By on October 1, 2010

Even the most casual of TTAC readers will have noticed that we frequently feature stories about the strength of the Chinese economy and the increasing importance that China has to automakers everywhere. This afternoon I was actually standing on the factory floor of a noted “transplant” automaker and I found myself wondering: Is it too late for the United States to follow the “Chinese way” to create more opportunities for domestic vehicle production?

WARNING: Do not read any further if you are easily enraged by protectionism…

The factory I was standing in this afternoon was built by government intervention just as much as it was built by Ohio construction workers or a Japanese board of directors. In 1981 the United States Government bullied Japan into accepting a “cap” of 1.68 million Japanese-built cars into the United States annually. This program persisted, in one form or another, until 1994. Don’t confuse this with the “chicken tax” which applies to imported trucks, by the way.

The short-term impact of this agreement was to constrain the supply of popular Japanese cars. The “Additional Dealer Profit” sticker became common at Honda, Nissan, and Toyota dealerships. Subaru and Mitsubishi, neither of which sold terribly competitive vehicles at the time, found their fortunes buoyed by the plain fact that they were permitted to bring in some Japanese cars and that buyers who couldn’t afford the Honda ADP (which was often 20% of sticker or more) went to their local Subaru or Mitsubishi dealer instead. This is plain supply and demand, and in this case it worked just like it works in the Economics 101 textbooks which, to my knowledge, have never been perused by the average Internet car-forum reader.

The Big Three Japanese automakers had already planned some United States auto production due to concerns about the yen’s increasing strength, but the VRA forced their hand and pretty soon everybody who could afford to build a US plant had done so. Today, foreign-owned, US-located automobile plants produce as much as two-thirds of the “import cars” sold in this country. Even if you don’t like “big government” or economic interventionism, it’s hard not to agree that:

a) Domestic automakers were going to lose that market share anyway, so
b) They might as well lose it to companies which at least assemble in the United States.

Meanwhile, Ford, GM, and Chrysler have fled to Canada and Mexico. General Motors, in particular, seems to be on a crusade to have as much of each car as possible built in China. And speaking of China… only a very optimistic person would expect that China will not eventually enter the United States market with cars that meet the needs of buyers. This could create a situation where even the “foreign” automakers are forced to move production to China, the same way that the computer business became almost exclusively Chinese once Michael Dell started that particular race to the bottom.

What to do?

My solution, offered up for discussion, is an annual foreign VIN auction. It works like so:

Every year, the United States Government will auction off a fixed number of “foreign” VINs, without which an automobile may not be legally operated on most public roads. Any automobile with a final assembly point outside the United States, or any automobile with a domestic content percentage below (pick your favorite number here, perhaps 75%) must obtain a VIN from the auction in order to be sold in this country.

Automakers will submit sealed bids for the number of VINs they wish to purchase. So… for a mini-example, let’s say that:

  • Bugatti bids $10,000 for 1000 VINs
  • Porsche bids $3,000 for 15,000 VINs
  • Ford bids $1,200 for 300,000 VINs
  • Hyundai bids $1,000 for 200,000 VINs
  • Toyota bids $500 for 500,000 VINs

If the “cap” is 500,000 VINs (which it obviously would not be):

  • Bugatti gets all their VINs and pays $10M
  • Porsche gets all their VINs and pays $45M
  • Ford gets all their VINs and pays $360M
  • Hyundai gets 184,000 VINs and pays $184M
  • Toyota gets none.

The real math would be considerably more complicated. However, this scheme would do a few things:

  • Exotic cars would be unaffected in real terms
  • It would introduce a balancing cost to offset the cost savings of building cars in countries which practice currency manipulation or where the daily wage is below certain standards
  • It would help balance some of the costs of conforming to United States environmental regulations, thus helping the air and water stay cleaner in the long run
  • It would encourage automakers to build cars where they are sold without the draconian “50:50″ regulation of China’s market
  • It would encourage domestic manufacturers to produce cars domestically

What would the government do with the money? The same thing it always does: waste it. Who cares what they do with it? My suggestion: use it to fund unemployment benefits. The purpose isn’t to give the government more money. Instead, we want to do what the VRA did in 1981: encourage people to build cars here in the United States, where manufacturing jobs are kind of scarce.

There are certainly some objections to my evil plan. I have helpfully demolished them below.

This just raises the cost of cars for the consumer! In the short term, yes. In the long run, it increases the chances of the consumer having a job. Henry Ford, robots, you know the drill.

