By on September 24, 2013

1-milyonuncu-ford-transit-connect-kocaelinde

Fifty years ago, in a dispute over a German tariff on chicken imported from the United States, the U.S. government retaliated by slapping a 25% tax on imported trucks and vans, apparently to impact the then popular VW Bus. As sales of small trucks from Japan increased, the American automakers embraced the so-called Chicken Tax as a means of reducing competition. However, now that all three American based car companies sell vehicles that have been made outside the United States, the tariff has come back to haunt at least Ford. Automotive News reports that Ford is now appealing a ruling by U.S. Customs and Border Protection that the way the company imports the Transit Connect commercial vehicle makes it subject to the 25% tariff as opposed to the much smaller 2.5% duty charged on small passenger vans.

ford-transit-connect-3

 

For the past four years Ford has imported the Transit Connect from it’s Otosan, Turkey plant equipped as passenger vans, paying the lower tariff, but at a contractors facility in the Port of Baltimore before the vans are distributed to dealers the seats are removed (and saved to be offered as an option) and the window glass is replaced with sheet metal. The $23,420 Transit Connect, an economical alternative for a lot of service business and those in the building trades, has found a niche in North American and it would be significantly more expensive with the higher tariff added in. Ford saves thousands of dollars on every Transit Connect by avoiding the Chicken Tax, even after accounting for the cost of building them as passenger vans and then removing the same equipment.

In the Jan. 30 decision USC&BP told Ford, “It is clear that the Connect is a commercial vehicle first and foremost,” in a 13-page ruling, that importing it as a passenger van it “serves no manufacturing or commercial purpose” and that Ford’s process was nothing other than an attempt to “manipulate the tariff schedule.”

Transit Connects at the Port of Baltimore

Transit Connects at the Port of Baltimore

In saying that the company is appealing the ruling, a Ford spokesman said it contradicts previous decisions by the agency. Ford will continue to import the Transit Connects as it is currently doing and while the appeal process is underway it will be paying the higher tariff. Some Transit Connects are imported already equipped and sold as taxicabs so presumably those still qualify for the lower rate.

The redesigned 2014 Transit Connect will be launched at the end of this year and production will be moved to Ford’s Valencia, Spain operations from Turkey. That’s perhaps one reason why Ford has been lobbying the U.S. government in favor of a free-trade treaty with the EU, of which Turkey is not a full member. Concurrently, Ford is part of an effort by the American Automotive Policy Council, a trade group that represents the Detroit 3 to lobby Congress and U.S. trade negotiators to keep the chicken tax in place against Japanese automakers, saying it should not be phased out for another two or three decades, because of alleged non-tariff barriers to foreign car brands in Japan.

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154 Comments on “U.S. Customs Calls Ford’s Importing Transit Connect As Passenger Vehicle ‘Manipulation’ of Chicken Tax Tariff...”


  • avatar
    Big Al from Oz

    Here is a fitting story for this article, it came out today in a Sydney newspaper.

    Well, the chicken tax :-) What can I say.

    I believe in short term protection/subsidisation, but not long term. It distorts markets, creates unbalances and one day they will come unstuck.

    But the Big 3/UAW/Dems and GOP all had their finger in this pie. Now the US is that reliant on this tax it will take years to dismantle.

    One day you guys can have grey imports even. Or a modern midsize pickup.

    http://www.news.com.au/business/companies/end-of-the-road-for-the-volkswagen-kombi-as-brazil-ends-production/story-fnda1bsz-1226725611731

    • 0 avatar
      Vulpine

      It is very fitting considering how many people like to claim the “Chicken Tax” is having no effect on import trucks.

    • 0 avatar
      DenverMike

      Not that it doesn’t slightly inconvenience small trucks, but the 2.5% tariff “impacts” the import car market just as much. And where’s my Tatas?

      And why doesn’t anybody cry over all the crappy ‘world cars’ and SUVs we’re denied?

      • 0 avatar
        racer-esq.

        We get the big Tatas (i.e. LR and Jag), just not the little ones. Who wants little Tatas anyway.

      • 0 avatar
        niky

        I wouldn’t call thousands of dollars in extra cost a “slight” inconvenience. For those who have no manufacturing capacity in the US where they can reconvert converted cars, it’s effectively an uncrossable barrier.

        • 0 avatar
          DenverMike

          @niky – Where do you arrive at “1,000s of dollars”? The assembly line model makes what would be expensive ‘one off’ customization into a couple hundred dollars per vehicle, including the cost of wasted parts, initially installed. And I don’t see it taking more than minutes per Ford TC at a random dock warehouse, to complete the conversion. This link should help.

          online.wsj.com/article/SB125357990638429655.html

          • 0 avatar
            niky

            Read my post again:

            “For those who have no manufacturing capacity in the US where they can reconvert converted cars, it’s effectively an uncrossable barrier.”

            Ford has manufacturing capability. Hence they can minimize the cost of conversion. Other manufacturers do not, and will not want to add another factory simply to achieve niche sales in a country where they have no market penetration yet.

          • 0 avatar
            DenverMike

            @niky – What factory? Any random warehouse or covered area will do. These mods can be done on the tarmac, if necessary. Even Sprinter final assembly is a drivetrain plug-n-play. Not really the big deal you make it out to be. If an OEM can’t manage to make final assembly an easy, painless operation, they’re in the wrong business.

            They can call it what they want, but it’s hardly final assembly that’s a deal breaker, local or on foreign land.

            Surely it’s their ‘niche’ status and lack of market penetration that kills the deal. The US market is a hostile environment for niche automakers, foreign or domestic. But then every market is tough on niche OEMs, or even niche models by domestic OEMs. Fact of life. They may have to spend billions up front to meet safely/emissions. The payoff can be long term and years down the road, if at all.

            The key to mass production is the “mass” part.

            The Chicken tax may filter out weak products, but the 2.5% tax on import cars isn’t any different. But let’s see you name off meaningful markets, as free and open to trade as the US.

          • 0 avatar
            niky

            So you can put your “assembly line” into any covered area? Forgive me if I’m mistaken (as I’ve only ever been to several car manufacturing plants in my life), but even just finishing requires a site with individual workstations, quality control, final checking (including a water testing chamber, paint-checking and underchassis inspection area… still necessary if you’re making modifications to the body… we can drop the rolling road if that has been done elsewhere), parts storage, vehicle storage, logistics and etcetera. Put all of that in a warehouse and we have what you call a “factory”.

            You can do that in a garage if it’s just a dozen vehicles a month. If you’re looking at filling dealership orders across the US, you need a dedicated facility that can handle thousands a year… even for niche products.

            Again, not saying this is impossible (Ford does it for the Transit Connect), just that it is something a manufacturer with no production capability in the US will ever do, because it requires a production facility.

            “Niche” is tough. But we’re talking about a mass market product in which OEMs can leverage development and certification costs against foreign sales. They choose not to because of that final hurdle. Except for Nissan, of course. And again, Ford won’t do it because they’re afraid of cannibalizing F150 sales. (yes, I know we’re going back there again)

            Free and open to trade? What part of 25% punitive tariff is free and open? The US is like any other country, with its fair share of subsidies and market protection strategies. And every once in a while it enacts anti-dumping measures to curb cheap imports that threaten local markets (tires, for example).

            The US is a relatively easy partner to trade with. As long as you’re not stepping on anyone’s toes.

          • 0 avatar
            Pch101

            “What part of 25% punitive tariff is free and open?”

            It gets circumvented so that it isn’t necessary to pay it. It doesn’t really amount to anything close to 25% in the real world, because of the alternatives that are available.

            Using knockdown kits to “build” the van in NAFTA won’t add anything close to 25% to the cost.

            And given the nature of the US auto market, it probably won’t impact the price at all, as the automakers can’t completely ignore their competitors when setting their prices. Price competition from other vans will force the price point to remain fairly constant.

          • 0 avatar
            DenverMike

            @niky – You’re talking fully fledged assembly lines. Why? We’re talking mods that are much simpler than say a custom stereo system or alarm. Air tools plus 2 guys that know what they’re doing, may equal 5 minutes or less, per van. It can be done in a garage, parking lot, dirt lot behind the 7-Eleven… Or at the dealer itself. The filler panels likely come with the van, paint matched and ready to glue.

            And it’s not just the Ranger that would cannibalize. The Isuzu D-Max would cannibalize GM cars and trucks. The Hilux, would cannibalize Toyota cars and trucks. The BT50, Ford/Mazda cars and trucks. The Amarok, VW autos. The Triton, Mitsu autos. All the rest of the ‘globals’ than don’t conflict are pure junk.

            But why don’t you step up, represent and shed a tear for all the world’s crappy cars that can’t cut the mustard in the US market? By your logic, the US sets up all kind of trade barriers and tariffs for Russian, Turkish and Chinese cars.

            I didn’t say the US is a totally free and open market. But go ahead and name all meaningful markets, more open and free (to world trade) than the US…

          • 0 avatar
            niky

            Again, you’re assuming from the point of view of a private buyer. An OEM will not convert in this manner. Modifications to the car’s body and spec still have to pass quality assurance and inspection. And if the affects exterior panels in any way, rust-proofing, body integrity and water-proofing still have to be checked.

            Ford can do this because they can integrate it into an existing facility for little to no cost. Just open an extra line.

            Again. Big difference between doing this for a handful of cars in a garage and doing this for thousands of units a month.

            For someone with presence in the US, again (again), this shouldn’t be a big deal (unless the loophole is closed), but for someone without those facilities, it’s an effective tariff barrier.

            What experience do you have with “conflicting globals” such that you can declare them junk? Your regionalism is showing through, again, DM.

            Asking for a free market assumes any actually exist. All markets use unfair tariffs to prop up internal industry. Those that don’t simply use high tariffs for other purposes (say, New Zealand). I have never claimed otherwise, and I’m curious as to why you think I have. I even noted the US is easy to trade with (given certain conditions) This doesn’t mean that we can’t point out that the same practice in the US is unfair and market distorting.

          • 0 avatar
            DenverMike

            @niky – You might have missed this part of the article:

            “…at a contractors facility in the Port of Baltimore, the seats are removed and the windows…”

            That doesn’t sound like an Ford assembly plant to me. But I’m just a private buyer… Nor does it sound like a complicated conversion or process. OEMs will sub out sunroofs and convertibles, so this is nothing new. And no big deal. Dealer will send trucks out to be lifted with big wheels/tires and other mods.

            I didn’t mean globals were ‘both’ conflicting AND junk. All trucks would either interfere with other US offerings, (their own or their business partner’s) or are complete junk.

            Bottom line is, you won’t find a freer meaningful market, despite everything you want to believe.

          • 0 avatar
            niky

            So, we’re going back to the game of you setting up your own strawmen to shoot down without actually reading what I write?

            Should I repeat the part where I said that no markets are truly free and that the existence of tariff barriers elsewhere doesn’t mean we can’t comment on this one?

            I write about the market for a living. I am painfully aware of the intricate, interconnected tariff and trade barriers and agreements which distort international vehicle trade. Stop pretending that I’m a starry-eyed dreamer who believes the global economy is a happy free market.

            —-

            The problem with your use of the word “conflict” is this:

            “All the rest of the ‘globals’ than don’t conflict are pure junk.”

