler (though the real culprit there was the German side's consistent knack for screwing up a good thing). Yes, Toyota is an excellent company. Its commitment to disciplined manufacturing explains why in some developing countries the streets are jammed with Toyotas, especially its ubiquitous HiAce minivan. Toyotas often seem the only vehicles on the road -- or perhaps the only vehicles still on the road thanks to their sturdiness.

    But if being the biggest were such an asset, GM would be a world beater today. In fact, GM is shrinking on purpose, sacrificing market share for profitability, lessening its reliance on sales to rental fleets, which depress the value and image of all GM vehicles. As Edmunds recites in chapter and verse, Toyotas are far from being in a class by themselves in quality or value. A buyer who carefully, unemotionally weighs the trade-offs does not automatically end up owning a Toyota, or even a Japanese car -- though shoppers whose perceptions are a lagging indicator still treat Detroit products as automatically inferior.

    And Toyota has some disadvantages, while U.S. auto makers have advantages. Having tradition and heritage to draw upon is an advantage. Toyota is singularly weak in this regard. Few signature cars come to mind through the decades. That's why Toyota's new FJ Cruiser has earned unprecedented gushing from the automotive press -- Toyota ransacked its past for visual cues and, for once, was able to make a customer feel something for one of its vehicles.

    Profits are not assured by economies of scale. That's one lesson of the DaimlerChrysler merger, which was supposed to shave a couple nickels off the cost of every component by spreading their development over a larger vehicle output. As important and becoming more important in a crowded marketplace is a knack for turning out cars with ineffable cultural appeal. Toyota's world-wide success so far has come without being strong in this department. And Toyota knows it: Hence its constant invocation of the word "emotion" in how it approaches marketing its important new Tundra pickup.

    Cars are transportation: Buyers interested in a low-risk investment in transportation can seldom go wrong by buying Toyota. But car companies are profit-seeking organizations. Though it's popular to sneer at the Big Three, they raked in many billions correctly judging a consumer appetite for large SUVs and pickups, including millions of pickups purchased by cosmetic cowboys who drive them to their office jobs. These were and remain impressive feats in consumer design -- as befitting products in which the Big Three were willing to invest precious capital, as distinct from the workaday sedans they churn out just to break even on their UAW labor contracts. And unlike Toyota with its Prius, the Big Three produce and sell their fashion statements at a profit, a goal that still reportedly eludes the Toyota hybrid.

    The Big Three are far from incompetent car makers -- or incompetent users of capital. Their big problem is that, thanks to their legacy labor issues, the financial markets simply will not afford them the leeway to make large capital investments in sedan styling and technology. These labor legacies are a product of history and a set of political and market arrangements. Fix that problem, and any Detroit car maker that's still around has plenty of potential to compete successfully with Toyota or anyone else.
     
  4. malorn

    malorn Senior Member

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    <div class='quotetop'>QUOTE(priusenvy @ Feb 21 2007, 07:27 PM) [snapback]394296[/snapback]</div>
    Paid by the big three to write a positive article in the WSJ? Don't you think it might be a bit of a stretch? He is on the WSJ editorial baord.
     
  5. Prius The First

    Prius The First New Member

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    WSJ - All things Conservative and Republican. What did you expect, Prius owners would be greeted with flowers and chocolates? NO WAIT that was the Iraqis.
     
  6. hobbit

    hobbit Senior Member

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    "Couldn't predict where gas prices were going" ??! Horsepuckey.
    The ole-boy network is fully up and running, that's pretty obvious.
    .
    _H*
     
  7. kn6vv

    kn6vv Junior Member

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    <div class='quotetop'>QUOTE(priusenvy @ Feb 21 2007, 06:27 PM) [snapback]394296[/snapback]</div>

    My guess would be that he and his buddies were big $$ into the big three and watched their stock free fall from their high rise office like a streamline manhole cover. :eek:

    Since the big three auto company execs are building cars people don't want and won't sell, the profits must now come out of the workers who build them. It worked for the airlines when they used bankruptcy laws to "extract" profits from their employees so why not? The airline execs got their wish, extracted billions of $$ from its own employees and airline travel is worse now than it ever has been! What a great business plan! Now its time for the US auto execs.

    My Prius is the first Toyota ever for me. I do not expect it to be my last either! :D I've also been happy with my Fords but the last few GM cars I had were absolute disasters. Some have told me that I made a mistake and should "support" the USA by buying from the big three. I disagree with that logic.

