Comments for TheDetroitBureau.com http://www.thedetroitbureau.com The Voice of the Automotive World Fri, 07 Dec 2018 17:25:03 +0000 hourly 1 http://wordpress.org/?v=3.2.1 Comment on FCA Set to Open New SUV Plant in Detroit by Paul A. Eisenstein /2018/12/fca-may-set-to-open-new-suv-plant-in-detroit/comment-page-1/#comment-964471 Paul A. Eisenstein Fri, 07 Dec 2018 17:25:03 +0000 /?p=131978#comment-964471 Or, perhaps, VW? Or, perhaps, VW?

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Comment on FCA Set to Open New SUV Plant in Detroit by John /2018/12/fca-may-set-to-open-new-suv-plant-in-detroit/comment-page-1/#comment-964470 John Fri, 07 Dec 2018 16:35:58 +0000 /?p=131978#comment-964470 Maybe FCA can buy the Poletown plant from GM at a bargain. Maybe FCA can buy the Poletown plant from GM at a bargain.

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Comment on Faraday Future Furloughs More Employees by Michael Strong /2018/12/faraday-future-furloughs-more-employees/comment-page-1/#comment-964468 Michael Strong Fri, 07 Dec 2018 15:08:46 +0000 /?p=131954#comment-964468 You know, it's when you have a drawn out thought "... before ... aahhh ... some churn at the top ..." Or, truth be told, some days it's tough to edit your own stories. Nice catch! Thanks! Mike You know, it’s when you have a drawn out thought “… before … aahhh … some churn at the top …” Or, truth be told, some days it’s tough to edit your own stories. Nice catch! Thanks! Mike

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Comment on FCA Pledges $5.7B Investment in Italian Auto Plants by Allen /2018/11/fca-pledges-5-7b-investment-in-italian-auto-plants/comment-page-1/#comment-964464 Allen Fri, 07 Dec 2018 03:45:31 +0000 /?p=131815#comment-964464 "FCA’s operating margin in Europe improved to 3.2%..." What was it before? “FCA’s operating margin in Europe improved to 3.2%…” What was it before?

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Comment on Faraday Future Furloughs More Employees by Allen /2018/12/faraday-future-furloughs-more-employees/comment-page-1/#comment-964463 Allen Fri, 07 Dec 2018 03:31:34 +0000 /?p=131954#comment-964463 "...the company was assumed dead before a some churn at the top..." What's a some churn? “…the company was assumed dead before a some churn at the top…” What’s a some churn?

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Comment on Toyota’s U.S. Chief Says More Tariffs Will Hurt Auto Sales by Paul A. Eisenstein /2018/12/toyotas-u-s-chief-says-more-tariffs-will-hurt-auto-sales/comment-page-1/#comment-964460 Paul A. Eisenstein Thu, 06 Dec 2018 17:55:58 +0000 /?p=131965#comment-964460 Sorry, James, we'll have to call nonsense on your comment. First, it is all but universally accepted that the Smoot-Hawley tariffs played a massive role in leading the US into the Great Recession. Secondly, as we have seen with the need to replace defective Takata airbags, you can't simply ramp up -- or move -- production on automotive scales in short order. Such moves, even when achieved, can lead to massive disruption in production and distribution short-term. Long-term, they can result in losses in efficiency. They also lead to counter-tariffs that limit one market's ability to export to others. We're already seeing that as demand for American products in China, which had been rising, stalls and crashes. In turn, that leads to lower profits AND jobs. You basically are creating an export-free economy, as well as one that is import-free. Global trade, when properly managed and generally free, not only boosts the economy but holds down costs. And that results in greater purchasing power and greater purchasing. To try to claim that manufacturers will simply absorb all those extra costs is absurd and completely out of line with fundamental economics dating back to Adam Smith, never mind Keynes. Protectionism may work for some economics struggling to grow but it ultimately fails. Even the Chinese are recognizing that. A more logic-based approach might press them to open up further but, despite the words of a certain person down in DC, trade wars are NOT easy to win. And, when handled improperly can lead to as much collateral damage as real shooting wars. Paul A. Eisenstein Publisher, TheDetroitBureau.com Sorry, James, we’ll have to call nonsense on your comment. First, it is all but universally accepted that the Smoot-Hawley tariffs played a massive role in leading the US into the Great Recession. Secondly, as we have seen with the need to replace defective Takata airbags, you can’t simply ramp up — or move — production on automotive scales in short order. Such moves, even when achieved, can lead to massive disruption in production and distribution short-term. Long-term, they can result in losses in efficiency. They also lead to counter-tariffs that limit one market’s ability to export to others. We’re already seeing that as demand for American products in China, which had been rising, stalls and crashes. In turn, that leads to lower profits AND jobs. You basically are creating an export-free economy, as well as one that is import-free.
Global trade, when properly managed and generally free, not only boosts the economy but holds down costs. And that results in greater purchasing power and greater purchasing. To try to claim that manufacturers will simply absorb all those extra costs is absurd and completely out of line with fundamental economics dating back to Adam Smith, never mind Keynes.

