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To: Willie Green

That's an interesting theory, Willie. But the odds of busting the cartel are rather small. The last successful new entrant came out of the Second World War -- and other new entrants since then, even in the USA, had to merge to survive (Jeep), like many of the old firms, or died miserable deaths (Tucker, DeLorean) because they couldn't get over the economic barriers to entry -- things like staggering tooling costs, building a dealer network.

In Europe, where some new entrants were subsidized, they still didn't survive (DKW), or were forced to consolidate by socialist governments chasing false economies (everything in Britain). Even the nameplates of the mighty Soviet and satellite factories -- one of which, Tatra, made a world-class quality car -- couldn't survive.

Henry Kaiser couldn't manufacture a quality car for a fair price, even though he could build a Liberty Ship in four days. He gave up while he still had his shirt.

But -- consider a few foreign nameplates: FIAT, Renault, Citroen. They all thrive today -- with considerable subsidies from their EU homelands. And they do it without exporting to the USA (The French companies don't even have an office in America or Canada to sell parts -- they know their cars are all long since beaten in to Revere Ware. But I got an exhaust gasket for a '65 Mustang from a Ford dealer in Munich, no problem). What killed them was the same thing that led the US makers to a near-death experience: low quality in the face of international competition. They retreated to their homelands, where they don't have to face the big boys on the schoolyard.

Your argument is quite puzzling. You are against someone buying a Hyundai -- from a company that is a 10,000 lb gorilla in Korea but a weak sister here. Instead you favour "stronger anti-trust legislation to bust up the incestuous tangle of automotive 'partnerships'" -- well, why don't we start on GM and see how long its Divisions can survive on their own? GM and Ford certainly did more to suppress competition than any international combination ever did.

I have been fortunate to have friends all round the world, quite literally from Afghanistan to Zimbabwe. Most of these people want and admire certain American goods. We ship guns, guitars, computer software, airplanes (indeed, most of the small airplanes in the world are made here. The ones that aren't use American motors. When Russia opened her borders, her aero-engine companies mostly failed, and her factories build planes with American (and for jets, European also) engines. It was traumatic for the Russian engineers who had good jobs making overweight, fuel-inefficient motors, for sure. It's always a drag being a dinosaur when the small furry mammals start taking over. Now its ten years on and most of those guys are in better jobs than they ever dreamed having, facing the challenge of making stuff good enough to sell to the USA and Japan.

US leadership in any area of manufacturing or technology is not a given. It comes and it goes, and if we start acting cold-blooded and really large, somebody else will put that ice age juju on us, too. Look at all the industries in history that are gone with nary a ripple, from whale oil products to radio serial production. You can't even get a good job cutting wood for the corduroy road any more.

I think that you are clinging to a past that only existed for a moment, for a snapshot. The best way to get from New York to Chicago was the 20th Century Limited; there were about ten makes of car and you could tell by make and model exactly what the status was of the guy who met you in the station. Cadillac! Why, he's the boss, or the top salesman. Packard, he's probably the head engineer, unless it's a Clipper, then he's just an engineer. Ford, Chevy, Plymouth -- one of the worker bees. If he had a foreign car he was a weirdo, maybe an industrial designer... possibly queer.

As far as the consolidation of the global auto industry -- give it time. The bigger it gets, the more it resembles something ending in -saurus. If you look at the American companies that have innovated in the auto market, it has usually happened when their back was to the wall. What puts your back to the wall? Competition, that's what.

Same thing with airliners. Think Boeing's problems are because Airbus is subsidized? or because Boeing management is dumb as a box of rocks? (Hot tip: a subsidy makes a company move at the pace of government. Of course, in Boeing's case, that might be a step up).

d.o.l.

Criminal Number 18F


32 posted on 10/24/2004 7:15:36 PM PDT by Criminal Number 18F
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To: Criminal Number 18F
But -- consider a few foreign nameplates: FIAT, Renault, Citroen.

FIAT, Renault and Citroen (Peugeot) all exist primarily withing the Ford sphere of influence through a variety of other recognizable nameplates such as Volvo, Mazda and Nissan.

Ford owns Volvo.
Ford owns 33.4% of Mazda
Renault purchased 36.8% of Nissan Motor
Mazda has a mutual OEM supply agreement with Nissan for commercial vehicles.
Ford and Nissan jointly produce minivans.
Ford has formed a joint venture with PSA Peugeot Citroen to produce diesel engines.
Fiat now owns 52% of the joint venture, Iveco-Ford Truck U.K.
Peugeot and Renault own two subsidiaries: Francais Mecanique, which produces engines, and Societe de Transmission Automatiques, which makes mechanical components
Renault owns 20% of Swedish Motors in Thailand. Volvo owns 56% with the remainder held by Swedish Motors. Swedish Motors, in turn, owns 70% of Thai Chrysler Automotive Ltd., which builds Jeep Cherokees at a Thai Assembly Co. Ltd. assembly plant. DaimlerChrysler owns the remaining 30% of Thai DaimlerChrysler.

Of course, that last one gives a hint at how convolutedly incestuous the global automotive cartel has become. While Ford remains the dominant Big Five "partner" for FIAT, Renault and Peugeot, ties can also be traced to DCX, GM and Toyota.

It is the nature of a cartel, They are cooperating tather than actually competing.

36 posted on 10/25/2004 12:04:35 PM PDT by Willie Green (Hawkins/Tonnelson in 2004!!!)
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