    I love this country but buying from the big three in my opinion does NOT support the USA. My last GM vehicle was built in Mexico using "cheaper" labor. It was the worse car I ever owned with respect to reliability! The American workers who SHOULD be building them I guess have been laid off or given part time jobs or minimal wages with no benefits somewhere else. I like my Ford but many of the components were built outside the USA and the vehicle was assembled in Canada! The only Americans I am supporting at the big three are those "higher ups" with the power to outsource jobs to other countries, cut wages to Walmart status, eliminate benefits, abandon retirement plans onto the US tax payers via PBGC, and layoff other Americans so I can have my big three made car that nobody wants for a few dollars less.

    Corporate America just doesn't get it. Selling a product "cheaper" than the competition with a higher profit margin does NOT mean positive results if nobody wants the crappy product! I saw people in line to buy the Prius at MSRP when I bought mine (and more than MSRP in some parts of the US)!!!! I see no lines at the big three dealerships, just sad faces on the sales staff despite mega dollars in rebate offers on cars nobody wants or buys. :(

    Toyota and other foreign auto companies ARE using American workers in USA plants to build their cars and with better results than the big three because they are building cars people want with quality! This IS supporting America in my opinion!

    I see Toyota, Honda, etc. trying to build a better car for the consumer. The big three are trying to build better profits for the "higher ups" off the backs of their own workers and from the buyers of their autos. Like many of you I do see the difference and bought my first Toyota!

    I am so happy with my Prius. It will NOT be my last Toyota if I can help it!
     
  8. JimN

    JimN Let the games begin!

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    <div class='quotetop'>QUOTE(malorn @ Feb 21 2007, 08:45 PM) [snapback]394302[/snapback]</div>
    If cars were just transportation we'd all still be driving the Ford Model T (in black). Henry couldn't understand people wanted better and different.

    Does anyone actually believe GM's hybrids will sell as fast as Toyota's? I'll bet GM will enjoy the hybrid tax credit on their vehicles a lot longer than Toyota did.
     
  9. malorn

    malorn Senior Member

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    <div class='quotetop'>QUOTE(kn6vv @ Feb 21 2007, 09:50 PM) [snapback]394348[/snapback]</div>
    Which GM "car" did you buy which was made in Mexico? I know all GM and Fords are made in Mexico and Canada. Strange GM and Ford laid off more than twice as many people fromm their plants in the last 12 months as Toyota employs in total in North America. Something in the math does not add up, Toyota builds their cars and trucks in the US and GM and Ford do not. How come the "net" US auto jobs keeps dropping like a rock? I know I have been in toyota show rooms and the salespeople are obviously coached to say all that crap. Do you have to believe it hook, line and sinker?

    i 'm waiting for the model and first five of the vin of your GM mexican-made vehicle. Were you stretching the truth for your post? ;) Why don't you let me know what the North american content is of that Prius you are so proud of?
     
  10. homer315

    homer315 New Member

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    "To put it baldly, Toyota got lucky. Any motorist truly intent on burning less gasoline and saving the planet could have found a vehicle that produces mileage as good or better than the Prius's, without paying Toyota a premium for its busy "hybrid" technology. Designing a car that uses less gas, after all, is a snap. In the mid-1980s, Honda marketed a version of its sporty CRX that got an honest 50-plus miles to the gallon. In 1990, GM and Suzuki built the Geo Metro XFi, good for 53 in the city. But customers have to be willing to buy it. Detroit would have been only too glad to soak consumers for a high-tech, fuel-saving vehicle had consumers declared their willingness to be soaked. But apart from a few statesiders who might embrace such a car as a fad, it makes enduring sense only in markets where taxes keep gasoline prices in the stratosphere."


    Obviously a ridiculously uniformed writer. Shall we compare specs?

    1984 Honda CRX HF: EPA: 49/53, Weight: 1754 lbs; Torque: 73ft-lbs, HP: 60hp; 0-60: 12-13 sec
    1990 Geo Metro: EPA: 53/58, Weight: 1753 lbs; Torque: 56 ft-lbs, HP: 49 hp; 0-60: 13.5 sec
    2007 Prius EPA: 51/60, Weigth: 2932 lbs; Torque: 300 ft-lbs, HP: 110hp; 0-60: 10sec

    Plus the Metro and CRX each had about 6 cubic feet of cargo and never got better than a "marginal" in crash tests. The Prius is the first car to acheive better than 50mpg mileage without sacrifices.

    The WSJ has shown a longstanding antihybrid bias, likely reflecting either their conservative leanings or heavy investment in Detroit. It will be great when the 80 mpg '08 Prius comes out. Then the cynics won't be able to denigrate it by comparing it to vastly inferior vehicles since it will be breaking new ground in efficiency.
     