Protectionism may work for some economics struggling to grow but it ultimately fails. Even the Chinese are recognizing that. A more logic-based approach might press them to open up further but, despite the words of a certain person down in DC, trade wars are NOT easy to win. And, when handled improperly can lead to as much collateral damage as real shooting wars.

Paul A. Eisenstein
Publisher, TheDetroitBureau.com

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Comment on Toyota’s U.S. Chief Says More Tariffs Will Hurt Auto Sales by James /2018/12/toyotas-u-s-chief-says-more-tariffs-will-hurt-auto-sales/comment-page-1/#comment-964459 James Thu, 06 Dec 2018 16:41:10 +0000 /?p=131965#comment-964459 “Approximately 25% of the components of every car assembled in U.S., Canada and Mexico come from beyond the NAFTA region. Thus, tariffs would have a big impact on the U.S. economy, driving up the price for consumers and reducing sales of new vehicles by 2 million units annually.” Nonsense. Markets do not work that way. Consumers will not absorb the tariff it will come out of profit. Tariffs seldom cause a significant impact on consumers. Those parts will be sourced domestically and create both jobs and a Keynesian impact on the economy. Economist Vilfredo Pareto put it this way: “A protectionist measure provides large benefits to a small number of people, and causes a very great number of consumers a slight loss. This circumstance makes it easier to put a protectionist measure into practice.” When those parts were first sourced overseas consumers saw no benefit. They continued to pay the market price and the outsourcing cost saving went into profit. Tariffs will cause the reverse. Consumers will continue to pay the market price and profit will decline. For a century and a half the USA was the most tariff protected nation on earth and consumers rarely even noticed. Tariffs stimulated the economy and we prospered. “Approximately 25% of the components of every car assembled in U.S., Canada and Mexico come from beyond the NAFTA region. Thus, tariffs would have a big impact on the U.S. economy, driving up the price for consumers and reducing sales of new vehicles by 2 million units annually.”

Nonsense. Markets do not work that way. Consumers will not absorb the tariff it will come out of profit. Tariffs seldom cause a significant impact on consumers. Those parts will be sourced domestically and create both jobs and a Keynesian impact on the economy. Economist Vilfredo Pareto put it this way:

“A protectionist measure provides large benefits to a small number of people, and causes a very great number of consumers a slight loss. This circumstance makes it easier to put a protectionist measure into practice.”

When those parts were first sourced overseas consumers saw no benefit. They continued to pay the market price and the outsourcing cost saving went into profit. Tariffs will cause the reverse. Consumers will continue to pay the market price and profit will decline.

For a century and a half the USA was the most tariff protected nation on earth and consumers rarely even noticed. Tariffs stimulated the economy and we prospered.

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Comment on European Auto Execs Meet with Trump, Aim to Head Off Expanded Trade War by Paul Schroeder /2018/12/european-auto-execs-meet-with-trump-aim-to-head-off-expanded-trade-war/comment-page-1/#comment-964453 Paul Schroeder Thu, 06 Dec 2018 00:51:47 +0000 /?p=131936#comment-964453 Tariffs are such a bad idea. Just because Germany ships us a car, doesn't mean we are being ripped off. Besides, all it does is raise prices for Americans, who Trump claims he is protecting. It also acts as a job killer, as outlined in the article. I know in Trump's small minded view of the world every deal has a winner and a loser, but in my mind, that is not the way to build a successful business or a successful relationship with other countries. Tariffs are such a bad idea. Just because Germany ships us a car, doesn’t mean we are being ripped off. Besides, all it does is raise prices for Americans, who Trump claims he is protecting. It also acts as a job killer, as outlined in the article. I know in Trump’s small minded view of the world every deal has a winner and a loser, but in my mind, that is not the way to build a successful business or a successful relationship with other countries.

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Comment on Ghosn May Ring in New Year in Japanese Custody by Paul A. Eisenstein /2018/12/ghosn-may-ring-in-new-year-in-japanese-custody/comment-page-1/#comment-964449 Paul A. Eisenstein Wed, 05 Dec 2018 18:25:22 +0000 /?p=131926#comment-964449 It could be worse, the prosecutor's predecessor, Starr-san might have found no financial misdeeds but refused to give up without discovering some unrelated case of sexual harassment! It could be worse, the prosecutor’s predecessor, Starr-san might have found no financial misdeeds but refused to give up without discovering some unrelated case of sexual harassment!

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Comment on Ghosn May Ring in New Year in Japanese Custody by John /2018/12/ghosn-may-ring-in-new-year-in-japanese-custody/comment-page-1/#comment-964446 John Wed, 05 Dec 2018 12:58:09 +0000 /?p=131926#comment-964446 Japanese prosecutor, Mueller San, refused to comment until his 5 year investigation is completed. Japanese prosecutor, Mueller San, refused to comment until his 5 year investigation is completed.

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