            Vehicles between manufacturers “compete”, vehicles within manufacturers “conflict”. Your original usage suggested the latter, as opposed to your current post, which suggests the former.

            —-

            The subcontractor isn’t a few guys in a shed. It’s a Logistics company, which has its own quality audit and vehicle inspection system, and, depending on customer needs, paint booths and body repair, if vehicles are damaged in transit. WWL is a very big operation.

            The work is done in a warehouse, yes, but at a facility equipped with the aforementioned quality control stations and checks. That isn’t free. The work isn’t free. And the extra seats and glass that are ripped out aren’t free. That’s hundreds of dollars down the drain.

            All to protect jobs in Mexico and Canada. Whoopee. Again, not that this is any different from European or Asian Free Trade zones with barriers of entry to outside cars, but again, that doesn’t mean we can’t talk about it.

            Right?

          • 0 avatar
            Vulpine

            Niky, As much as I hate to admit it, I have to agree with Denver Mike on one point: Ford is NOT using an assembly line in any conventional sense to modify the Transit vans when they arrive in the States. They are individually driven into a warehouse, modified in about 15 minutes and driven back out onto a storage lot to await shipment to dealers. This process was clearly covered in another TTAC article about 2 weeks ago.

            I do agree with you on the other point; that there are other countries with more open automotive markets than ours. Europe, Asia and even Australia appear to be far more open than the US, though admittedly in the long run it would be cheaper to build the most popular models on-site rather than shipping them and risking what happened to an entire shipload in the Pacific a couple years ago. But you can’t know what the popular model will be until you export a few and watch sales.

          • 0 avatar
            DenverMike

            @niky – Maybe you can make a living writing, but you need to take a course on reading.

            My original question was for you to name a market “as free”. Then you jump in with:

            “What part of 25% punitive tariff is free and open?”

            But then it doesn’t matter how complicated and labour/parts intensive a conversion is. It just comes down to money. And any OEM from anywhere in the world can hire the same or similar contractor to perform similar tasks. If they can’t swallow a couple or few hundred dollars, why are they in the game? Lots of things can break the deal if they’re on such shaky ground.

            Do you think it’s otherwise cheap to ship across an ocean and set a dealer network after meeting local safety and emissions? It doesn’t matter if you’re selling Widgets or Autos. If you can’t sell a large enough number of them, are you really in business?

            Yes we’re missing a few disposable trucks, not for sale in the US, but we’re missing lots more cars. And who’s gonna cry for all the cheap throwaway car of the world and the horrible 2.5% tariff and other regulations keeping them from our shores?

        • 0 avatar
          RobertRyan

          Very true.

    • 0 avatar
      RobertRyan

      @Big Al from Oz,
      Didn’t Mullaly say that Australia had the most competitive Automobile market in the World? Anyway saw a few of these Transit Connects in Europe. Similar to the VW Caddy in many respects.

  • avatar
    Extra Credit

    Things will get messy when you butter your bread on both sides. I expect there are many interested parties reaching for the popcorn as they watch how this plays out.

  • avatar
    Big Al from Oz

    Just to rub the salt in, here a sample of the pickups we are getting. This is about 2/3’s of what on offer. It misses out on Holden and Ford utes, Landrover utes, Patrol pickup,76 Series Landcruiser, Foton, Great Wall, Mahindra, Tata, Ssyangyong etc, plus we get the US full size imports.

    You guys in the US could have vehicles like this. It would be nice.

    Thank Detroit and the UAW. But there will be ‘Defenders’ of the chicken tax. This will be one interesting thread.

    http://www.caradvice.com.au/249408/ute-comparison-ford-ranger-v-holden-colorado-v-isuzu-d-max-v-mazda-bt-50-v-mitsubishi-triton-v-nissan-navara-v-toyota-hilux-v-volkswagen-amarok/

    • 0 avatar
      Kenmore

      So I followed your link and saw a bunch of worthless little turds with barely any bed length. They’re no more useful than a CUV or minivan with the seats out/stored.

      I don’t think you’re going to stoke up much envy here.

      • 0 avatar
        doctor olds

        I noticed these little trucks are much more expensive than a full size P/U. It is very easy to see why many more buyers choose a vehicle like a Tahoe for similar price in NA.

        It is no wonder Aussies have to limit themselves to such small trucks, at those prices on top of high priced fuel!!!

        We will see how the GM twins do in their attempt to resurrect this nearly dead segment.

        • 0 avatar
          chuckrs

          Aussies pay way more than we do for any vehicle. THe US and OZ dollars are close to parity – US $ about 5% more dear. A Cayman S in OZ is about twice as expensive as in the US according to one Aussie owner commenting on Planet-9, a Cayboxster oriented site.

          • 0 avatar
            Pch101

            The Aussies have a luxury car tax, which the US doesn’t have. At the level at which it’s set, the largest seller of luxury cars in Australia is Toyota.

            You’ll never hear Al complain about the luxury car tax, even though automakers that sell the taxed vehicles in Australia aren’t happy about it. He is obsessed only with US tariffs, while taking absolutely no interest at all in all of the rules that makes vehicles more expensive for his own countrymen.

          • 0 avatar
            Big Al from Oz

            @DocOlds
            With your comment you can see why I don’t think you’re an engineer’s a$$hole.

            You claim to be knowledgeable, worldly. We have the 5th highest nominal GDP globally. What are our wages then? Our minimum wage?
            Our average wage? Our work conditions?

            Google why we have high wages. Like I’ve stated in the past comparing Australia to the US with currency and is similar comparing the US to Mexico. You get more bang for you buck in Mexico. Does that make Mexico a better place?

            @Pch101
            Tell me more about the luxury car tax.

            How can the luxury car tax disadvantage when it’s levied on ALL vehicles in a bracket? Not selected vehicles like the chicken tax. The chicken tax is designed to be a barrier not a revenue collector.

            You know your logic is very similar to DlM’s.

          • 0 avatar
            Pch101

            “How can the luxury car tax disadvantage when it’s levied on ALL vehicles in a bracket?”

            No, that isn’t true, Al.

            The luxury car tax is assessed to include the 5% import tariffs that Europeans and others have to pay. So the tax is taxed, and importers from the EU and elsewhere find themselves getting hit with the LCT at an effective lower threshold than the domestics.

            In contrast, Holden has the, er, luxury to price its cars below the LCT threshold, and then get subsidies for the loss of revenue. Importers aren’t getting any such subsidies to sell cars at a price low enough to avoid the LCT. Yet conveniently, the top-tier Caprice is priced at about AUD$60k, just below the threshold for the luxury car tax.

            As a result, the luxury car tax is assessed disproportionately against the Europeans. The Europeans aren’t happy about paying it — they refer to it as a trade barrier.

            _____

            (T)he EU automotive industry has periodically complained to the Commission. It considers the LCT to be an ***unfair import tariff substitute***, resulting in uneven pricing and artificial restriction to the luxury car segment. A local LCT Working Group was formed in early 2008.The option of using WTO as an avenue has been repeatedly evoked by the same industry. The (European) Commission has raised the issue bilaterally with Australia in further meetings, with a view of seeking the ultimate abolition of the LCT (e.g. through a progressive increase of the threshold).

            http://madb.europa.eu/madb/barriers_details.htm?barrier_id=095280&version=4
            _____

            Al, that’s your cue to bring freedom to the oppressed car buyers of Australia. The European automakers eagerly await your fight for free trade on their behalf, as they seek to bring trade liberties to your darkened shores.

            Are you up for the challenge, Al? Will you help the Europeans to tear down the trade wall that surrounds your country? Do it for the children, Al, do it for the children.

          • 0 avatar
            Big Al from Oz

            @Pch101
            Like I’ve stated you are intelligent, but know what you are on about.

            Get some credence.

            http://www.caradvice.com.au/233233/hsv-gen-f-pricing-and-specifications/

            http://www.caradvice.com.au/149976/2012-fpv-fg-mkii-upgrades-and-prices-revealed/

            These are the competitors against the Euro imports. So you think an Impala is a Euro competitor I suppose.

          • 0 avatar
            doctor olds

            Al, we have been down this road a time or two!

            Aussies make more money, nominal median household income in Aus is 32% higher than US. But most everything costs a lot more, 42% more on average. Fuel is 68% more expensive at $1.55/liter= $5.87/gallon vs. $3.50/gallon in the US. Australians do well, just not as well as Americans in terms of consumer product prices vs incomes. You bring up fuel economy as the plus of the midsize pickups you tout.

          • 0 avatar
            Pch101

            “nominal median household income in Aus is 32% higher than US.”

            When economists compare incomes across borders, they use purchase power parity per capita. According to the World Bank for 2012:

            Australia – $43,300
            US – $50,610

          • 0 avatar
            Pch101

            Some of the vehicles that are subject to the Australia luxury car tax include:

            -Toyota Kluger (US: Highlander)
            -Toyota Tarago (minivan)
            -Nissan Pathfinder
            -Volkswagen CC V6
            -Nissan Z cars

            Sounds really, really luxurious. (Cough, cough.)

            Liberate your people, Al! Free Australians from their high-priced automotive barriers! Let freedom ring, Al, let freedom ring! Tear down this trade wall!

          • 0 avatar
            doctor olds

            @PCH101- PPP is the correct metric,I understand and saw the same data when I derived the numbers I presented. I have tried to use PPP with Big Al before, and decided to try another tack by breaking the issue down into its two components: incomes and cost of living. I thought to validate Al’s statement that Aussies make more nominal dollars. They do. It just doesn’t go as far, with their costs.

        • 0 avatar
          Pch101

          A Toyota Tacoma costs less in the US than a Toyota Hilux sold in Australia. Even the compact trucks cost more there than here.

          • 0 avatar
            chuckrs

            Thanks for clarifying on the luxury tax. If you know, when does it ramp on and what is the percentage?

          • 0 avatar
            Pch101

            The luxury car tax threshold changes every year, but it kicks in at about AUD$60k for most cars and A$75k for cars that are considered to be fuel efficient.

            The tax rate is 33% on the amount above the threshold. However, you should note that Aussie sticker prices are quoted with the federal sales tax (10%) and “stamp duty” (sort of equivalent to registration fees, varies by state, but often around 3% or so) included, and the 33% rate isn’t applied to the taxes that are included in the price.

            Al will deny this to the hilt, but the auto industry in Australia is not happy about the luxury car tax. As you will see in this article, even a Toyota minivan is subject to the tax — about 15% of vehicles sold in Australia hit the luxury threshold: news.drive.com.au/drive/motor-news/is-this-car-the-definition-of-luxury-20130725-2qkmq.html

          • 0 avatar
            Big Al from Oz

            @Pch101
            Again, you have shown what little you do know and what bull$hit spin you can place.

            You again are trying to twist data to support an argument you have no knowledge of.

            The vehicles below are our locally manufactured Euro competitors. I suppose our locally made Camry, or V6 Commodore are Merc, BMW, Audi, etc competitors :)

            I think our GMH Cruze is targeting 7 Series BMWs.

            You might consider a Focus a Euro competitor, but here in Australia a Focus is a daily hack.

            I’m glad you think that highly of our locally produced vehicles. Thank you Pch101.

