FCA Proposes a Merger with Renault

ShinerBock wrote:

wilber1 wrote:


The ones that stayed were the ones who started to build them here because of the tax. Foreign built trucks are at a 25% disadvantage from the get go. That was the whole idea behind the tax and it worked.

The ones that stated here actually sold trucks that people wanted so it was justifiable to build the trucks here. Foreign trucks are not at a 25% advantage from the get go either. Once you calculate lower labor rates, lower domestic taxes, less environmental regulations, lower employee pension compensation, and so on that is required in the US but not in other countries, then that 25% starts to dwindle. There is still a benefit to build here, but it isn't 25%.

I have stated that it did work for it's intended purpose which was to force companies to build in the US to protect the UAW, but it DID NOT protect the US manufacturers from competition. If it did, then they would have not had any competition while the chicken tax has been in place, but that is not the case. They had lots of competition. Those that built what consumers wanted stayed while those that built what we didn't want and instead tried to sell us what they thought we "needed" went away just like any brand that doesn't sell foreign or domestic.

Heck, it even forced Ford and GM to build factories here to compete with Honda, Toyota, and Nissan in the midsize truck market. So how did it help them from competition there?

You don’ think they could have sold a lot more of those small trucks here if they had been 25% cheaper? How many trucks do you think Toyota and Nissan would sell here if they were 25% more expensive? It didn’t protect the UAW because none of the plants are unionized and most are in right to work states where they pay substantially less. Basically, those states are doing the same thing as Mexico.