Other nations will retaliate with their own trade sanctions! What are we selling, as a nation, to other countries? Airplanes, motor vehicles (most of which are made by transplant automakers), industrial chemicals, and food. How much of it are we selling? Not a lot. The value of just the automobiles, automobile parts, and electronic devices we import from other nations is greater than our total exports. In other words: So. Freakin’. What.

What about NAFTA? Amend it, wipe it out, whatever. I don’t see what NAFTA has done for the United States. I thought it would lead to cheap Mexican weed, but I am told by the people who consume such plants that all the Mexican stuff is “schwag” and the “chronic” comes from good old American hydroponic facilities.

I don’t want my car made by American workers. I do web design in Sausalito for a living and I am engaged in a personal Kulturkampf against the American working class, to which I feel superior, and that includes my parents, who were factory laborers who gave up their retirement to send me to UC. Please feel free to walk into the ocean and not come back.

Any questions?

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68 Comments on “A Modest Proposal: Balance Trade By Auctioning VINs...”


  • avatar
    mcs

    How do you define final assembly? Can I set up a warehouse at the docks and have workers perform final assembly by installing the spare in the trunk?

  • avatar
    Educator(of teachers)Dan

    Interesting, Jack.  Reading your article gives me the desire to go back and re-read PJ O’rourke’s book, “Eat The Rich.”  – Your money does not cause my poverty. Refusal to believe this is at the bottom of most bad economic thinking.
     
    Your idea is so crazy it might work.  I also remember many of my neighbors growing up proudly buying built in Ohio Honda Accords.

    • 0 avatar
      psarhjinian

      You know, I think O’Rourke is a pompous, callous jackass and that his views are borderline poison, but even I think that book should be required reading for anyone, right or left, who can’t seem to get a handle on what “Socialism” really is.

    • 0 avatar
      Educator(of teachers)Dan

      Sometimes after you stop laughing, you realize he’s telling the truth.

  • avatar
    86er

    Oh Jack, everybody knows that the best weed comes from British Columbia.

  • avatar
    bumpy ii

    “My solution, offered up for discussion, is an annual foreign VIN auction.”

    And what exactly is the problem that this solution is searching for?

    • 0 avatar
      psarhjinian

      Trade imbalance.
       
      Actually, no, considering automobilia isn’t a big part of the trade imbalance, it’s pure optics, but the impact would be interesting.

  • avatar
    psarhjinian

    This just raises the cost of cars for the consumer! In the short term, yes. In the long run, it increases the chances of the consumer having a job. Henry Ford, robots, you know the drill.
     
    This is actually very true, and it would be a good idea to stop middle-class, uneducated jobs from eroding before the market “corrects” itself.  Poor, uneducated people have a tendency to force really unpleasant /a> market corrections.
     
    Ask me if I’d shed a tear if more people made UAW wages and upper management and the richer shareholders had to settle for 1950s-level compensation.
     
    Other nations will retaliate with their own trade sanctions! What are we selling, as a nation, to other countries? Airplanes, motor vehicles (most of which are made by transplant automakers), industrial chemicals, and food. How much of it are we selling? Not a lot. The value of just the automobiles, automobile parts, and electronic devices we import from other nations is greater than our total exports. In other words: So. Freakin’. What.
     
    The problem is that the US signed agreements about trade, and that a very important part of the US economy—intellectual property rights—would probably lose protection in a full-scale trade war.
     
    Ask me if I’d feel bad for Hollywood or Microsoft.  :)
     
    What about NAFTA? Amend it, wipe it out, whatever. I don’t see what NAFTA has done for the United States. I thought it would lead to cheap Mexican weed, but I am told by the people who consume such plants that all the Mexican stuff is “schwag” and the “chronic” comes from good old American hydroponic facilities.

    First off, Canadian weed is better, or so I’ve been told.
     
    Second, your largest trading partner is Canada, not Mexico.  As much fun as it is to pick on poor brown people instead of rich white ones, the NAFTA agreement has actually worked in the US’ favour in relations with Canada, so you may want to think about that one for a bit.
     
    But tell you what: we’ll shut off the flow of weed, speed and lesbian porn if you guys stop shipping us enough handguns to murder ourselves other ten times over.  Deal?

    • 0 avatar
      michal1980

      Ahh so some american jobs are better then others? Pot head alcholics that put togther Jeeps need their jobs protected. Hollywood types / geeks behind pc’s, screw them.

      please educate yourself on how much america, and what america actually exports before push everyone under the bus, for the sake of the UAW

    • 0 avatar
      Norma

      Jack, not going to happen bc GM, Ford, C all assemble huge number of vehicles outside the U.S. A, Doing what you propose would be carmageddon II.