            Check these prices out. Then tell me if they are affected by the Luxury Car Tax.

            http://www.caradvice.com.au/149976/2012-fpv-fg-mkii-upgrades-and-prices-revealed/

            http://www.caradvice.com.au/233233/hsv-gen-f-pricing-and-specifications/

            On the costs of an Australian vehicle. Everything in Australia is more expensive, but we are earning a significant amount more for our daily wages.

            The DocOlds failed to point out is fuel is the exact cost as in Canada as a percentage of our wage. Why do you think we have the highest rate of performance cars per capita in the world.

        • 0 avatar
          Vulpine

          Keep in mind that the article linked is an Australian article and that their current level of inflation has them making (and paying) about 30% more per vehicle than we do here in the States.

          I’m personally looking forward to having a smaller truck available.

          • 0 avatar
            Pch101

            The inflation rate in Australia during 2012 was 2.6%.

            Vehicle prices are considerably higher in Australia than they are in the US for a number of reasons. Inflation isn’t one of them.

            “I’m personally looking forward to having a smaller truck available.”

            Your local Toyota and Nissan dealers would be happy to talk to you. You can take the money that you saved in the United States, and use it to pay for a trip to Australia.

          • 0 avatar
            Big Al from Oz

            @Pch101
            You have just highlighted why I posted the link to the midsize comparison.

            We just don’t have 2 vehicle manufacturers to choose from. We have at least 14. This doesn’t include your US pickups.

            I’m highlighting what the US doesn’t receive not what you (and a few others) think the US should receive.

            How many people are in the US that can’t afford a new pickup, even a cheap one?

            The US does have a lot of people who don’t earn that much money. Why not have a cheaper product they can use. Is the US only geared for the rich?

            Why not increase competition. Competition breeds progress.

            Why should the UAW/Big 3 determine through lobbying with the government what can and can’t be sold in a free country.

            Pickups are the money earner for the Big 3, they apparently are keeping them afloat. Wouldn’t that suggest to you that maybe more competition would help reduce costs? Even for your full size trucks.

            If you think your trucks are that good and you guys don’t ‘want’ the global midsizers. Then why have the Chicken Tax? How much does it cost to manage? Especially if according to you it doesn’t have any impact.

            I think it obviously does, or this Transit article wouldn’t be here.

            @Vulpine
            A guy on another site worked out that a new vehicle in Australia is approximately 66-70% of the cost of an equivalent in the US.

            So a $50k highend midsizer would cost between $30-$35k in the US (for a diesel).

            Many people just do a simple conversion of currency and don’t factor in all variables. Even some engineers, something I would have thought would have been simple for an engineer. Especially since he’s stated he’s been to Australia and has intimate knowledge of our auto industry.

          • 0 avatar
            DenverMike

            @BAFO – Are you running that low on propaganda? Now you’re citing nonsense from some random dude on some other site?

            It should tell you something when the US sells one to two million full-size pickups a year. I guess we can afford them. But we don’t need cheap, throw away trucks like we don’t need cheap throwaway cars. They would lose so much value, so fast that it’s like flushing money away. Lease payments on a Great Wall would likely cost as much as finance payments. We don’t want them and GW knows it. They’re not stupid

            US Big 3 don’t need the Chicken tax, but it’s a bureaucracy. It lives on, but we 1st need to get rid of bureaucrats. We’re stuck with it for now, but don’t confuse that with needing it. Its existence proves nothing.

            If everything was a conspiracy like you think it is, you’d think US Customs would wave Ford thru instead of hassling them at the port. And why isn’t Mercedes called out for their Sprinter CKD crimes.

      • 0 avatar
        Nostrathomas

        What qualifies you to decide what a turd is? Just because something isn’t huge, it’s not worthy? Funny how the rest of the world can do it’s business with smaller trucks, yet only in ‘Murica and Canada does someone need something the size of a bloated whale to carry around a toolbox.

        I’m pretty envious of all those…especially the Landcruiser, I would love to have that on our shores.

        • 0 avatar
          Kenmore

          “What qualifies you to decide what a turd is?”

          My keyboard?

          No, sheer size isn’t what I care about. Long bed and fuel economy in a smaller pickup would be ideal. But all that website shows are 4-dr. desert toys.

        • 0 avatar
          mkirk

          If you really want a 70 series Land Cruiser you are in luck. They have built them for long enough that you can import one under the 25 year exemption and the only thing that has really changed is the front end and IMHO the old one looks better. Find a 1FZ-FE powered one and you can even get parts via your Toyota dealer or any of the Land Cruiser parts houses (same motor as the 80 series). Bring your wallet and your BP card. And before someone spouts off a ridicoulous fuel economy number I have spent a lot of time with an HZJ78. Good for a block shaped SUV, but thats it and they don’t pull as much as I would have thought. Also the rear is leaf sprung.

        • 0 avatar
          mkirk

          I wonder if any of the trucks mentioned by Big Al meet US Crash standards. Having driven Great Walls, Mahindras, and Tatas I am thinking perhaps not. And the 70 series Land Cruiser began rolling off assembly lines before Reagan demanded Gorbachev “Tear Down This Wall” and is pretty unchanged so I think not.

      • 0 avatar
        Vulpine

        First off, they’re not all that small, though admittedly smaller than the typical Crew Cab F-150 “with barely any bed length.”

        I expect many of these would be quite popular in the States.

        • 0 avatar
          mkirk

          I would counter that the Frontier and the Tacoma seem to more than satisfy the US market based on sales numbers and I own a Frontier…It is considerably smaller than an F150 and vastly smaller than a Dodge though considerable larger than the Rngers and S-10’s of yore I owned. And I don’t care what B.A.F.O says…The VQ40DE is a much more pleasent drive than the last Navarra diesel I spent time with.

    • 0 avatar
      mkirk

      You aren’t really rubbing salt in by pointing out a bunch of trucks the US market doesn’t really want. Great Wall!? Really? The midsizers we already get outclass these trucks in every way. I spent some time with a new one a year ago. It felt like a bad copy of an early 90’s HiLux. The 70 series Land Cruiser is cool. It was cool back in the 80’s when they started making it too. While I would consider one should it come here it would really be more of a Jeep competitor as the Land Crusier premium on pricing would make it uncompetetive to those just wanting a smallish truck.. Landrovers? Yeah, because I like wrenching on new rigs. We had some new Defenders in Afghanistan. A niche vehicle here at best that requires a support team to use as intended. Tata and Mahindra were nothing special either…both suffered from interior bits that tended to fall off. I dont like the Chicken tax, but we arent missing anything in the models you mention.

    • 0 avatar
      Tinn-Can

      Remember the Ford Explorer Sport Trac? Yeah, most people don’t because no one wanted to buy one…

      • 0 avatar
        N8iveVA

        yeah they only sold about 400,000 of them total

      • 0 avatar
        Les

        I wanted one!

        But they discontinued it when it came time for me to trade-in, so I got a Jeep Patriot instead.

        I also wanted a Subaru Baja, but again they discontinued before I was in the market to buy so I got a Chevy Blazer.

        *sigh*

        Of course what I Really wanted was a Suzuki Sidekick, but there were no dealers within 100 miles when that was selling new.

        This sucks, none of the really cool cart/truck/utes I wanna buy are ever available When I’m ready to buy them.

    • 0 avatar
      redav

      You can keep your El Caminos and Explorer Sport Tracs, I (and most other Americans) don’t want them.

      However, I would like a smallish midsize pickup that is lighter and cheaper than the monstrosities we currently have–kind of like what the Ranger used to be.

    • 0 avatar
      goldtownpe

      That fancy new Ranger only got 17.2 mpg as-tested. No wonder Ford is not bringing the new Ranger here.

    • 0 avatar
      racer-esq.

      We pay 22K US for a Holden Commodore coupe. How much do you pay for a Commodore with the high output 3.6? Ford is killing the Falcon. The next “Commodore” will likely be built in the US or Canada. The chicken tax is stupid but trivial. By the way, there is no chicken tax with OZ, it was waived in a trade deal a few years ago.

      Let me know GDP per capita in the US vs OZ if you think the US is like Mexico (other than that, unlike OZ, the US and Mexico will still be making cars in four years).

  • avatar
    jimmyy

    Some of the stories from Ford leave a sour taste in my mouth.

    1) Chicken Tax avoidance

    2) EPA MPG Inflation. Many posters on car review sites cars.com and Edmunds.com claim huge misses on Escape and Fusion.

    3) EcoBoost shudder. Many posters around the web tell stories about newer vehicles sitting endlessly on dealer lots while mechanics struggle to diagnose and fix these. Seems especially widespread on F series pickups. Google “EcoBoost Shudder”. Some stories appear hardship where middle class people struggle to make payments on a vehicle they can not drive to work.

    One more item. I have noticed what appear to be professional written posts on consumer car review sites for a number of Detroit automakers. It appears NY is cracking down on this practice. Charges were filed against Yelp surrounding a yogurt product. Appears posters were being paid $1 per post that appeared to be a consumer review praising the yogurt on Yelp. Looking at the quality of some posts I have seen in MotorTrend.com, Edmunds.com, and cars.com, I wonder if this same paid poster activity occurs frequently on auto purchases. Would make for a very interesting conversation on TTAC, although I wonder if TTAC would ever get a car to drive for review after such a piece.

    • 0 avatar

      Chicken tax is nothing more than a way for crying labor to keep high wages, the only real positive to it has been moving some Jap production to US shores, of course, competitive labor and better, lower cost vehicles from the big three would probably have been more appealing.

      EPA is really not a Ford problem. The EPA makes the standards, all companies use it to their advantage. 48mpg is not cruising highway speed, but it is the sweet spot for turbos. The C-max (made for people with horrible taste and no common sense anyhow)got its rating also through EPA guidelines of drive train testing rather than specific vehicle testing.

      I haven’t had a single eco-boost sitting on my lot waiting to get fixed. You can google any problem with any car and find 100 post online, plus you only hear about the people who complain. It’s actually quite similar with how we ended up in Iraq with intelligence echo.

    • 0 avatar
      jpolicke

      This tax has been gamed for decades. Isuzu brought otherwise finished Troopers to California missing back seats, so they could qualify as “truck parts”, same as with Toyota and Nissan pickups having their beds made and attached here. Has anyone ever actually paid the tax before? Why doesn’t Ford just leave the seats in and offer window blanks as a dealer-installed accessory?

    • 0 avatar
      thornmark

      You are correct, Ford does have a problem hitting EPA figures. As CR has well-documented, Ford is an outlier, getting worse real world MPG with its hybrids and Ecoboosts relative to EPA and other manufacturers and their EPA figures.

      • 0 avatar
        George B

        The Fuelly website is a great place to check real world fuel economy.
        https://www.fuelly.com/

        My best guess is that Ford engineers were more aggressive than their peers in designing vehicles specifically to get impressive fuel economy numbers on the EPA tests. Not a bad strategy for a truck company to survive CAFE, but they probably should have been more cautious in how they marketed ecoboost. Should have explained that turbos allow more power when you need it, but that using the boost isn’t free.

  • avatar
    doctor olds

    Maybe this suit will help bring the Chicken tax to an end, though the US makers are correct to look for reduction in Japan’s very real barriers in exchange.
    Aussies do have diversity of mid-sizers, though that segment appears to be of little interest to American consumers. Not the kind who merely comment on blogs, but the kind who actually spend money on new vehicles.

