Originally Posted by Atlanta Dan
IMO the wage differential is a red herring, although the U.S. creates a competitive disadvantage for manufacturers with its ridiculous system of providing inefficient and overpriced health insurance coverage (at least for some) exclusively through employers.
I am pretty confident your average German autoworker makes at least as much as your typical UAW employee of GM, Ford, and Chrysler while BMW and Mercedes have no problem selling their products in the States.
My last domestic manufacturer American car was a Pontiac Phoenix (from the GM "X" car line that was probably rock bottom for quality, featuring an automatic tranny on my car that failed at 45,000 miles) and I have never regretted my subsequent purchases, one of which was an American made Acura. The domestic automakers problems are lousy cars and terrible management; they gave up trying to market cars and decided to make $$ exclusively on SUVs and trucks. Now the bottom has fallen out of the SUV market while the Japanese manufacturers have the lead on hybrids as the U.S. manufacturers have spent the last 20 years lobbying Congress to keep the lid on increasing mileage standards.
If U.S. manufacturers cut wages they still would have the same problems with quality and unappealing designs; the layoffs need to come in the executive suites.
I wasn't really looking to get involved, just see what people had to say, but this response was interesting. How can wages be a red herring if the benefits are the culprit in the wages equation? The benefits are almost certainly what make up the difference, and at least some of those are union enforced benefits that aren't necessary.
I also thought the thing about the German cars was interesting. I wonder if it's a cycle that we just haven't been through yet? If you read Consumer Reports, or, better yet, talk to people who would know (owners of the cars and the people who work on them), the quality of Mercedes and BMW's has dropped significantly over the last 10 years or so, but they have achieved such status that they are still able to command premiums. I bet, however, that brands like Lexus and Acura are eating away at their market share as well. Could the US manufacturers do to the Japanese what the Japanese did to them and the Germans?