      Psarhjinian, once NAFTA is “wiped” out, access to Canadian oil (the largest oil exporter to the U.S. is not Mexico, not Venezuela, or Saudi Arabia) and other resources like water can be seriously in jeopardy.

      Jack, it’s like shooting at BOTH of your feet. Well done. Better at concentrating at what you do best, dream BIG.

  • avatar
    mikey

    Wipe out NAFTA Eh? Hmmmm lets see we got Toyota,GM,Ford,Honda and a Chrysler plant here in Ontario. As a retired GM Shipper Receiver we unloaded a lot of trucks from the US. I’m pretty sure the other car companies were doing the same.  So Jack your plan might need some tweaking.

    Now of course there is the small matter of us sitting on the second largest supply of oil in the world. On the other hand,we need American technolgy,and cash to get it out of the sand. Then we have that oil sands/ tree hugger problem.

     Man this is too complicated for me. Great idea Jack, run with it.

  • avatar
    bunkie

    “And what exactly is the problem that this solution is searching for?”

    Your very question illustrates the real depth of the problem.

    In my opinion, one of the most powerful ideas in American culture is the deeply-held belief that we are all just one good idea/invention/investment away from being the next Bill Gates. On the surface, this is a major source of our dynamism. However, the real truth is that it’s something of a lottery mentality that has been seriously abused by people with far too much money who wish to maintain the low-tax, no-consequences status quo.

    It’s best illustrated by the question of the expiration of the Bush tax cuts. The argument for the continuation thereof is that allowing them to expire will kill investment and job creation. This is a very powerful idea. Unfortunately, during the life of those tax cuts, we have had a massive net loss of jobs. Yet many, many people who would not be directly affected in the slightest buy this disproven idea. I keep coming back to that ancient Roman question, Who Benefits? Hint: Not the guy whose job went overseas.

    Think of it as a toll. Want to take the bridge? Pay the toll. Want access to the US market? Pay for the privilege. Free trade is a noble idea. But when your trading partners have all the advantages and rig the game against you, you’re a fool to keep playing with the same strategy. And you know what they say about fools and their money…

    • 0 avatar
      MikeAR

      Bunkie, You’re a little bit oversimplifying there. Is there a direct cause-effect realtionship tax cuts equal job losses? I really don’t think so. If you don’t like tax cuts feel free to pay more. You can, in fact pay it all or more likely the case, try paying some taxes for a change and see how you like it.

    • 0 avatar

      If I follow your logic, the best thing you can do is to let your dollar devalue.  Make exports less expensive and imports more expensive by making the US dollar have less buying power.  This will automatically make US goods more competitive both locally and abroad.
      Canada’s had an appreciating dollar the last few years, and yet our economy has done better and better… how could that be?

    • 0 avatar
      bunkie

      MikeAr,

      I’m not saying that the tax cuts caused job losses (that’s actually an instance of correlation, not causation). I’m saying that the number one argument for the tax cuts (job creation) has been proven to be completely false, yet people still believe it.

      It’s the stuff that goes along with the sort of blindness to this sort of fallacy that causes job losses, one-sided “free” trade being just one example.

      “try paying some taxes for a change and see how you like it.”

      I’m guessing that there’s a good chance that I pay more taxes than you do, possibly a lot more (I make well above the median salary and live in NYC where I pay over 11% in state and local taxes). I have no problem with it. I consider it my responsibility as a citizen of this country. This country has been very good to me and, unlike an awful lot of whiney rich people, I don’t consider taxation to be theft.

    • 0 avatar
      MikeAR

      Accepted, with an exception, tax cuts aren’t aimed at job creation. They are, or should be done to give taxpayers more money. If that leads to job creation great. If not people still have more money and there is nothing bad about that.

    • 0 avatar
      darkwing

      bunkie,
      When my disposable income rises, I save more, invest more, *and* spend more. “Completely false” indeed. Reality once again dares to disagree with your political betters.
      “well above the median salary” — oh, please. The median national salary is so low that “well above” still puts you comfortably in the middle class. Start pulling in $300K+ and then we’ll talk.

    • 0 avatar
      bunkie

      “Start pulling in $300K+ and then we’ll talk.”

      So I guess you finally made partner at Dewey, Cheatham and Howe…

    • 0 avatar
      darkwing

      I never said I did; I said you don’t. Project much?

    • 0 avatar
      M 1

      Bunkie, I’m guessing there is an excellent chance you don’t pay anything close to my tax liability, and I’m here to tell you that my company nixed plans to hire more people precisely because of the income tax and healthcare tax shenanigans that are coming down the pipeline.
       
      I don’t care about when you finally start making $300K, but call me when you employ people out of your own pocket, and then your opinion will carry some weight with me. Until then, you’re literally just pretending to know what you’re talking about.