    • 0 avatar
      jimmyy

      I don’t think a suit bringing the Chicken tax to the end. Instead, Ford motor company has no problem getting tax payer handouts … tax payer subsidized energy department loans, massive CP borrowing at below market rates subsidized by the FED during tae crisis, and special tax code breaks for the auto industry inserted into the tax code several years back. As if they have not got more than their share of tax payer gifts, the decide to cheat the country from the chicken tax.

      • 0 avatar
        jpolicke

        Ford isn’t cheating on the tax, the tax is cheating the country. To make a political point, the tax raised prices for consumers (all taxes are ultimately taxes on consumers) and restricted choice. The only irony here is that back in the day Ford was probably among those lobbying for it.

      • 0 avatar
        Loser

        Jimmy, cherry picking your facts again? Toyota also took advantage of the same loans that Ford and others did. Seems like a smart business move to me. Bitching about a bailout is rich coming from a Wall street guy.

    • 0 avatar
      krhodes1

      Doctor Olds, which *American* cars or trucks exactly do you think the average Japanese car buyer would be interested in buying in any volume, exactly?

      • 0 avatar
        doctor olds

        American companies make 23% of the worlds cars, iirc. They have lots of products for lots of markets. They certainly make products similar to many Japanese vehicles somewhere in the world. Granted, Kei cars may not be built by any makers outside Japan.

        My point is that Japan has barriers that result in all imports combined selling a small share of their market. The best performer, VW, barely accomplishes single digit share.

        • 0 avatar
          highdesertcat

          doc olds, my oldest son is married to a Japanese national and lived and worked in Japan for eight years.

          American cars are available in Japan, but very few Japanese want to drive one because the products they choose to buy are much more to their liking.

          When I visited him in the Shinjuku District there were lots of BMW, Mercedes, Audi and VWs, but very, very, very few American-brand cars on the road.

          Now that my son is working at the branch of that Japanese bank in California, he drives a 2012 Grand Cherokee SRT8, while she drives a 2013 Honda Accord EX (on lease).

          When they return to Japan upon the completion of their tour in the states, they’ll go back to driving Japanese cars, in Japan.

          • 0 avatar
            doctor olds

            @highdesertcat- I appreciate your anecdotal input, and the fact remains that imports comprise a very tiny share of the Japanese market, empirical evidence that can not be explained with “consumer choice” alone. As I am fond of reminding you, General Motors far out competes Toyota everywhere else, selling about 2 million more vehicles than Toyota outside of Japan. GM is 25% larger than Toyota outside of their protected home market.

            The very best selling import, VW is even less successful in Japan than it is in the US, with its small market share in both markets. They too outsell Toyota outside of Japan.

            My son was in a wedding in Japan. Loves the place.

  • avatar
    raph

    Oh…. I’m so ”shocked”, Subaru did the same with the Brat if anybody cares to remember, although I don’t seem to recall any sort of cries about tax dodging with that from the government. I’m sure this has less to do with Ford’s creative interpretation of the chicken tax and more to do with a money hungry government looking for easy money by screaming unfair or perhaps another manufacturer has taken note of the Transit’s success and called in a few favors.

    • 0 avatar
      Land Ark

      It was largely different with Subaru being that the Subaru headquarters weren’t located in the US and Subaru wasn’t actively lobbying for the tax to remain in effect for others but be overlooked for themselves.
      Gaming the system is one thing, but gaming the system you demand remain in place is unethical at the very least.

  • avatar
    npaladin2000

    So in other words, Ford is heavily in favor of the Chicken Tax, provided it’s only applied to their competition and not to them. Ok, yeah, sure, I won’t be driving a Ford lately.

    • 0 avatar
      bball40dtw

      You think Honda, Toyota, GM, Fiat, BMW, etc don’t take advantage of legislation and loopholes whenever they can? Please.

      • 0 avatar
        npaladin2000

        Most of them aren’t stupid enough to baldly insist that said laws should only apply in their favor and against their competition. Ford is saying that we should have the Chicken Tax. But only for automakers not named Ford (or maybe GM also).

        • 0 avatar
          bball40dtw

          They are taking advantage of a loophole that other manufacturers have as well. I don’t support their position on the chicken tax, but I’m sure advocating for a policy while finding a way to profit from avoiding that policy is not the worst thing an automotive company has ever done (Or done this week).

          They probably should just build the Transit Connect in Mexico since it has a FTA with the EU. The Fiesta is supposed to move to Thailand anyway, so that’ll free up some space.

          In the end, you and I talk about it online, but most consumers don’t care. How many people that bought a TC know it was made it Turkey, and now Spain?

          • 0 avatar
            npaladin2000

            Actually, no. The government just told them they can’t take advantage of that loophole anymore. Their position is that their competition should not be able to (which is valid) but they SHOULD be able to (which is bull****).

          • 0 avatar
            bball40dtw

            Wouldn’t a lobbying group for the Big 3 try to go to Washington and get the best deal in place for the US auto industry, or at least what they think that to be?

            I’m sure that BMW, VW, and Mercedes have similar efforts in Germany, among other places.

            That doesn’t make it right, but its an everyday reality in business. My point is that this is business as usual for pretty much any of the auto companies. I’m sure the Japanese auto companies probably let the Japanese government know how they feel about the value of the yen.

  • avatar
    Beerboy12

    I see many Transits on the road… Unsurprisingly, businesses are sucking these things up because who would not want an economical, durable little van in today’s tough economic climate?
    Good sales are going to attract all sorts of attention, not all of it good, sadly…

  • avatar
    Pch101

    “retaliated by slapping a 25% tax on imported trucks and vans, apparently to impact the then popular VW Bus”

    Initially, the chicken tax included taxes on other items such as brandy. It wasn’t just about trucks.

    The VW Bus was not included in the chicken tax, as it is considered a passenger vehicle for the purpose of the tariff. What was impacted was VW’s truck version of the bus, which was a truck because it had a bed in the back.

    “Ford saves thousands of dollars on every Transit Connect by avoiding the Chicken Tax, even after accounting for the cost of building them as passenger vans and then removing the same equipment.”

    What’s funny is that Americans aren’t paying anything more for the Transit Connect that the Europeans are, and that the passenger vans are priced above the cargo vans. Automaker economics are not very straightforward.

  • avatar
    mkirk

    I wonder if they would be perusing this situation so aggressively if the Transit Connect was a GM product since they are stockholders in the company.

  • avatar
    DenverMike

    It’d be cheaper for Ford to only sell passenger TCs, but at the cargo van price. Let the consumer remove the seats and vinyl the windows. Or as mentioned, let the dealer mod them at the sale.

    But it’s silly for US Big 3 OEMs to lobby for the tax when they have exponentially more to lose from it than by having to compete with a few of the world’s crappy trucks. That’s if they’re willing to set up shop in USA/Canada. US Big 3 OEMs have way more to gain from Free Trade overseas.

    But then offshore OEMs already selling in the US are quietly the main beneficiaries of the Chicken tax as these crappy global trucks would impact small/midsize (offshore OEM) cars, trucks and SUV/crossovers the most.

    Free World Trade would severely damage the OEMs already selling everywhere. They can only lose.

  • avatar
    Rental Man

    I’m not sure Ford is alone here in gaming the system. It’s just how bluntly Ford does it.
    IIRC Mercedes dealerships push the Crew version of it’s Sprinter van (2 glass windows + Bench seat) over the cargo van because that way it avoids the need to be re-assembled in the US so it gets shipped complete and allows for deeper discounts.

  • avatar
    billchrests

    3 years ago I moved to a Ford Transit from short Dodge Van and immediately found must less cargo space. Barely 60 inch depth with seats removed and 48 – 50 inches with seats in. Taking seats out is an hour job with special allen wrench Seats are very heavy and no handles to grab, very poorly designed. Not a one person job. Everything about vehicle (handling – steering – road noise – poor heater)is “truck-like” compared to Chrysler Van.

    • 0 avatar
      billchrests

      I just measured the depth of Ford Transit Van load space 59 inches with seats in – 69 inches with seats out.

      • 0 avatar
        Vulpine

        I’m glad you corrected yourself, but…

        That back seat only takes up 10″ of cargo depth? Really? Wow! They must not even have been designed to carry people in the first place! That bench seat must have been pushed up right against the front seats with literally no legroom.

        One of my business-owner friends happens to have one of the hi-top Transit Connect models and that certainly looks like more than a mere 6′ of load space behind the front seats; 7′ easily and maybe even 8′, though I admit I haven’t measured it.

        • 0 avatar
          CRConrad

          @Vulpine:Maybe the seats are of the fold-and-flip kind?

          The kind, that is, where the backrest folds forward flat onto the cushion; then the whole package folds forwards, rear end (where the passenger’s would be, too) pointing straight up, forward edge of cushion and upper end of backrest pointing down, underside of seat cushion now facing backwards and forming the front wall of the cargo area. A package like that shouldn’t have to take up much more than ten inches, or even less if the seating isn’t overstuffed but rather Spartan.

    • 0 avatar
      mkirk

      I am shocked that a big ass ful sized van has more space than a Transit Connect. Whats next…more legroom in a 68 Continental than a Smart?

  • avatar
    Big Al from Oz

    @Doc Olds
    You claim to be an engineer with your finger on the pulse?

    What is the actual cost of a vehicle in Australia relative to our wages and GDP? Not much, as a matter of fact similar to the cost of ownership of a vehicle in the US/Canada.

    Perception can be dangerous when try to assess or make judgement, as an engineer I thought you would have had that discipline.

    Comparing costs here to the US is like comparing the US to Mexico. Is Mexico better because it’s cheaper?

    @Pch101
    The chicken tax is a targeted tax to disadvantage imports. It wasn’t designed to collect revenue, it was designed as a barrier and it has worked.

    The luxury car tax is levied on ALL vehicles, not just imports. It’s actually on all vehicles over $60 000, not pickups, vans or commercial vehicles.

    It’s great to act knowledgeable like you do, but use the knowledge as an effective tool.

    • 0 avatar
      Pch101

      “The luxury car tax is levied on ALL vehicles, not just imports”

      The luxury car tax is assessed to include the 5% import tariffs that Europeans and others have to pay. So the tax is taxed, and importers from the EU and elsewhere find themselves getting hit with the LCT at an effective lower threshold than the domestics.

      In contrast, Holden has the, er, luxury to price its cars below the LCT threshold, and then get subsidies for the loss of revenue. Importers aren’t getting any such subsidies to sell cars at a price low enough to avoid the LCT. Yet conveniently, the top-tier Caprice is priced at about AUD$60k, just below the threshold for the luxury car tax.

      As a result, the luxury car tax is assessed disproportionately against the Europeans. The Europeans aren’t happy about paying it — they refer to it as a trade barrier.

      _____

      (T)he EU automotive industry has periodically complained to the Commission. It considers the LCT to be an ***unfair import tariff substitute***, resulting in uneven pricing and artificial restriction to the luxury car segment. A local LCT Working Group was formed in early 2008.The option of using WTO as an avenue has been repeatedly evoked by the same industry. The (European) Commission has raised the issue bilaterally with Australia in further meetings, with a view of seeking the ultimate abolition of the LCT (e.g. through a progressive increase of the threshold).

      http://madb.europa.eu/madb/barriers_details.htm?barrier_id=095280&version=4
      _____

      Al, that’s your cue to bring freedom to the oppressed car buyers of Australia. The European automakers eagerly await your fight for free trade on their behalf, as they seek to bring trade liberties to your darkened shores.

