Saki GT

So I read this passage:

[QUOTE]Voluntary Export Restrictions and Nissan

no_really

it sounds like it was for the benefit of Japanese makers as much as US brands. Remember that the American economy in the early 80's was suffering from severe inflation and sky-rocketing interest rates. Most Japanese imports at the time were vastly inferior to many American offerings, but were ridiculously cheap. If the American car manufacturing sector collapsed, so would the entire economy, and who then would be buying the Japanese cars of today? What would have driven the Japanese manufacturers to improve and innovate? Without the American market, none of the major Japanese manufacturers would be making the quality products they make today.

All countries need to balance imports and exports, The US has traditionally been rather enthusiastic about opening markets to foreign competition without demanding reciprocation, which IMHO hurts the American worker far more than it benefits the American consumer (if those two can be separated theoretically). If the product of American labor is not exportable due to restrictions in other countries, but we import liberally, this country is effectively shipping our economic resources across the border. It makes more sense to base import restrictions on need rahter than greed - we already have a thriving auto industry, so it is kind of silly to insist that we give equal market access to foreign auto makers. On the other hand, this country really doesn't have a "weak area," so if we effectively cut of our markets from foreign competition because we don't need their products, we can't really expect other nations to welcome our exports. and exports are mandatory to help anation grow and improve.

WarrenW

So, basically, American cars are soooo poorly made that Detroit had the Fed Gov't impose limits on how many foreign cars can be imported into the US?

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Stunts like that will KEEP ME from buying American cars. Reminds me of what the Big 3 did to Preston Tucker.

Warren

Kicker

GM Ford and Chrysler sure shot themselves in the foot. It is no wonder why today's car buyers are purchasing Toyotas Nissans Hondas and BMWs.

Spartikus

You know, before people started countering your rice humping point of view you seemed like a decent person. Act older than your S2ki age please.

Kicker

He has a point. What would happen if there was an embargo against other non american products? How devastating would that be to our economy in todays business climate when everything is made overseas?

no_really

who has a point?

What the article is talking about is far from an embargo. It was merely a limit on imports. As has been stated, the US imports many products. Not because the foreign imports are better made, but because they are cheaper. If the US restricted imports to a greater degree across the board, it would hardly be devastating. Jobs lost in the importation sector would be gained in every other sector of the economy. But foreign nations would be even mroe restrictive on accepting our exports.

If the US greatly restricted Japanese imports across the board, and greatly cut back on the amount of manufacturing allowed in foreign-owned factories, the Japanese economy would suffer far more than the US economy. In the big picture, the US would suffer a bit and lose the Japanese market for our goods and services, but overall, we'd be better much off than Japan. But we don't live in a vacuum, and in the long run, destroying Japan's economy for the benefit of our own would probably not be in the interest of world peace.

Countries like Japan and Great Britain have always been more aggressive about protecting home markets than the US. Before Warren gets too excited, he should consider that the Japanese even today greatly restrict US imports, especially autos. Why would they do that if their own products are so superior? It's to protect their own industries.

In the early days of Japanese auto imports in the US, the cars were incredibly cheap compared to the domestic offerings. People bought them because that's all they could afford. The choice they faced was a brand new Japanese car or a ten year old American car. Obviously, the new car would be cheaper in the long run, even if it was inferior to a new American car of the day. The reason for limiting imports of Japanese autos was not because the cars were so superior, but because the pricing was so much lower due to lower manufacturing costs overseas. With such a disparity in costs, it made no sense to allow Japan to dump as many cars as it could churn out on the US market. Even today, you can't really argue that there is a level playing field for American manufacturing if you let foreign competitors operating under much less restrictive and costly conditions to flood the market. There needs to be a method of ensuring that our domestic manufacturing industries are able to compete domestically, because there will always be cheaper places to manufacture.

Saki GT

Hey, this was 25 years ago and only lasted for four years - its not current at all, I'm just wondering how it changed things.

Japanese companies were gaining market share because US companies had no product the public wanted, courtesy of high gas prices. The VER limited the supply of Japanese cars and drove prices up, so everyone got rich, but while the Japanese companies used the money to make better cars, did the US automakers sit back, make a few stop gap products, and then just enjoy the profits?

If the VER didn't go into effect in the 80s, would it have just led to the market share division we have today a lot sooner? Would cars be as good as they are today?

vader1

I think the most ironic thing is that the US industry has not caught up in many aspects 25 years later. Especially in the small economic segment which was the main problem 25 years ago.

The Japanese learned to play in our backyard with big cars, trucks and suvs, and has completely taken the family car segment. We've improved our own cars over time but have been passed in other areas and continue to always be playing catch-up. And NEVER gave any real thought to small economic cars.

What happens? More layoffs and billions lost. Those who ignore history are doomed to repeat it. The big three reap what they sow.

Its mind boggling, especially since many of the people who work at the top of the ranks at the big three were around to see what happened to them in the eighties.

Saki GT

This was GM's answer to small fwd cars in 1982:



The a-body was used in various (very similar) iterations all the way through 1996!



Meanwhile, in 1982, Honda had this Honda Accord:



Not much to look at, but it had momentum on its side from its cheap price and fuel economy.

Then we got the revised 1986 model:



...and revised again in 1990:



...and again in 1996:



So, GM's new Olds in 1996 was the 1997 Cutlass:



It was produced for three years before GM axed. it... I think its interesting to look at how cars and automakers evolved during the 80s.