  • avatar

    This would encourage the import of expensive cars but would badly affect the market for compact cars.  GM for years has refused to make a car that’s competitive with the Honda Fit,  Toyota Corolla,  Hyundai Elantra,  etc.  Dodge makes these big puffy monstrosities that are beneath contempt.  Ok,  Ford’s got something cool w/ the Fiesta,  but you get the point…

  • avatar
    cmus

    Obviously, the devil’s in the details.  However, I really like this idea.  I dislike that we (the US) has gotten away from “making anything”, going to a primarily service economy.  This sort of shift has, historically, never worked out very well for the shifter.

    But, hey…I’d be a fan, to some extent, for pretty much any plan that resulted in manufacturing jobs coming back to the US instead of departing.

    Even on an individual level, consuming-more-than-you-produce is bad for your long term financial prospects.

    • 0 avatar
      charly

      Simply not true. Under normal circumstances, aka not the last 10 years, is buying a house good for your long term financial prospects but if you do that you consume more than you produce until you have paid it off

  • avatar

    Canada might have something to say about this.  Don’t forget that Canada imports about a quarter of all US exports.  We may be small, but we are a mighty economic partner.  Our countries are heavily dependent on each other economically.
    Protectionism is great, until you remember that your economic neighbours can and will respond in kind.  Ultimately, at the end of the day, we end up supporting local production through an effective subsidy and we dilute competition.  American car makers won’t need to make as good a car if they don’t have to compete as much with foreign automakers.
    China may have lower wages than the US does, and this might be perceived as an unfair advantage, but Japan and Germany have higher wages – yet they manage to do fine.  Clearly, wages alone are not why US automakers have suffered issues with competitiveness.

    • 0 avatar
      Chicago Dude

      If we expand this to include the NAFTA zone and amend the TN profession list to include automobile assembly, that takes care of any US-Canada-Mexico problems.

  • avatar
    Zackman

    Why limit this only to automobiles? (Yes, I know – this is TTAC) Expand this to televisions, consumer electronics (cameras, computers, stereos), appliances and everything else no longer or seldom made here. Manufacturing stuff here that people actually buy here makes sense to me, even if the standard of living isn’t at the level of, say, 20 years ago. At least people would be gainfully employed making things. Just a thought!

  • avatar
    Russycle

    Where do I get my “Baruth for Trade Minister” bumper sticker?

    • 0 avatar
      Educator(of teachers)Dan

      In the US I believe the sticker should say, “Baruth for Senate” because according to Article 1 of the Constitution, Congress regulates international and interstate trade.

  • avatar

    Why so complicated? Just do it the Chinese way:
    Everybody who wants to build a car must join a JV with U,S. automakers.
    Think about it …..
    Two of the three U.S. automakers are owned by whom?
    Of course, Ford and Opel Europe immediately will have to enter JVs with Volkswagen and a resurrected Borgward.

  • avatar
    jpcavanaugh

    Jack, I love your articles on driving, car sales, road tests and other subjects.  I like to think that this gets filed under Provocative Articles to Bring Lots of Views & Comments.  I hope so, because it is a bad idea on its merits.
    First, understand that the law of unintended consequences will have a field day with this one.  As a matter of practicality, this will be a failure.  When the government sets quotas for VINs, it guarantees a shortage of some vehicles and a surplus of others.  The markets get whacked with all kinds of artificially created distortions which cost lots of people lots of time and money in unexpected ways.
    Second, the government has no business with its hand on this lever.  It is true that the USA does not manufacture as much as it did.  This is largely (thought not totally) because the USA has become a very high cost place to do business.  Tax rates (on corporations, particularly), regulations, wage costs, benefits costs, and other costs combine to make the US not as attractive as it once was.  But starting a trade war only invites retaliations by others, which makes everyone poorer.
    Bad idea. Address the causes, not the symptoms.

    • 0 avatar
      charly

      Tax rates and wage were in the past much higher compared to other regions but the USA wasn’t unattractive to invest in then. There are three big problems with the USA.
      To much regulation by the courts and not enough by the government
      Not enough invested in civil society. aka roads, healthcare & schools
      An ideology that is not compatible with reality

  • avatar
    grzydj

    I’m impressed that you didn’t get all redundant and use the term VIN number.

  • avatar
    obbop

    “I thought it would lead to cheap Mexican weed”
     
    How quickly they forget the “paraquat scare.”
    Or are too young to be aware of that pivotal period.
    Forget that Baby Boomer/Generation Jones/ Gen X,Y,Z and any possible alpha/numeric iterations…..
    just divide the epoch into the “Hey, wanna’ buy a lid?  and the “Hey, wanna’ buy an eighth of an oz” periods.
    Or not.
    I don’t really care.
    Just keep the dumpsters stocked with incredible edibles.
     