      Are you up for the challenge, Al? Will you help the Europeans to tear down the trade wall that surrounds your country? Do it for the children, Al, do it for the children.

      • 0 avatar
        Big Al from Oz

        @Pch101
        Since when does a Camry, Holden Commodore, Ford Falcon compete against a prestige Euro vehicle. I’m actually glad you think that highly of our vehicles to consider our Commodore/Falcon/Camry a 7 Series competitor.

        Come on, you really are trying hard to spin.

        Even most of our HSV and FPV vehicles have the luxury car tax and they do compete against those Euro vehicles.

        There are many Euro vehicles that come under the luxury car tax as well.

        Stop your spinning, like I’ve told you before you twist and argument to suit your paradigms.

      • 0 avatar
        Big Al from Oz

        @Pch101
        I’m glad you think our Cruze, Commodore, Falcon and Camry are 7 Series competitors just like you Focus’s are. I hear a Kia Soul is competing against Audi now in the US, this comment makes as much sense as what you just wrote.

        What about the real Euro competitors we have? Like HSV and FPV, most of their vehicle prices are hit with the luxury car tax.

        We have a plethora of Euro cars that aren’t taxed by the luxury car tax and yes they do compete with our outstanding (according to you) locally manufactured daily drivers.

        It’s a well and good to act knowledgeable, but use that knowledge with some integrity. Earn some credence.

        The luxury car tax doesn’t affect most Australian built vehicles, because they fall under it. If a prestige vehicle is above it, how can it possibly increase the sales or desirability of a locally manufactured product. I mean our main selling local cars are $20 000 under the luxury car tax.

        Very silly. Your logic is amazing.

        • 0 avatar
          Pch101

          Some of the vehicles that are subject to the Australia luxury car tax include:

          -Toyota Kluger (US: Highlander)
          -Toyota Tarago (minivan)
          -Nissan Pathfinder
          -Volkswagen CC V6
          -Nissan Z cars

          Sounds really, really luxurious. (Cough, cough.)

          Liberate your people, Al! Free Australians from their high-priced automotive barriers! Let freedom ring, Al, let freedom ring! Tear down this trade wall!

    • 0 avatar
      Spike_in_Brisbane

      @Big Al from Oz
      I have lived in both countries and I cannot let this go unchallenged. Cars are WAY cheaper in the US. I just quickly googled a BMW 335i sedan which costs $100,000 to drive away in Oz including $8,000 luxury tax. It is $85,765 before any taxes or charges. In California it has an MSRP of $43,200 before taxes.

      I owned a Mercedes CLK320 Cabriolet in California which I bought 5 years old for $20,000 and sold four years later for $8,000. On returning to Oz my wife wanted the same car but we could not find one under $50,000.

      My salary was similar before going to the US, in the US and back in Oz in pure dollar terms disregarding exchange rates. You are way off the mark.

      Refs: http://bmw.com.au/faces/jModelComparison.jsp?first=272&tab=Pricing
      http://www.truecar.com/prices-new/bmw/3-series-pricing/2014/EC8795CC/

      • 0 avatar
        Big Al from Oz

        @Spike_in_Brisbane
        You can’t say it’s cheaper in the US. Unless they are earning what we earn on average, simple.

        If you have been to both countries, then you do know why. You can’t compare Australia to the US as much as you can compare the US to Mexico or China.

        1. If Australia had the population of the US we would sell 17-18 million vehicles per year. This is even higher than the best US figure.

        2. We have the highest rate of ownership of performance vehicles.

        3. Tell me anyone other than a 14 year old flipping burgers at McDonalds in Australia on less than $12 per hour? What is our minimum wage? $34 000 per year. An adult burger flipper here at McDonalds is on $23 per hour. I do know in the States someone who work at Wawa pumping gas or a supermarket checkout are on terrible wages. My nieces and nephews do that. Here they are on nearly $20 per hour. How much is a car detailer here on that works in a car yard? I just saw a little while ago an ad for a roadtrain driver, $100 000 a year, to drive a truck, not even in a mine.

        4. Things are cheaper in the US and I figure it would cost about 75% of what it costs here to live. But we earn at least 1/3 more in wages. Our average wage is $70 000.

        Just because it is cheaper if you convert some cash and buy doesn’t mean it is necessarily cheaper overall as a place to live in comparison to another country.

        It’s costing twice as much here to make a Cruze than Sth Korea. Our wages are high, but this flows onto other areas.

        Look at real estate, we didn’t have a crash, how much does it cost to rent in Sydney. What about healtcare? Insurance? My mother in NJ pays nearly what I pay for landlord, property and $50 000 car insurance just on her $17 000 dollar Focus.

        At the end of the day it’s all relative. Look at the real cost and earnings not just the exchange rate.

    • 0 avatar
      doctor olds

      @BAFO- Not an idle claim. I retired after a 40 year career with the largest carmaker in the world (for all but one year of my time with GM). I like to point out GM was #1 Globally in the most recent quarter as well!

      As a matter of fact, I have enough familiarity with your vehicles and their costs to be absolutely sure the data supports what I write. That is why I have posted precise numbers for your enlightenment.

      My month long visit in 2010 included visits to new and used car dealers. As I have written, my parents were there 9 or 10 times including two vintage car tours of the complete perimeter of the country- once in a Model A and later in a Model T. I have many Aussie friends who have visited my home a number of time as well.

      I was delighted to see all the Commodores on the road, surprised at how many in the Sydney area were re-badged as Chevrolets, and astounded to see a year old, used Commodore 6.0L for sale at roughly 2/3 more than a new Pontiac G8 in America!
      Virtually everything is much less expensive in America compared to wages. In Oz, Coffee is three times as much and no free refills! Restaurant food also between 2 and 3 times the cost. Housing, likewise. I love Australia, but am not naïve as to how the cost of living compares. Your higher wages don’t begin to cover your even higher costs.

      I am afraid it is you who doesn’t understand the realities and dynamics in the auto business, particularly here, in NA.

  • avatar
    Scoutdude

    The seats that are removed are not saved they get sent off to the shredder and the metal in them recycled.

    I like how they ruling notes that this is done clearly to take advantage of the tariff schedule and how it took them so long to figure it out. Duh our tax dollars at work and proving a case of regulators spending lots of money to justify spending lots of money and making a case for their jobs.

    Fact is that Ford saw a loop hole and exploited it and they are not the only one to exploit loop holes in the law. So how about slapping the higher tariff on the Sprinter since their partial disassembly and reassembly in the US is clearly done to circumvent the tariff. It clearly serves no manufacturing or marketing purpose and is done purely to avoid the tariff.

  • avatar
    Lou_BC

    Most seem to be missing the point about tariffs and fixating on “USA versus imports” or what ever “us versus them” mindset we are trapped within.
    My research on the topic has shown that we the consumer are getting fleeced due to tariffs. One report on the “chicken tax” stated that once the “chassis cab” loophole was closed, domestic trucks saw their prices rise 28% and imports rose by 23%.
    The USA pressured the Japanese into “voluntary restraint” programs which saw the price rise for automobiles in the range of 25%.
    The USA car companies did not use the advantage to gain market share but to ramp up profits. The Japanese companies allowed their prices to rise too.
    There are no vestal virgins in the auto world. They ALL screwed us the consumer.
    The end result is that we ALL have paid billions EXTRA in money for the privilege of driving motor vehicles due to tariffs and import restrictions.

    One can argue the effectiveness of tariffs and if anyone feels that they are ineffective, why is Ford lobbying to keep the Chicken tax and other tariffs on the Japanese? It has nothing to do with access to the Japanese market.
    Ford wants to protect their own interests and maximize profits.
    Ford is lobbying for reciprocity between the EU and the USA on tariffs and technical barriers to trade.
    Why?
    Ford wants to protect their own interests and maximize profits.

    I see that the anti-Ford types are lining up to kick the cat too. It isn’t as if GMC and Chrysler aren’t involved in lobbying against the Japanese.
    Oddly enough, GMC doesn’t have a huge issue with Thailand and guess where they spend 1/2 a billion to build Colorado’s?

    This link is about the “Multi-Purpose Vehicle Reclassification and
    Minivan Dumping” but has good information on tariffs.
    http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1443&context=auilr

    This is PR from the UAW to its membership to lobby for tariffs does lend credence to the fact that the chicken tax is a protective barrier.
    http://www.uawregion8.net/Departments/CAP-Issues/trade/thailand-free-trade.htm

    I don’t usually care for Wikipedia but it does explain the chicken tax and attempts at closing loopholes:
    http://en.wikipedia.org/wiki/Chicken_tax

    This link has news about technical barriers to trade:
    http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130524/ANE/305249993#axzz2ZKMqOTGe

    One should look beyond partisan or brand politics and just look at the big picture.

    TTAC has published multiple stories on the chicken tax and tariffs in general. Look through their archives. They are all a good read.

    • 0 avatar
      Pch101

      “The end result is that we ALL have paid billions EXTRA in money for the privilege of driving motor vehicles due to tariffs and import restrictions.”

      You might want to look at the financial statements of the major automakers.

      A simple exercise — if you cut their revenues by 20%, all of them lose money. All of them.

      That should make it clear that they aren’t padding their prices, otherwise they would be rolling in cash instead of delivering mediocre returns. On the contrary, they make fairly normal profits and particularly in the United States, they are forced to compete on price.

      The inflation-adjusted prices of individual cars in the US over the last few decades has essentially been flat. The main reason that prices have risen above inflation is because some car buyers are loading up their cars with optional equipment. They want the bells and whistles, and they get them.

      Your beliefs aren’t supported by actual data. If you think that a US-EU trade agreement is going to cut prices by 25% or whatever, then you are incredibly naive.

      • 0 avatar
        Lou_BC

        @Pch101 – part of the reason prices have been flat is USA industry exported their inflation. How many jobs have been lost to offshore production?
        Your whole assertion is an over simplification of how everything works but since you want to play that game, lets look at numbers:

        There is supposedly 2-3 % profit margin on USA small cars and what is the import tariff?
        Pickups tend to have extremely high profit margins in the order of 25% and higher.
        What is the tariff on pickups?

        If any company cannot compete on a global scale, should we feel sorry for them if they cannot remain viable and go the way of the dinosaur?

    • 0 avatar
      DenverMike

      @Lou_BC,

      Blunt’s group and the European industry association ACEA say in comment:

      “Regulatory differences between the markets are equal to an added tariff of 26%”

      Who the heck is Matt Blunt, might you ask? And more importantly, what the hell is he basing that random # he pulled out of his arse?

      This is your link, not mine. Here’s a clue:

      “Matt Blunt, president of the American Automotive Policy Council, which represents General Motors, Ford Motor Co. and Chrysler Group.”

      Obviously, US Big 3 OEMs have tremendous gains to be made in other markets, especially Europe, and will stop at nothing and not above spreading propaganda. But how would simultaneously lobbying to keep US tariffs high, help lead us to Free World Trade?

      Besides. It’s completely a ONE WAY street. What European import autos are we missing and do we truly want them? The EU auto industry sure doesn’t need to take on new competition from the US Big 3 OEMs. They’re already circling the drain. The EU’s import tax needs to stay and will absolutely remain at 4X that of the US tariffs and about 8X more on import trucks, after Chicken tax workarounds.