  11. Tideland Prius

    Tideland Prius Moderator of the North
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    <div class='quotetop'>QUOTE(homer315 @ Feb 21 2007, 08:48 PM) [snapback]394377[/snapback]</div>
    Actually the Prius has ~115lb-ft of torque at the wheel as measured by a dyno. hp is about 100-105hp at the wheel.
     
  12. Godiva

    Godiva AmeriKan Citizen

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    <div class='quotetop'>QUOTE(homer315 @ Feb 21 2007, 11:48 PM) [snapback]394377[/snapback]</div>
    Except it's not just about less gas or more power. (And comparing the size of a Geo Metro and a Prius?)

    It's also about less emissions. A lot less.

    Beat that with a stick.
     
  13. zqfmbg

    zqfmbg New Member

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    Whew, so many things here to pick at. Gotta love the references to the Yaris and the Echo at the top, setting the tone for the rest of the article (i.e. Toyota puts out bad cars). Never mind that the Yaris review takes "decent subcompact" and "keep an open mind" and twists them into "only marginally more favorable comment". And how about comparing the Prius to two cars that are smaller than it?

    No, I think the final paragraphs sum up what's wrong with this piece.

    <div class='quotetop'>QUOTE(malorn @ Feb 21 2007, 05:45 PM) [snapback]394302[/snapback]</div>
    So let me get this straight. Economic might makes right? The thing that really stings me is te insinuation that "market makes right". Americans were more than willing to buy large numbers of these large behemoths; hence, creating the large behemoths was The Right Thing To Do ™. This is highlighted further on in the paragraph with the disdainful view on the smaller cars that they make -- as if the only reason to do it is because someone else makes you. That paragraph right there makes it sound like the author's perfect world is one in which we're all driving big SUVs and trucks around. (Heh, so where do sports cars fit in there...)

    The last paragraph reads like an anti-union slap. It's worded very peculiarly, perhaps as an attempt to disguise it.
     
  14. Arroyo

    Arroyo Member

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  15. Ken Cooper

    Ken Cooper New Member

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    Wow! How dare that American bastion of free enterprise, the Wall Street Journal, attempt to bash Toyota while standing up for the American car manufacturers. Maybe they should be more like members of this forum and take advantage of every possible chance to slam those Detroit folks.
     
  16. DaveG

    DaveG Member

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    <div class='quotetop'>QUOTE(Ken Cooper @ Feb 21 2007, 11:55 PM) [snapback]394419[/snapback]</div>
    I detect a bit of sarcasm there Ken - it's almost as if you're saying the Detroit auto manufacturers are innocent victims in the whole thing, rather than big car companies that mis-read their market and are now suffering for it.

    I don't need to slam the American "Big-3", everything that's happened has been brought-on in one way or another by their own actions...

    Consumers just want a better product at a reasonable price - and if domestic manufacturers can't handle that, they'll go elsewhere.
     
  17. chogan

    chogan New Member

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    As a long-time reader of the Wall Street Journal and Barrons, I'll give you my opinion of how the WSJ (and Barrons) editorial page works.

    The Wall Street Journal is an excellent, top-quality, fact-oriented newspaper, and arguably the most reliable source when it comes to technical information relating to the economics of just about anything.

    Except the editorial page.

    The editorial page is straight out of the 19th century robber-baron era. Big business good, all else bad, that's it. It is never useful for the content of what it says. It is notoriously oblivous to fact. It is only good for guessing what some powerful player among the Republican elite wishes to have said.

    So, don't take offense that they slammed fill-in-the-blank with a bunch of baloney and/or praised the unpraisworthy. That's just about the sole, entire purpose of Wall Street Journal editorial page. If an argument could stand on the facts, it'd be in the paper. Only the arguments that can't stand on the facts end up on the WSJ editorial page.

    So, if you see it there, it means it ain't so. When you see obvious propaganda piece on the WSJ editorial page, a) that's what the WSJ editorial page is for, .) you know there's little or no factual argument for what they're saying (or it'd be in the paper proper), and c) the only reasonable question to ask is "who wanted to have this said, and why"?

    The details of what they said hardly matter. If they hadn't made up these arguments, they'd have made up something else. The actual details of the argument are just filler. I think the more interesting question is why this, why now?

    If I had to read the tea leaves, when I see a business newspaper publicly justifying what turned out (for the time being) to have been poor long-run choices by some companines (a lineup with gas-guzzlers but no gas-sippers, which earned outstanding profits through the 1990s but losses now), and villifying what appears to have been a smarter strategy by another (the Prius as part of a balanced lineup that includes everything from sippers to guzzlers), to me, all that signals is that the US Big 3 are perhaps in worse shape than anyone is currently publicly admitting.