     

  • avatar
    ClutchCarGo

    I’m no trade law expert but I’m pretty sure that this idea would violate WTO rules. Even if it doesn’t, retaliatory action from China would surely result, and while we may not export as much manufactured goods as we import, we do export a lot of services and agricultural goods that could be targeted. How’s that tire tariff working out for domestic mfrs?

  • avatar
    Stingray

    Mr. Baruth, having followed the local policy (or lack of) for the automotive industry, and I have read each of the Gacetas for the past 3 years, I’d like to say:

    You  VIN “auction” is no such. It’s an import quota set by the government (VINs cap) and how much of it the manufacturers/importer get are based on how much $$$ they place in the bid. You should also allow the selling between them of remaining “VINs” in case they can’t be used completely. In any case, ALL of them are going to cry foul.

    Level of content, I think at 75% it may qualify as a “domestic” product. But that 75% must be disclosed if it is by parts count or $$$ value. They’re not the same.
    You could favor some MPG or emissions target the government has. A plus. For example, here it is requested that 40% of the total production to be bi-fuel cars. To ease it a bit, only 2 models are required to participate.

    Which production method you want to promote with this: SKD, CKD or manufacturing. Which option is best depends on the volume. Then you have to define the level of assembly on SKD (to prevent what is mentioned in the 1st comment).

    Does your government have the cojones/competence to push something like this forward? Do they have an expert team that will define an automotive policy for your country? Do the US have an automotive policy? Ours don’t have an expert team, they defined the policy (and thanks to our helps is way better now)

    Why you don’t propose higher tariffs on imports? And voila you’ll see how they start thinking about manufacturing in the US.
     
    Or do as herr Schmitt said
     
     

  • avatar
    ihatetrees

    It would encourage domestic manufacturers to produce cars domestically

    Append “in lower cost, right-to-work states.” to the above, and I’d agree.

    I am told by the people who consume such plants that all the Mexican stuff is “schwag” and the “chronic” comes from good old American hydroponic facilities.

    Even that’s been lost to imports. I’ve heard our Canadian friends (especially out west in BC) are  current hippie lettuce kings.

  • avatar
    oboylepr

    For the sake of the discussion, let us say the US does this and it sort of works or at least makes the politicians look like thet are doing something for American manufacturing. Let us also say that the US’s NAFTA ‘partners’ and the WTO somehow keep quiet. Apart from the fact that more Americans will have to make do with D3 crapmobiles, what is to stop every other manufacturing sector from following suit? What if an attempt was made to bring back US jobs in consumer electronics? Followed by aerospace, computers, furniture, building materials, clothing. Follow that with imported resources such as oil, lumber, steel, natural gas etc. The service industry could have a go at it then. The US could find itself suddenly importing nuclear warheads which were not ordered and starting arriving without the required packing slips and customs paperwork! In other words a trade war of spectacular proportions would be triggered which might be contained within trade or might not. Sorry jack, it’s intreresting discussion fodder but a bad idea all around.

  • avatar

    The US Auto industry appears to be worth about $550 billion (new car sales, parts, and service):
    http://www.plunkettresearch.com/Industries/AutomobilesTrucks/AutomobilesandTrucksStatistics/tabid/90/Default.aspx
    The US’ exports are about $1800 billion:
    http://en.wikipedia.org/wiki/Economy_of_the_United_States#International_trade
    You might miss that money if you start a world wide trade war.
    This isn’t the worst economic idea I’ve ever heard, but it’s pretty bad.
    There’s no joy, future, or much money in competing with Chinese workers for the cheapest assembly of manufactured goods. The US is a strong economy in the services sector, which is everything from jobs at McDonald’s to (surprise!) being the designers of so much of that manufactured-in-China stuff (which includes, BTW, stuff like iPods and a whole lot of the other consumer electronics you were so willing to throw under the bus. Did HP become a German company while I wasn’t looking? Did Intel’s US fabs get moved to Mexico? Who will they sell those expensive processed-silicon wafers to once you’ve thrown the international trade in electronic consume goods under the bus?)

  • avatar
    CliffG

    Ah yes, for every problem there is a solution that is simple…and wrong*.  It is a violation of the WTO.  And NAFTA.  But, we are a sovereign country, we are are free to drop out/amend trade agreements anytime we wish.  China routinely runs rough shod over the WTO, and gets away with it.   We have the minor detail of pretending to be a law/treaty abiding country, but we’ve ignored that before, might as well do it again.  I am sure there are no consequences for arbitrarily reneging on a panoply of trade agreements.