      A while back you said the closing of the Cab/Chassis loophole (Dec, 1979), led to much higher import truck prices. That’s until I proved you wrong. No, import trucks remained ‘cut throat’. Now you’re saying it was the price of domestic trucks that shot up?

      Actually Japanese OEMs did intentionally raise their car prices during the VRA era. Or more accurately, went completely upscale on their top marques and fully optioned. Average transactions went crazy from this, plus low supply meant high demand, even on entry level marques. High content Japanese sports car prices went nutz and don’t forget the all new Japanese luxury brands.

      Even if you were right instead of wrong, none of it would change anything.

      • 0 avatar
        Lou_BC

        @DeadMan – same old tired arguments. I am citing expert sources when it comes to closing the “chassis cab” loophole. You do point out an interesting point – why is a lobbyist for the Big 3 talking about homogenizing tariffs and technical barriers with the EU but not Japan or South East Asia?
        As you have pointed out, there isn’t much on that side of the pond for USA companies to be worried about. The main reason, as pointed out in that article “Wolfgang Schneider, Ford’s European vice president for governmental affairs, agrees. “It will allow us far more flexibility to produce in the best place,” he told Automotive News Europe earlier this year. “Do we need this when we sell 500,000 units of a particular model in a country? No. But if you are talking about 20,000 or 30,000, yes, because it enables you to bring in niche products.”
        What are niche products for Ford?
        They want to sell the Mustang in Europe and import Transit vans into the USA. I’m sure that the Ranger would show up under that “niche” market category.

        What is Ford, GMC, and Chrysler’s stand when it comes to Free trade with South East Asia and the orient?
        Totally opposite because they would die if FTA’s opened up trade.
        Odd how you aren’t critiquing the ““Multi-Purpose Vehicle Reclassification and Minivan Dumping” link. I guess financial and legal experts are industry shills too (well, I guess that they can be – there, I threw you a bone).
        Your strategy on that one will to take an excerpt from that study and post it completely out of context. You’ve never let the truth get in the way of your side of the argument.

        • 0 avatar
          Pch101

          “What is Ford, GMC, and Chrysler’s stand when it comes to Free trade with South East Asia and the orient?

          Totally opposite because they would die if FTA’s opened up trade.”

          No, that isn’t correct.

          The AAPC’s position is that it supports the Transpacific agreement. However, it objects to Japan playing a role in it. Presumably, Detroit would like to build cars in markets such as Thailand for US export, but doesn’t want Japanese competition.

        • 0 avatar
          DenverMike

          @Lou_BC – No, I’ve explained the irrelevance of that link a 1/2 dozen times. US Big 3 OEMs claim they were harmed by the “dumping” of Japanese minivans. That was found to be without merit. At the same time, US Customs tried to reclassify 2 door SUVs like the Pathfinder and Samurai, as “trucks” and therefore subject to the Chicken tax. Those 2 door SUVs were being replace by their own 4 door SUVs, so it became a non issue. 2 door SUVs were going away regardless. The 4Runner was already a 4 door and the Bronco II became the Explorer. It quickly became a dead issue.

          I doubt SE Asia and the Orient are big targets for the US Big 3 right now, but Europe is. Start up high, and work your way down. Europe has 2X the population of the US and our most popular cars, trucks and SUVs could be far more than ‘niche’. There’s only one way to find out. But we have to start by dropping the Chicken tax, even if loopholes make it completely irrelevant. And the US Customs needs to stay focused on spotting contraband, counterfeits and illegal aliens, not dictating policy.

          But I don’t always have time to cover all the nonsense you throw out at one sitting. But I’m most interested on that “26% tax equivalent” that you keep repeating… Where did Matt Blunt come up with it? It’s a ridiculous amount that would prohibit all but the most expensive and high end imports. You have heard of the 3-series BMW, right? Audi? VW? Honda? Toyota? Nissan? Subaru? Hyundai? Kia? None of these would exist in the US if that was true.

          Niche vehicles prohibit themselves from lack of profitability. Lifting tariffs would help out a bit, and more of them would exist outside of their home market. Great. Everyone wins. What was the question again?

      • 0 avatar
        Vega

        “The EU auto industry sure doesn’t need to take on new competition from the US Big 3 OEMs”

        That’s the funniest thing I’ve read in a while. US OEMs can’t even produce cars Europeans want to buy when they are using their local subisidiaries (just look at recent fortunes of Opel and Ford).

        Nothing produced in the US even remotely meets the needs of a majority of European consumers. We don’t buy the cars by inch. Does the US produce competitive, fuel efficient 4 cylinder DI or Diesel engines? Station wagons? Compact SUVs? Compact Minivans?

        Face it. The US is the world’s biggest niche market with unique consumer demands: Cheap, roomy, reliable mobility with less focus on efficient packaging and fuel efficiency. The reason US built cars have not been a success in Europe are many, but definitely not tariff-related…

        • 0 avatar
          RobertRyan

          @Vega,
          Add substandard build quality and you cannot give them away here.The Only “US Vehicles” that the EU would be worried about is from “transplants” like BMW and Audi based in the US Southern States.

  • avatar
    Big Al from Oz

    @P c h 1 0 1
    I’m sorry about your tag, but I have difficulty posting blogs whenever I use your name. I think TTAC Staff have a block against it.

    I’m extremely happy that you consider our locally manufactured Commodore, Falcon, Camry and Cruze are of a 5 or 7 Series BMW standard. I didn’t realise you really like our vehicles that mcuh. Thanks.

    Our main locally manufactured vehicle are about $20 000 less than what the luxury car tax, so how does this impact an imported 7 Series?

    We do have a range of locally manufactured vehicles that compete with AMG and M Series type Euro vehicles, they are called HSVs and FPVs. These are high performance (muscle cars that handle) vehicles. Most of these vehicles are hit with the luxury car tax.

    We have a plethora of Euro vehicles that come in under the luxury car tax as well.

    Australia doesn’t have a tax that was designed as a barrier to importation of vehicles like the chicken tax. The chicken tax stops importation, unless like this Transit regulations are stretched to the limit.

    You can try and deflect this argument into irrelevant issue like the luxury car tax. I have noticed that sponsored bloggers use this tactic to deflect any debate away from an argument that isn’t positive and support the institution they represent :)

    • 0 avatar
      Pch101

      Some of the vehicles that are subject to the Australia luxury car tax include:

      -Toyota Kluger (US: Highlander)
      -Toyota Tarago (minivan)
      -Nissan Pathfinder
      -Volkswagen CC V6
      -Nissan Z cars

      Sounds really, really luxurious. (Cough, cough.)

      Liberate your people, Al! Free Australians from their high-priced automotive barriers! Let freedom ring, Al, let freedom ring! Tear down this trade wall!

  • avatar
    Lou_BC

    @Pch101 – so your theory is that it is okay to have tariffs since it keeps the USA car industry alive?

    To use your argument:

    It is reported that the USA car companies make 2-3% on small cars?
    What is the tariff on cars?

    The USA car companies make huge profits on pickups. It is rumoured anywhere from 20-40%.
    What is the tariff on pickups?

    If any company cannot compete without protection then they should be allowed to go the way of the dinosaur.

    Imagine if the EPA was around way back then?

    Can you outrun T-rex? ;)

    You are basically saying that free markets are great only if the benefit USA companies.

    • 0 avatar
      Pch101

      “so your theory is that it is okay to have tariffs since it keeps the USA car industry alive?”

      One of the problems with these internet discussions is this sort of black-and-white thinking.

      I never said that I supported or opposed tariffs. I’m merely pointing out that your “facts” are wrong, that the US isn’t unique in having various rules for trade, and that the chicken tax doesn’t really impact the market in a significant way, given the nature of the US truck market.

      I get it — you’re convinced that vehicles would be much cheaper if the US would lower its evil barrers. But the reality is that Americans are already paying less for cars than those in other first world countries. Americans can even buy German cars for less than what the Germans pay for them, and that’s not even accounting for the much higher sales taxes (VAT) that the Germans have to pay.

      The US already has lower tariffs than most of its peers. It already has relatively low vehicle prices. The US market is highly price competitive, so much so that even major automakers such as Peugeot can’t afford to be in the US because the revenue potential is too low.

      If you know anything about finance, then it should be obvious that automakers can’t possibly cut prices across the board by significant amounts. Their margins are already fairly tight as is. If they did what you would like them to do, then they would all file bankruptcy.

      Unfortunately, the previous editor here had a penchant for serving up disinformation, and you bought it hook, line and sinker. I’m sorry that you find car prices to be high, but unfortunately for Canadians, they have to pay a premium for being in a small market and for dealing with producers that have to manage exchange rate risk.

      • 0 avatar
        Lou_BC

        @Pch101
        “Unfortunately, the previous editor here had a penchant for serving up disinformation, and you bought it hook, line and sinker.”

        If you took the time to look at the ” “Multi-Purpose Vehicle Reclassification and Minivan Dumping” article, it mentions tariffs and increased costs. They did not make it up. I’ve also found other “scholarly” articles that also talk about increased costs associated with barriers.

        Since you want to use cheesy quotes like “hook, line and sinker”, here is one for you, “If you don’t stand for something then you fall for everything”.

        And how did my nationality all of a sudden come into play?
        Your deflection and insinuation is irrelevant to the discussion.

        But since you brought it up, I mentioned this to DenverMikey a while ago, a person tends NOT to see the society norms, beliefs, customs, and rules that they live with because that is what they grew up with and that is what has shaped almost every aspect of their lives. That in turn shapes how they see what is around them.

        Those “outside” of a culture can often see what those “inside” a culture cannot see.

        If you are confused by the word “culture” then maybe you should replace it with the word “paradigm”.

        And to continue along that thought, you must have heard the term “thinking outside the box”?

        You are standing inside your box, I am not.

        • 0 avatar
          Pch101

          “And how did my nationality all of a sudden come into play?”

          Er, I was pointing out that you are doomed to pay higher car prices for living outside of the US, because Americans get better pricing. For all of this talk about supposed US barriers, we still get a better deal than everyone else.

          You should also take a hint that you live in a country with an import tariff that is more than double that of the US. The fact that this doesn’t seem to be a problem for you suggests that you are being hypocritical.

          What’s funny is that you and Al are obviously obsessed about US tariffs, even though they have no effect on you. You never mention the tariffs and barriers in your own countries, even though they are higher than those in the US and they do impact you.

          Go fix Canada, and go have Al go fix Australia. It’s obvious that neither of you really care about trade barriers, you’re just looking for excuses to whine about the United States. The double standard makes your agendas obvious.

          • 0 avatar
            Lou_BC

            @Pch101- this thread is about a USA ruling not a Canadian ruling. Do you actually know what the import tariffs are for Canada?

            The interesting thing is that once the Auto Pact was replaced by NAFTA, there are NO tariffs for USA cars coming into the USA. USA companies are screwing Canadians with higher prices. Actually, all of the car companies are. Over 90% of our population is withing 60 miles of the USA border.
            The “you pay more because your market is smaller” is typical PR BS from car companies.

