4/15/2006

Don't Blame the Consumer

Ford is going through some difficult times right now. They are shutting down plants and laying off thousands of workers. Ford management and workers seem to want to blame American consumers for their economic troubles. They seem to think we are somehow "Un-American" because we prefer foreign-made cars over American-made cars. The truth is that they mostly have themselves to blame, but politicians and unions have played a part in this too. The auto makers are mostly to blame because they have allowed themselves to get further and further behind foreign car manufacturers in quality. The government has sheltered them from competition with tariffs on foreign cars. The jobs bank that was agreed upon by union and Ford negotiators ultimately hurt both Ford and its workers.

Americans, just like anyone else in the world, want to get the most out of their money. All other things being equal, I think most Americans would choose an American-made car, but all other things are definitely not equal. Foreign car companies make much higher quality cars.

5 comments:

Hannah said...

I agree. America has been winning the world economic race by default up through the 70's because of WWI & WWII leaving all potential competitors in shambles. During these fat times management and unions have been unchallenged. If labor costs went up, management would simply raise prices. This great American auto industry shake up is a good thing. It’s definitely time to trim some fat and become efficient. Let’s just hope government will let them suffer in the short run so they can compete in the long run.

Frank said...

Hopefully with Ford's down sizing will be able to reorganize, and lower cost and raise quality to compete in the global markets. If Ford can sell in foreign countries they will do well in the US.

Dr. Tufte said...

This is another case where there is an asymmetry in what people say. Lots of American companies routinely trounce their foreign competition, but they don't crow too much about it. On the other hand, the auto companies are constantly crying about being hurt by foreigners. Who listens to them anyway?

Doug said...

Many foreign car companies manufacture some of their cars in the U.S. Is it un-american to buy them? Isn't the Toyota Corolla built in Fremont, California for example?

Dr. Tufte said...

Hmmm.

Isn't it "un-American" to buy something that isn't the best value for the price? If so, then the brand or the location where it is made are irrelevant.

I'm rather certain that a generation ago the commissars were telling the proletariat to buy a Zhiguli (aka Lada) because anything else was "un-Soviet".