    Received wisdom on the import quotas of the 1980′s is that they spurred the Japanese into building larger and fancier cars much more quickly than they otherwise might have.  If you can only import 100,000 cars, will you import small little compact jobbies, or maybe move up market?
    Trade is a zero sum game, you take our products – we take your cash.  So, if we deprive China of our cash for all those toasters, who buys our Treasury bonds?  Before we start running up those trade barriers we better hope our debt and deficits go away.  Incidentally, the previous administration and the current one are ecstatic over currency devaluation presuming at some point they can snap their fingers and fix it if the devaluing goes into a free fall. Er.
    The problem of manufacturing employment in this country is fairly simply:  We are a lot more efficient these days.  GM manufactures almost as many cars today as they did in the early ’70s, with 1/10th the labor force.  Those jobs are NEVER coming back.  (Fixed, sorry.) Manufacturing has been declining for a long time, but the 1950′s aren’t coming back.   There are a lot of things that have led to the decline of manufacturing, but somebody will pay for those import excise taxes, and it won’t be the importers.
    Your presumption of increased auto mfr. employment in this country stemming from a form of import excise tax is based on #1 – a lonely fascination with the wonders of mercantilism and #2 – a misunderstanding of why Japan came to the US.  Probably the cleanest import excise tax idea I’ve seen though, so kudos for that.
    *RR
     
     

  • avatar

    What about NAFTA? Amend it, wipe it out, whatever. I don’t see what NAFTA has done for the United States. I thought it would lead to cheap Mexican weed, but I am told by the people who consume such plants that all the Mexican stuff is “schwag” and the “chronic” comes from good old American hydroponic facilities.
     
    It’s possible that the marijuana grown within the city limits of Detroit may exceed the value of the cars that are assembled there. Grow houses are about the only viable businesses left in the city.

  • avatar
    michal1980

    Wow just wow. Jack got caputered by some union thug. UAW pay for this drival piece? Or Jack just working for his weekly paycheck. How about instead of protecting old school industries that are getting more and more automated, with a need for fewer and fewer workers. So you are going to increase costs for the entire country to provide a benefit to whom? a growing miniority?
    Manufacturing is growing scare in the unitied states because the work force is getting TO EXPENSIVE. Your solution is to make the problem worse. The world isn’t what it was 30-40 years ago.
    Jack is sticking his head in the sand, dreaming of the good old days, while chocking on the sand.
    Theres more to be said, but free & freer trade is a good thing. Going backwards, well, thats just stupid.

    OH wait, trade wars were covers here before:
    http://www.thetruthaboutcars.com/trade-war-watch-15-thai-tires-trump-chinese/

    • 0 avatar
      michal1980

      PS protectionism allowed the junk that GM made in the 1970′s 80′s and 90′s to go happen. Why? Well because if you wanted a car at 10k, you could buy the POS a UAW worker made. Want the same size in an import? Well pony up the cash.

      Again, idea reaks of stupid. Then again, I’m not surprised because of who propsing it.

    • 0 avatar
      psarhjinian

      Manufacturing is growing scare in the unitied states because the work force is getting TO EXPENSIVE.

      Why is this a problem?  An expensive workforce is a well-paid one, and one with economic clout that’s able to drive an economy and avoid poverty-based crime on a large scale.  Chasing the least-cost workforce ensures a race to the bottom that erodes the economy of whatever country it touches until everywhere is a cesspit.

      There’s a happy middle ground in there, somewhere between self-destruction and Leninist five-year plans.

    • 0 avatar
      Jack Baruth

      “Again, idea reaks of stupid.”
       
      Thank you for this. I wasn’t having a very cheerful day until I read this sentence. :)

    • 0 avatar
      psarhjinian

      Well because if you wanted a car at 10k, you could buy the POS a UAW worker made

      Let’s be fair, here.  The workers were not the reason GM et al couldn’t design a decent car for a quarter-century or more.  I’ll believe that, at the start of the 70s, workers had the ability to affect the quality of product, but from 1985 onward that really wasn’t the case.

      Union workers didn’t spec poor materials, make egregiously bad design decisions or screw customers on warranty claims.  All they did was bolt the thing together.

      Hell, for the better part of the last decade, GM had lower operating expenses than Toyota on a per-unit basis.  The problem wasn’t cost: it was that they couldn’t sell the product for a reasonable price and had to put three times the incentives on the hood.