            The import tariffs that were still on he books pre-AutoPact and Pre-NAFTA were never revoked. Once the Autopact was replaced by NAFTA which only covers the USA and Mexico – those old tariffs were reintroduced. Those tariffs were ruled illegal by the WTO. The Canadian Government wasn’t going to bother protesting the ruling but Ontario politicians, CAW (Canadian version of UAW), plus the USA auto compnies lobbied our government to fight the WTO ruling. Since Ontario has a huge population base and can sway results in federal Elections, they bowed to political pressure and disputed the WTO ruling.

            As you can see, big corporations and big unions coupled with selfish politicians f$ck things up here too.

          • 0 avatar
            Pch101

            “Do you actually know what the import tariffs are for Canada?”

            My comments should make it pretty obvious that I do know. And yes, Canada’s tariff for non-NAFTA vehicles is more than 6%, versus the US rate of 2.5%. (Australia’s tariff is also higher than the US’, but don’t expect Al to tell you that.)

            “The “you pay more because your market is smaller” is typical PR BS from car companies.”

            It really isn’t. The US is far more price competitive than other markets, because the competition among automakers here is cut throat. The US provides opportunities for scale that aren’t available elsewhere, which pushes prices down.

            Automakers also have to manage exchange rates. Major corporations, including non-US companies, often set margins based upon US dollars. When they’re pricing goods for markets such as Canada, they’re not using the current USD-CAD exchange rate, but something that approaches a worse-case scenario. If the border was eliminated and Canadians paid with US dollars, then Canadians would end up with lower prices.

            As an American, I can buy a 3-series BMW sedan made in Germany for several thousand dollars less than what a German would pay, and that’s not including the 19% VAT required in Germany. Figure out why that is, and you’ll understand what’s going on.

        • 0 avatar
          Big Al from Oz

          @Lou_BC
          Bloggers have to realise why I have choosen to look carefully at the global automotive industry. In particular the US’s position.

          It started out 18 months ago. I bought a BT50. I got onto the net to find reviews about it. I found PUTC which I found interesting.

          As I discussed the attributes and deficiencies of my style of vehicle I realised ;

          1. That the US lacked this style of vehicle.

          2. There were a group extremely defensive about having this style of vehicle in the US.

          3. Most English language sites are heavily visited by contributors from the US, this has to be expected.

          4. The amount of people from the US who aren’t aware of the world around them. This amazes me considering the www. So naturally most discussion will be US centric.

          I’m actually more interested in economics and world events.

          I do travel extensively to the US and I do like full size trucks. But why no competitive midsize market?

          I had some run ins with people with similar attributes to DlM and (pch*). So I researched and found out that the US market is heavily geared to protecting the full size pickup at the expense of other products.

          There are some who don’t like the thought of competition against full size trucks. As soon as you mention that you are labelled anti or non-American.

          The reality is in the end all they have for a defence is you are anti American if you don’t conform to their view.

          I don’t think it’s anti American to debate the value of a fairer trading position.

          The ones that do argue black and blue are the ones who generally view the US through rose coloured glasses.

          I view world trade this way. If you live in a suburb, wouldn’t you want the people around you to be similar?

          Not be the only one with the mansion and everyone around you living like $hit.

          I really don’t think that’s an anti-American stance.

          We’ll see if there are any problems posting this:)

  • avatar
    Big Al from Oz

    @PSYCH00, still having probs blogging to you TTAC staff must have some kind of block.

    If you have read my previous posts on the Australian auto industry you will see my views. Go back and have a read. You can’t assume you know me. Did I state I support the tax. No.

    I stated that the tax isn’t targeting a particular part of the market to limit imports. The chicken tax is a barrier, do you receive the midsize pickups we have, NO. You don’t get those vehicles because the Chicken Tax prevents them from being competitive. That was the point of my comment, the impact the Chicken Tax has on your import market. It exists or the Chicken Tax wouldn’t exist. Period.

    The luxury car tax is nothing like the chicken tax in design.

    You stated the opposite. The vehicles you have presented don’t compete with any Australian vehicles. Like I stated does a Renaualt V6 powered Pathfinder compete with a Cruze? A Nissan Z might compete with a HSV/FPV, but hey, don’t let the truth get in the way (again your what is appearing to be UAW spin), HSVs and FPVs pay the luxury car tax. They might compete with the Z.

    Another point, are they same as your vehicles in the US? Remember we receive more variation of some vehicle models.

    Do you have a Pathfinder like the one that is subject to the luxury car tax? It’s well and good to bring up examples but what about the vehicle itself. Would this Pathfinder be an Infinity in the US? I think you had better use google.

    Remember we have a Toyota Prado as well, you guys sell them as a Lexus.

    As for freedom, well I posted a link the other day with a map of the globe. Did you look at it. There are only several countries that are as free as Australia and guess what the US isn’t one of them.

    You are an example of an extreme Amercian Exceptionalist. It will be pointless debating you on the virtues and pitfalls of nations.

    Face it, Pch101, you are wrong. You can’t let your ‘love’ for the US cloud your judgement, the US is a great country, but it is far from the best sometimes.

    Supersizing and bigger doesn’t translate into better or best.

    Your best bet if you are going to debate me is to use google and come up with facts that actually align to an argument or can be proven, not some subjective crap.

    The planet you live on must be like some backwater in a bayou.

    Look an learn about the world, use google and don’t just assume you are the most clever, because you will look like a goat.

  • avatar
    Big Al from Oz

    @Psych000, I have probs when blogging to you sorry,
    If you have read my previous posts on the Australian auto industry you will see my views. Go back and have a read. You can’t assume you know me. Did I state I support the tax. No.

    I stated that the tax isn’t targeting a particular part of the market to limit imports. The chicken tax is a barrier, do you receive the midsize pickups we have, NO. You don’t get those vehicles because the Chicken Tax prevents them from being competitive. That was the point of my comment, the impact the Chicken Tax has on your import market. It exists or the Chicken Tax wouldn’t exist. Period.

    The luxury car tax is nothing like the chicken tax in design.

    You stated the opposite. The vehicles you have presented don’t compete with any Australian vehicles. Like I stated does a Renaualt V6 powered Pathfinder compete with a Cruze? A Nissan Z might compete with a HSV/FPV, but hey, don’t let the truth get in the way (again your what is appearing to be UAW spin), HSVs and FPVs pay the luxury car tax. They might compete with the Z.

    Another point, are they same as your vehicles in the US? Remember we receive more variation of some vehicle models.

    Do you have a Pathfinder like the one that is subject to the luxury car tax? It’s well and good to bring up examples but what about the vehicle itself. Would this Pathfinder be an Infinity in the US? I think you had better use google.

    Remember we have a Toyota Prado as well, you guys sell them as a Lexus.

    As for freedom, well I posted a link the other day with a map of the globe. Did you look at it. There are only several countries that are as free as Australia and guess what the US isn’t one of them.

    You are an example of an extreme Amercian Exceptionalist. It will be pointless debating you on the virtues and pitfalls of nations.

    Face it, Pch101, you are wrong. You can’t let your ‘love’ for the US cloud your judgement, the US is a great country, but it is far from the best sometimes.

    Supersizing and bigger doesn’t translate into better or best.

    Your best bet if you are going to debate me is to use google and come up with facts that actually align to an argument or can be proven, not some subjective crap.

    The planet you live on must be like some backwater in a bayou.

    Look an learn about the world, use google and don’t just assume you are the most clever, because you will look like a goat.

  • avatar
    Big Al from Oz

    P????1
    I’m not really sorry for my retort.

    But you brought into the debate a dimension that really has nothing to do with the Chicken Tax.

    The luxury tax you brought into the argument has a different purpose to the Chicken Tax. Period.

    The Chicken Tax is a barrier, whereas the Luxury Car tax is just that, a tax on the rich (or the perceived rich).

    Seriously, if you want to debate, please bring valid, current and verifiable information.

    Don’t just use your beliefs as a basis for your arguments. When you allow emotion and the want to prove others wrong you will come unstuck.

    I you debate me use fact. Also, use google and other forms of reference as you will become more knowledgeable. The world is an amazing place and the US is only part of it. As time goes by the US will become a smaller part.

    I’m not saying Australia is great or the best at everything, but also remember the US is like most other places in the world, it really isn’t that much different. Most everyone has to go to work to pay for the kids and hope their futures are secure.

    Don’t let arrogance impede your judgement.

  • avatar
    Lou_BC

    @DeadMan – I figured that would be your tactic. If you were to re-read my post, let me cut and past it for you, “This link is about the “Multi-Purpose Vehicle Reclassification and Minivan Dumping” but has good information on tariffs.

    Please note the “good information on tariffs” part of the statement.

    I must add that since this story is about Ford getting nailed for sneaking the Transit Connect into the USA as a passenger vehicle – the aforementioned “Multi-Purpose Vehicle Reclassification and Minivan Dumping” is relevant to this discussion because the article talks about how they determine the purpose of the vehicle i.e. passenger vehicle versus truck.

    Wow, talk about a guy beating himself to death against the very wall of his own paradigm.

    • 0 avatar
      DenverMike

      @Lou_BC – Completely incomplete. But you can’t blame it. The link is on a totally different topic and only touches on the “Chicken tax” in passing. For your purposes, it’s perfect. But a complete waist of time on this thread. Thanks.

      Obviously you keep sidestepping my question. Where does Matt Blunt arrive at that insane “26% tax equivalent”? Not only is it absurd, it’s downright preposterous. Keep quoting him. It makes it clear you’re on the trolling path.

      • 0 avatar
        Lou_BC

        DeadMan – why don’t you send of an email to Matt Blunt? I’m not the one who thinks he is full of $h!t.

        • 0 avatar
          DenverMike

          @Lou_BC – I’m not saying Matt Blunt is full of $H!T, but… Actually that’s EXACTLY what I’m saying!

          “MATT BLUNT– ONE OF AMERICA’S LEAST POPULAR AND MOST CORRUPT GOVERNORS– CUTS AND RUNS”

          downwithtyranny.blogspot.com/2008/01/matt-blunt-one-of-americas-least.html

          Just applying simple logic, tells you what he’s full of.

          • 0 avatar
            Lou_BC

            Mikey – you must be a politician too.

            Your approach epitomizes the old saying, “if you can’t beat them with brilliance, baffle them with b^ll sh!t.

            you have never been able to disprove a single one of my posts.

            Let me repost this point:
            “Those “outside” of a culture can often see what those “inside” a culture cannot see.

            If you are confused by the word “culture” then maybe you should replace it with the word “paradigm”.

            And to continue along that thought, you must have heard the term “thinking outside the box”?

            You are standing inside your box, I am not.”

            Actually, your box is over your head. Try cutting some eye holes next time.

          • 0 avatar
            DenverMike

            @Lou_BC – I’ve proven all your nonsense false. All except for the craziest of claims, along the lines of Big Foot sightings.

  • avatar
    Lou_BC

    @Mikey – once again you bring up bigfoot but you forgot to mention Loch Ness monster.

    You must be really torn over this thread since it is Ford that is being brought to task over tariff circumvention.

    If tariffs and their effectiveness fall into the realm of bigfoot, why is Ford protesting this ruling, and why was Ford circumventing the tariff in the first place?
    If it is so easy to get around the tariff, why did Ford get caught in the first place?
    If the tariff doesn’t matter like you say, then why should you be so bent out of shape when someone points out that it does matter?