    My best friend told me about an exchange on CNBC(?) yesterday, where the talking head asked what price Daimler ought to ask for Chrysler, and the analyst shot back "zero". As in, they'll be lucky to find a suitor to take over the liabilities of the company. Sounded a little flip, but maybe the guy was right. If so, it makes you wonder where Ford and GM will be in another year, and whether the WSJ was helpfully lining up the excuses in preparation for whatever comes next.

    More fundamentally, you can see how failure of the Big 3 (2?)would be hugely threatening to the WSJ. While of course the WSJ has to point to the pension/health overhang (which is real, no doubting that, but was just as real when GM made record profits in 1997 as it is now), what they can't point to is the thing I fear the most: that US companies, driven by quarterly profits statements, are unable to engage in adequate long-run planning (or, if you will, insurance). So, if guzzlers were the most profitable line in 1997 (which I believe was the year GM made it's all-time record profit), then management was burdened to directing resources to maximize current-year profits -- focus on guzzlers only. And therefore to kill off anything else, say, electric cars and such nonsense.

    In other words, short-term investors lead to short-term thinking, that's what I fear is the problem. I wouldn't blame Big 3 management for doing what the stock market demanded that they do. Big 3 management would not have been allowed to develop gas-sippers that would have been un- or less-profitable, back in the 1990s, if the alternative was to push more guzzlers that earned more current-quarter profits.

    That's why they are playing catch-up today, if they are playing at all. That's what the market asks them to do. If gas-sippers are more profitable today, that's what they need to turn to now. I mean, first GM kills an electric car, now they're resurrecting a different electric car. Does that sound like maybe they have an inappropiately short planning horizon? Well, if they do, it's because investors demand that they have a short planning horizon. Electric cars were unprofitable then and must be killed. Electric cars may be profitable now and must be pursued. Believe it or not, at some level that's a totally consistent approach to building cars -- consistent with a focus on short-term profitability. The flip-flop was not floundering, both choices were seemingly rational at the time they were made.

    Anyway, that's what I see as the gist of the article: that the Big 3's consistently short-term focus was and is right, and Toyota's longer-term focus was "luck". I fundamentally disagree with that. Worse, I believe that Big 3 management has no choice but to adopt a short-term focus, as a reflection of investors' short-term focus. That's what the WSJ cannot say. Hence, companies that adopted a more balanced, longer-term view must be judged lucky, not savvy.
     
  18. malorn

    malorn Senior Member

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    <div class='quotetop'>QUOTE(DaveG @ Feb 22 2007, 02:02 AM) [snapback]394421[/snapback]</div>
    I agree with you to a certain extent. The problems with legacy costs and the Japanese government purposely manipulating the yen to benefit Japanese exporters are not the fault of the Detroit Three.
     
  19. hill

    hill High Fiber Member

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    <div class='quotetop'>QUOTE(priusenvy @ Feb 21 2007, 09:27 PM) [snapback]394296[/snapback]</div>
    What a white wash. This WSJ editorializer has his head up his poop shute, with no clue why the big 3's costs are up. Legacy / health care costs? Heath costs are high because the insurance industry runs the world. Don't EVEN try to cross them. Don't EVEN try to get elected if they don't support you. When someone / some organization grows a sack, and successfully takes them on, costs will come back to earth. Meanwhile, their perverted system keeps negligent MD's in the system, and passes the cost of THEIR mistakes onto ALL MD's malpractice policies, which of course have to be passed on to you and I. It's a rare occasion when a negligent MD is thrown out. Then, in some cases, (s)he can simply move to another state & do it all over again.
     
  20. dbermanmd

    dbermanmd New Member

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    <div class='quotetop'>QUOTE(malorn @ Feb 22 2007, 10:06 AM) [snapback]394475[/snapback]</div>
    Yet there are American industries that enjoy benefits as they relate to currency valuations - I am sure Boeing loves competing against Airbus (dollar vs. euro) - is our government artificially controlling the valuation of the dollar to advantage Boeing or any other American company competing against european based firms?

    Legacy costs will also affect Toyota and the other foreign car makers that produce cars and parts here. Their first factories were built about 20 years ago - so those costs will even out to some degree over time.

    There are other differences too - advertising/incentives - i believe the big 3 spend more per car trying to sell them than their Japanese counterparts - probably due to market forces and governmental policies.

    The big 3 also have much higher labor costs - try comparing union vs non-union labor and then add in the rules the unions force on the big 3 that do not get forced down the throat of the non-unionized factories.

    my bias - i do not buy union made products if i can avoid it. that is why none of my five cars is American - and it will be a long time b4 i even walk into one of their showrooms.