  • avatar
    Jack Baruth

    I’m guessing from some of the responses that not everybody had to take English-language literature classes at any point in their lives.
    http://en.wikipedia.org/wiki/A_Modest_Proposal
    With that said, I would suggest that the current program adopted by the American people and government of doing nothing while every job in the country has either departed or is scheduled to depart for places where human rights, the environment, and fair trade are mere phrases in someone’s mouth — well, that hasn’t done too well, either.
     

    • 0 avatar
      86er

      In fairness, they never had weed in Jonathon Swift’s time.  :)

    • 0 avatar
      bumpy ii

      Well yeah, you did forget to include a line telling your detractors to eat their imports.
       
      Not all jobs have left; just the Hobbesian ones. It’s a sensible arbitrage: use other people’s resources when they’re cheap and use your own when they’re expensive.

    • 0 avatar
      michal1980

      oh please EVERY job has left the country?

      Again did you look up usa exports. since you like Wikipedia

      http://en.wikipedia.org/wiki/List_of_countries_by_exports

      see country number 3 on that list:

      USA.

  • avatar
    blowfish

    The serial number  S= Shadow
    R=Rolls
    K= yrs it was made,
    we used to have a SRX 2340 this number looks much newer body.
    when i get home I can look up more.
     
     

  • avatar
    blowfish

    My late Uncle used to have a 26265 his car was a 75 and this is 36330  made in 78
    a 10065 cars difference.
    They made about 3,300 cars a yr. Back then was considered a real small car production co.
    Slowly had to cohoots with BMW in R&D, they did some of the variable valve timing research together.

  • avatar
    turbosaab

    Protectionism doesn’t work (and it’s morally wrong, to boot)
    If you don’t believe it, a good place to start is Cafe Hayek

  • avatar
    ajla

    I tend to think that if Americans really deeply cared about saving auto jobs then they would only purchase vehicles from a domestic factory. It seems that only current or retired auto employees care much.  And even then they’ll be okay buying a Mexican built Ford/Chevy and saying “the profits come back to the US.”
     
    I’m not at all trying to be a smartass here, but even the author of this article doesn’t seem to go out of his way to purchase American built vehicles.

  • avatar
    Dynamic88

    “I don’t want my car made by American workers. I do web design in Sausalito for a living and I am engaged in a personal Kulturkampf against the American working class, to which I feel superior, and that includes my parents, who were factory laborers who gave up their retirement to send me to UC. Please feel free to walk into the ocean and not come back.”

    Love it.

    And I agree, doing nothing while adhering religiously to economic theory hasn’t been working for us.

  • avatar
    michal1980

    again this idea is stupid.

    P.S. Read up on american exports before claiming that America doesn’t export ‘anything’ or ‘little’.

    The USA is the 3rd largest exporter in the WORLD. 2x the size of the 4th biggest, and in the same ballpark of the top 3.

    In order to save 10 american jobs here, Jacks brain dead idea would kill tens of thosands from countires responding to our stupidty.

    Want to really kill exports? just do what Jack says.

    “psarhjinian

    Why is this a problem?  An expensive workforce is a well-paid one, and one with economic clout that’s able to drive an economy and avoid poverty-based crime on a large scale.  Chasing the least-cost workforce ensures a race to the bottom that erodes the economy of whatever country it touches until everywhere is a cesspit.”

    Really? Look at china. What happened there? free trade, + cheap labor = massive growth. What is all that growth leading to? Massive wealth, which leads to better wages, and higher demand for goods. Which equals a better standard of living, and more exports. Where is car growth occuring?
    China, GM sells tons of cars there, europe sales tons of cars there, japan sells tons as well. And the area is growing.

    Where does Jack want to send us? Backwards, lock down the forth raise the gates, sound the alarms. We ‘must’ protect the precious autoworker. WRONG. Just plan stupidly wrong.

    If you can find a worker to bolt togther a car for 10 bucks an hour vs 50. Then its stupid to protect the job of the guy being paid 50. Your just wasting 40 bucks an hour and getting close to no benefit to it.

    What other industires should be protect? The horse buggy makers?  What about telephone switch operators. Damn those people got replaced by computers and elctric devices. Think of all the jobs we would create if we had a bidding war on how many electric swithchboards big phone could use. After they run out, they have to go back to the old school way of doing things.

    Automatic street lights. DAMN, if we place a limit on those, we could have thosands, err hundred of thosands of new jobs for people flipping lights from green to red.

    expect we have to move forward. Some jobs are gone, and will gone forever. To look back and wish for the ‘good old days’ is stupid. And thats why Jacks idea is STUPID.

