In the 70s', Japanese cars were less expensive than domestic. I'm not sure why they were cheaper. I'm thinking it wasn't labor costs because the cost of living is pretty high in Japan.
There were many reasons, including labor costs, and that US car companies were building whales all through the 70s while Japan was building quality economy cars. I'm not sure Japan was all that expensive in the 1970s. That came later.
They were also less popular. They didnt start capturing large segments of the American auto market until the 1980's, and then it was a function of quality, not price. BTW- the reason why they were better at a competitive price is because the Japanese adopted Deming's approach to Total Quality Management.
Japanese cars were cheaper and better, it was a function of both. They weren't able to capture large segments of the market in the 1970s because the US government forced them to limit imports. IOW, it was an artificial government induced problem. That led to Japanese makers investing in US plants (without union labor, BTW). SO, if Japan adopted methods that were created by Americans, why didn't Detroit take the same approach? What you are saying is that Japan out-created and out-competed Detroit. Sounds like Detroit should have failed, if they were that unresponsive to the market.
Again, whatev. My point isn't that the auto industry should have survived (who cares?), it's that the residents of Detroit couldn't have done anything about it. This thread is about the city going into bankruptcy, remember? Or is your point about the unions? Well, yeah, the unions were part of the problem, for sure. But again, not sure what that has to do with the City of Detroit. Maybe a clarification is in order: it's not the car companies employees' pensions that are at risk right now- it's the city employees. Their union has nothing to do with the car companies, but the shrinkage of the tax base was directly affected by what happened. So- forces outside of their control have put their pensions on the chopping block. Hence my statement that they dont deserve what is happening right now.
My point is that the city workers accepted pensions that were obviously underfunded, so they have no one but themselves to blame. They were aware, or could have learned, of the issues and decided to ignore them. They accepted politician's promises, maybe the one single stupidest act a person can do. The money isn't there, since it was never properly funded in the first place. I've known about the problem of underfunded government pensions for several decades. Why didn't the people who were directly affected by this know it? My first thought is they believed their leaders. Big mistake.
Right. Because elected officials are always eviiiil and if people refuse to live in a workers anarchy they should just be thrown under a bus. Okaaaay. Got to go for now. Later.
So, what we're saying then is the city management failed in their job to make sure the pensions were properly funded. Underfunded pensions are a problem with a lot of companies, agencies, and governments. That's why pensions are being changed from defined benefit plans to defined contribution plans. We're going to see a lot more of this kind of thing happening... Underfunded pensions is like a pyramid scheme. The premiums of the younger workers goes to paying the pensions of the retired. Eventually, the workers at the bottom get screwed.
"The American Dream turns into a nightmare, and that nightmare devours the dreamers." (Paraphrased from J. G. Ballard).