    @Pch101 made a very interesting comment in support of tariffs, if prices dropped by 20%, car companies in the USA would go broke. That lead to a very interesting correlation:

    The tariff on import cars is 2.5% and some sources put the profit margin on most cars at 2-3%.
    The tariff on pickups and vans is 25% and sources put the profit margin on those vehicles at 25-40%.

    I’d buy into Pch101’s argument more than your argument. Tariffs protect the profitability of the Big 3.

  • avatar
    Lou_BC

    @Mikey – you are the only one with “Big Foot” grade theories. Pch101 in his defence of tariffs pointed out that the USA auto industry would not survive a 20% reduction in prices.
    If one looks at the car import tariff, it is 2.5 % and the reported profit margin on smaller cars is 2-3 %.
    If one looks at pickups, the reported profit margin in in the magnitude of 20-40%. The tariff on pickups and vans is 25%.

    If your theory that the chicken tax is basically ineffectual and has not shaped the market place, then why do Detroit car companies fight the lifting of the tariff with Japan?

    If the tariff is ineffectual and easily circumvented (as you have said on other sites), then why is Ford in trouble with the Transit Connect?
    If this tariff doesn’t hurt anyone, why is Ford contesting it?

    You exhibit the very same syndrome I see with people who deny critical illnesses within themselves, just because one denies the existence of cancer or tariffs, doesn’t mean that the disease is not present.

    • 0 avatar
      Pch101

      “Pch101 in his defence of tariffs pointed out that the USA auto industry would not survive a 20% reduction in prices.”

      I would appreciate it if you wouldn’t go out of your way to misquote me.

      What I said was that the entire auto industry couldn’t survive massive price cuts. The fact that net income as a percentage of revenue of the major automakers is typically less than 10% should make that really obvious. I know that you want to feel ripped off, but you shouldn’t.

      “If your theory that the chicken tax is basically ineffectual and has not shaped the market place, then why do Detroit car companies fight the lifting of the tariff with Japan?”

      For the same reason that the European automakers oppose removing the EU tariffs — because the Japanese market presents few opportunities, so any tariff reductions are ultimately one-sided and go against their interests.

      “If the tariff is ineffectual and easily circumvented (as you have said on other sites), then why is Ford in trouble with the Transit Connect?”

      Disputes happen on occasion. The Customs office makes these decisions, and Ford obviously took a more aggressive interpretation of prior rulings.

      Regardless, if Ford ends up on the losing side of that argument, then they can do assembly work in NAFTA using knockdown kits, so they won’t pay anything close to 25%. For the US consumer, it is unlikely that the outcome of Ford’s argument with the customs office will make any difference. The US market is large enough that Ford can absorb the hit and create a workaround for it.

      One of the problems with your worldview is that you don’t understand the value or importance of scale. If the US had a market that was small, then the chicken tax would be an enormous obstacle because it wouldn’t be worth going to the trouble of create workarounds.

      But the US is such a large market that it is worth the effort. The abiiity to amortize the workaround costs across so many sales makes it cost effective to do so.

      Ford sells enough Transit Connects in the NAFTA zone to make knockdown kits a viable option. Mercedes does that with the Sprinter van, and sells a comparable Sprinter in the US for more than $10,000 less than the pre-tax price of the same vehicle in Germany. Again, figure out how that’s possible, and you’ll achieve some clarity on this topic.

  • avatar
    Lou_BC

    Odd – a victim of disappearing and reappearing posts once again ;)

    • 0 avatar
      Big Al from Oz

      @Lou_BC
      I think we are being censored :-)

      I have that issue quite frequently on this site, I wonder if others have the same problem.

      Barriers and tariffs are for one reason and one reason only to protect. Short term help is okay, but look at the chicken tax nearly 50 years on and the Big 3 can’t build a competitive pickup. Look at the reasons why.

      Before someone whines/complains, I’m not saying the pickups are bad.

      The only problem I find with these types of socialist instruments is they can create inefficiencies;

      1. costs to the public, ie, subsidisation, cheap loans, the tax payer must foot the bill,

      2. outdated workplace practices (UAW),

      3. overpriced vehicle costs, ie, Big 3 profit on pickups, and

      4. putting into place conditions for a failure of industry, ie, Big 3 bailout.

      How is this good for an economy? Someone has to foot the bill. As I’ve stated it will take a couple of decades for the US to change the way its vehicle manufacturers operate to become competitive.

      They can build much more competitive cars than pickups. Why? Pickups are protected from fair competition.

      Or this article wouldn’t be here.

      • 0 avatar
        Lou_BC

        @Big Al – my posts show up eventually but sometimes it takes a 1/2 day.

        I find it interesting how Pch101 tired to turn the debate to “foreigners are attacking the USA”, and “you pay more in your country so stop being jealous” BS. Even the “exchange rates” argument was used and only a weak minded person would buy that one. Canada’s loonie (dollar) has been on par with the USA greenback (dollar) for close to a decade. There have been years where our currency was actually worth much more.

        DiM on the other hand used obfuscation to try to minimalize any information I provide.

        The USA will eventually have to readjust how it does business because China and India are going to move into 1st and 2nd in relation to financial might. USA may be able to retain 3rd but some feel that Japan will move into that position.
        If the USA cut back on keeping military bases all over the world and used that money for R&D and infrastructure, they’d be able to keep 2nd or 3rd spot.

    • 0 avatar
      DenverMike

      @Lou_BC – I’m not full of theories like you. Not only do your theories come with zero to back them up, they lack any kind of logic.

      What industry could survive a 20% reduction in revenue? 2.5% decent revenue with mass sales. The US Big 3 rely heavily on trucks/SUVs, but take away any OEM’s biggest producers and they’re done. Without the Camry and Corolla, Toyota is history.

      The 25% Chicken tax is what it’s call, but has yet force a 25% increase in import truck prices. Your link that states a 23% increase in import truck prices (following the “VRA”) is wrong. The mini-truck craze/fad/explosion/invasion was totally reliant on cut-throat pricing and the VRA was years before the mini-truck craze. Just apply simple common sense. OK, don’t:

      http://www.thepeoplehistory.com/80scars.html

      The base price of the ’84 Chevy S10 was $6,993 while the ’84 Nissan PU was $5,634.

      The simple fact that Ford is under fire by the Feds says it all. Mercedes/Freightliner are also guilty of circumventing the tax. These are both niche vehicles without strong market demand/appeal. But they at least sell in OK numbers which crappy and disposable global pickups would not. They would be here otherwise. Those global OEMs have no doubt studied the US market and we reject cars like Diahatsu, Daewoo, Yugo and many others that can’t get any traction here.

      Everything revolves around resale value. There’s no way to know how low the resale value of Mahindras and other junk would be, but it wouldn’t be good. Do you think you could lease one?

      • 0 avatar
        Lou_BC

        Yawn – wake me up when that interminable drone ends.

        • 0 avatar
          Big Al from Oz

          @Lou_BC
          I think your correct in your evaluation of those two guys.

          The funny aspect of this debate is I really like US pickups. This is a different argument, I do think there is a larger midsize market in the States. But there will always be a fullsize market.

          As for the vans, well the European vans will do well in the US. Maybe that is what scares these two guys. Change.

          I get put down as anti or non American because I don’t like certain regulations that are unfair to the general populace in the States. This isn’t a true representation of me. I’m that way with any market, any country, any business.

          DiM/Mikey, will always be the UAW stalwart, you will not change that, loyal till the last man falls.

          Ready to deflect and alter a debate away from its argument. Poor guy, I really have some empathy for him. It must be a battle from within.

          Pch101, will always not believe that something outside of the US could be better and someone or something is always attacking America. He’s in a constant state of readiness to defend the imaginary.

          If these guys want a debate, then they should debate the debate, not some argument that has little to do with the matter at hand.

          Which is why did Ford even have to go to the extent it does with these little Transits to import them?

          This has added an additional cost to the consumer, unnecessarily and created a criminal situation. What a joke.

          What fool came up with the ideas to create an inefficient regulation/tariff/protectionist barrier called the Chicken Tax?

          • 0 avatar
            DenverMike

            @BAFO – The van is made in Turkey with a profit margin already obscene. It could be made anywhere (except OZ). The extra couple hundred spent on CKD kits would not be passed on to the consumer. The Market sets the price. Trucks carry tremendous profits, but why not charge the consumer for sailing the vans across the ocean too? That can’t be FREE. You’re being silly.

            I’m not saying the Chicken tax isn’t silly too, but different topic. If the US just charged the standard 2.5% duty on import trucks, the cost to those import OEMs would be about the same as CKDs, *EXCEPT* there would be nothing for trolls to cry about.

            However, if the TC van was in the US solely, it could not enter Europe without getting hit with a ludicrous 22.5% duty. Now that’s something to crow about!

          • 0 avatar
            krhodes1

            @DenverMike

            They DO charge the customer for sailing the van across the sea – it’s called the Destination Charge…

          • 0 avatar
            DenverMike

            @krhodes1 – The destination charge is always negotiable, and I see it as the dealer’s problem. Although, isn’t the destination charge only from Baltimore to interior states? Or all the way from Turkey.

  • avatar
    Big Al from Oz

    @TTAC Staff
    Why is it whenever I use Pch101’s name it can’t be posted? I have had another comment not post.

    I haven’t had an email from your moderator/editor in response to my complaint.

    If there is a block placed by TTAC Staff can you please remove and acknowledge my continual feedback regarding this issue.

  • avatar
    Lou_BC

    @Big Al – I agree, if there was a valid argument, obfuscation, and playing the “anti-USA” card would not be necessary.

    It is odd how Mikey and DM sound alike and DM started posting on PUTC using “English” spelling.

    Not that I want to labour/labor the point……. Ha Ha.

    • 0 avatar
      DenverMike

      @Lou & BAFO – Are you 2 really accusing “Mikey” and myself as being the same person? What’s the proper English word for when you’ve gone beyond “estúpidos”???

      I know you 2 hate to be proven wrong/ignorant/trolls, but is this some way of narrowing your field of opponents? On PUTC, BAFO accuses me of being or having some 25 personalities/user names. Basically anyone who opposes his trolling (most posters, the rest ignore), must be only one person…

  • avatar
    mikey

    Yeah….Really? While I may agree,and other times,not, with DenverMike. We are certainly not the same person.

    In my somewhat limited education I was taught “English” spelling. This won’t come as a shock to most the B&B. Spelling,and grammer are not my strong points.

    I have learned,that while Trolls can be quite entertaining, it best to just ignore them

  • avatar
    mikey

    @ DenverMike….I just read through some of the comments. I’m just blown away.

    Just you know my position. I’m a proud Canadian,and I’m very comfortble,with our relationship with the good people of the USA. I for one sleep better at night, in the knowledge that the might of the US military, has our back.

    In Canada,we do things a little different. That’s not to say better, just different.

    Like the USA and Oz, our political system in Canada breeds nut cases from the far/loony left, and from the far right.

    The good news is , that not many get elected.

    BAFO and Lou_…. As a gentleman,I’m going to ask you two to address me as “Mikey” and “DenverMike” by his proper handle.

    • 0 avatar
      Lou_BC

      Ok Denver………….. sorry…………. Mike……………oops……….. Mikey

      And thanks for the advice on trolls, it has worked well with Mikey …………. opps………… Denver Mike…………or was that Mikey?


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