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Originally Posted by MGBGT
......Frankly I find the continuing apologism of other automakers disappointing, if not pathetic. I hear lots of arguments that hybrid technology is too expensive and does not make economic sense. At the same time, other automakers state that they cannot compete with companies such as Toyota that can throw so much money at developing such economically non-sensible technology. In my mind, all that says is that other automakers have not only missed the boat on this functional and practical technology, they must also being doing lots of additional stuff wrong, if they can't make enough profit even with the huge profit margins of SUVs, and without selling money losing hybrids, to develop future technologies. If hybrid technology is money losing to manufacturers, I would expect Toyota to post a loss and GM a profit. So what gives? .....
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From a consumer stand point and a logical stand point, this is certainly true. Problem is, international business is not always logical. There are several significant advantages that Toyota and Honda have in dealings / subsidies with the Japanese governments, protectionist trade policies and tariff policies in Japan that minimize imports from Europe & US automakers, and lack of requirement to support legacy costs that GM, Ford, and DCX have to deal with. None of these things does or should matter to the consumer, so you rarely hear the Big 3 whine about them. It wouldn't get 'em anywhere. Doesn't mean they don't exist.
If the US government treated Toyota the way the Japanese government treats the Big 3, Toyota would not have a significant presence in the North American market.
The legacy cost issue is a different issue and one that Toyota, and Honda to a lesser degree, are wise to take advantage of. Because the Big 3 have been operating in the US for far longer than Toyota or Honda, they are operating with an older average workforce and a much larger retiree base. Actually, I'd be surprised if Toyota has very many US retirees at all. With retirees come pensions, which must be fully funded and insured, and health benefits, which your local news will tell you have been spiraling out of control for the past 5 - 10 years. The soundbite number is that domestic automakers have to allocate $1,500 for every vehicle built to cover employee and retiree health care costs. In other words, if GM, Ford and Toyota all sold the same type vehicle at the same price, Toyota would get to put an additional $1,500, maybe a little less, in their pockets as compared to Ford and GM. That's just health care. I don't have a good number for the pension cost per vehicle. Toyota and Honda get to keep more of their operating profit per car sold than do the Big 3. That's just reality and it has
NOTHING to do with the quality of the product or the quality of decision making by any of the companies involved. It's just a factor of the cost of doing bidness in the US of A.
Peace,
James
btw - I think we have history of similar types of industry dynamics in the television manufacturing industry and the steel manufacturing industry. The steel manufacturing industry also suffered from US companies being slower to react to known manufacturing efficiency gaps. Not sure if that was the case with televisions, but maybe someone familiar with RCA, Zenith, or Curtis Mathis can provide some clarity.