Highland Pairos wrote:
I'm not sure what "foreign" even means these days. Many of the
most lauded cars are built here with US labor. They just don't
have the legacy labor costs with which GM, Ford, and Chrysler
must contend.
This is one aspect of the "Amurrrican vs. furrin" car debate that I find
most amusing. Define foreign vs domestic production. More importantly
which situation is more beneficial to the U.S. economy, an American car
(Ford, GM, Chrysler) that is built in another country (or at least a
signifacnt number of the subassemblies) or a foreign car that is built here
in the U.S. paying American workers? One school of thought says that the
money from the American cars go to American companies and benefits America,
while the money from the foreign car leaves the country. However, that only
applies to the 10-20% profit margins (that is a general estimation of profit
margin). The bulk of the money spent when you buy a car goes to the costs.
So the question is, which production situation puts more money into and has
greater benefit to the U.S. economy? (This is not at loaded question by me,
I truly have not heard a solid analysis upon which to form an opinion in the
matter. My personal speculation is that a Camry built in Kentucky does for
America then an F-150 built in Mexico.)
SteveP.
I'm not sure it matters much, and probably will matter less over time.
Markets are increasingly global. Trade has historically benefited all
participants after the initial bumps of adjustment occur. For example,
an F-150 built in Mexico means that some number of Mexican citizens
can find good work at home and US residents can buy a good product at
a better price. Despite all the howling we hear about trade causing a
net loss of jobs, no such thing is true. I don't have the cite handy,
but (and this is rough and from memory) from the Bush 41 Presidency
until today (prior to the recent rise in unemployment) there were
nearly *twice* as many people working in the US. Trade creates greater
markets and greater opportunity for everyone.
See, for example:
http://www.freetrade.org/node/737
http://www.freetrade.org/node/37
http://www.cato.org/pubs/policy_repo.../freetrade.pdf
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Tim Daneliuk
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