    Unless you want everyone to get paid 50 bucks an hour, but also have the entry level car cost 60,000 dollars so that you can feel good about it being ‘made in america’ by some pot smoking alcholic that can’t even wait until the shift is over to get there 50/hr fix.

    • 0 avatar
      Jack Baruth

      Some of your argument makes sense, despite your inability to spell or construct a sentence, but you fail to understand that, to some degree, “trade” with countries like China is a one-way gate. That “$10 an hour” guy never gets a chance to purchase an American product.
      Most economic theory is based on the idea of a two-way interaction. Money flows to China for labor and they use the money to buy things from us. The reality of it is that they manipulate the currency to acquire dollars which they then use to buy debt, which gives them political clout. They are playing a fifty-year gameplan and we’re thinking about the next quarterly report.

    • 0 avatar
      psarhjinian

      China is a one-way gate. That “$10 an hour” guy never gets a chance to purchase an American product.

      I would make a point that, once that Chinese fellow starts making $11, his job, in turn, is outsourced to Thailand, Indonesia, or what-have-you for $2 and hour.  This allows the Chinese fellow to buy cheaper goods for as long as he or she is gainfully employed.  But eventually the money leaves the Chinese economy as well.

      This is the “race to the bottom” part, and Jack’s right that it sees money flow only one way.  It doesn’t end with China, though: they’re just a stepping stone on the long road to ruin, and their growth won’t last.

    • 0 avatar
      michal1980

      So those 10 dollar chinese are not buying all those audi’s, bmw’s, porcshes etc etc?

      Some how the fact that those brands biggest growth area is chinese puts a big hole in your theory that they dont buy higher end, IMPORTED goods.

      As for the race to the bottom, yes there will be a race to the bottom, but remeber in the long runyou’ll run out of bottom. And just as we see in china as a middle class grows their demand for goods increases. This is a country that just a few short decadeds ago had very few cars, and a very small car market. And look now, its one of the largest automobile markets in the world and growing.

      The goal shouldn’t be to make the USA an island. We wont grow if we build walls around ourselves.  what we have to do is develop efficencys, lower cost of manufacturing here, so that we can export MORE out of the usa, to help pay for some of the goods we import.

      So china can make cheap shit better then us. So what? That just means that as an advance country we should work to educate our work force, and redevelop more vaule added goods.  Let someone else produce stuff thats ‘easy’ to make, and instead focus on things that are ‘harder’ to make.

      Yes that means that the ‘good old days’ of putting Tab A into slot B and making a ‘good’ living are over.  It but it doesn’t mean that we cannot work on new ‘Tab A and Bs’ that we can then send over to china.

      P.S. I acknowledge that we have a problem with china’s currency. But is the solution to one wrong , another wrong?

  • avatar
    Dr Strangelove

    I can relate to the sentiment that inspires proposals like this. However, if you start down the path of protectionism, you will only make your industries ever less competitive, and ever more dependent on protectionism, until you reach a stage where you can’t engage in any kind of free trade anymore.
     
    Instead of trying to pull up the bridges, the U.S. should have a good look in the mirror and try to diagnose the causes of their own lack of competitiveness, as compared to the handful of Western nations that continue to be successful as export-oriented industrial economies. Determine what the difference is between, say, the societies in Korea and Germany on the one hand, and the U.S. and the U.K. on the other.

    • 0 avatar
      Dr Strangelove

      ctd.
      Figure out which of those differences are crucial to economic success and start fixing things.
       
      The good news is that, if America can take off the blinkers, roll up the sleeves, and slaughter some of the sacred cows, it will again be in a terrific position to compete, with its huge home market, natural resources, accumulated capital, and strong traditions of innovation and entrepreneurial spirit.
       
      America can swing it, and everyone will be better off for it. And by se vay I’m not American, not rooting for se home team here.

  • avatar
    Dynamic88

    Figure out which of those differences are crucial to economic success and start fixing things.
    We can’t even do that.   We live in a time when people are entitled to their own opinions, and their own facts.     We’d never be able to agree on what is actually crucial to economic success.

  • avatar
    TomH

    Opening with a Brief History of VRA it’s hard to imagine coming up with the conclusion that a VIN Lottery is a good idea.  The 500K cap is a form of hyperbole (Yeah, I know you caveated it in the article, but it set up a completely unrealistic scenario, the number would be in the mid millions.) and ignores the historical foreign/domestic mix.  (Then again, given this administrations intentional ignorance of the US auto industry, you may be on track.)
    At a minimum you have to remember one of the key takeaways from the VRA experience: You can’t legislate against greed and stupidity.  (i.e. Do you really think the old Big 3 would have fared any better in the Vin Lotto scenario?)


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