FCA Proposes a Merger with Renault

ShinerBock wrote:

wilber1 wrote:

You aren't listening. Not having to pay that 25% because they build their trucks in the US means they cay pocket the 25% they used to give government and charge the same for their trucks. It also means US manufacturers can keep their prices up.

You just said "You don’ think they could have sold a lot more of those small trucks here if they had been 25% cheaper". You did NOT say, you don't think they would have been more profitable if the cost of goods was 25% cheaper.

And you are not listening to me. You are assuming that they are exactly 25% cheaper which is false. In the US you have to pay higher labor rates, provide healthcare and pensions, abide by tougher and costlier regulations both local and federal, and many other things that foreign manufacturers don't have to abide by. By the time you add all of this up, that 25% higher cost you keep claiming as fact(even though you don't know 100%) is probably dwindled down to maybe a 5-10% cost difference between building in the US and paying the chicken tax. Could be less, could be more depending on the value of the US dollar versus other currency at the time.

wilber1 wrote:
The UAW can't stop foreign manufacturers from locating in the US but they can protect US manufacturers from vehicles built outside the US and that is what they are doing by lobbying for the chicken tax. For a foreign manufacturer to sell light trucks in the US, it has to commit to building a plant here, otherwise it won't make financial sense.

This is exactly what I have been saying in how the UAW has been the benefactor of the chicken tax, not the US truck makes because it certainly did not deter foreign competition ......

It protects US manufacturers from foreign built competition. Any manufacturer that builds trucks in the US has an automatic 25% advantage over foreign competition. If prices didn’t go down when foreign makers started building in the US it was because they are keeping the extra profit, not passing it along to consumers. This allows the domestic makers to keep their prices up as well. Win win for the truck makers, same old for the consumer.