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Japan auto companies triple Mexican pay rather than move to US

asia.nikkei.com

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Re: Japan auto companies triple Mexican pay rather than move to US

#51

Post by yoloswagins »

microcolonel wrote: post #43
mhb wrote: post #37

Earlier quoted context omitted.

Yes. Of all the people considering buying new cars, there are some at the margin of buying or not buying.

Beyond that it seems more than reasonable, when the average cost of a new vehicle is in the 30k range or whatever it is these days, a difference of 500 or 1000 dollars like the parent comment gives as an example is a solid couple or few percent of the cost of the vehicle, almost by definition that will make or break around the same percentage of sales.

If you finance the car, that extra cost about extra ~$10/m

Re: Japan auto companies triple Mexican pay rather than move to US

#52

Post by throw_away »

wolfgke wrote: post #44
awakeasleep wrote: post #38

Earlier quoted context omitted.

Anyone else a 'robotic automation takeover of all jobs' skeptic? There are obviously places where it makes sense, but a $15/hr human is preeeetty cheap compared to the price, programming, and maintenance of a robot. Seeing the quote from Yukihiko, I feel it reads like PR or a soothing word to stockholders who hate to hear about employees and wages

> There are obviously places where it makes sense, but a $15/hr human is preeeetty cheap compared to the price, programming, and maintenance of a robot. But such a robot is a good insurance against further increases of minimum wages.

Cynically: you don't even need a real, working robot in-hand in order to threaten minimum wages. Even cheaper.

Re: Japan auto companies triple Mexican pay rather than move to US

#53

Post by NikkiA »

AnthonyMouse wrote: post #50
NikkiA wrote: post #48

Earlier quoted context omitted.

If wage is the only cost, sure. But it's not, and hiring a mexican metalworker at $16/hr is still cheaper than hiring an american metalworker at $16/hr

But is it cheaper than hiring an American metalworker at $8/hr? It also makes American workers start to ask questions about why it's so much cheaper to pay a Mexican worker "the same amount" and whether or not the things that money buys are worth what it's costing them.

The problem is that the $16/hr is an attempt to say 'not mexico!' without being discriminatory, so it doesn't say 'non-US workers at $16/hr' it says, essentially 'workers must be paid $16/hr or more', and the result is you'd have to pay US workers $16/hr to meet the same criteria, or else cars produced 100% in the US would fail to be legal.

Re: Japan auto companies triple Mexican pay rather than move to US

#54

Post by AnthonyMouse »

erikw wrote: post #6

Wow, this should at least provide for some very interesting natural sociological experiments. For context, I make less than this as a software developer in Chile, and still have no problems saving and living a comfortable lifestyle. This is going to significantly impact the lives of folks working in these factories, and it will be interesting to see how it will affect the individuals, their communities, and the quali…

That's assuming it lasts. When you already have a factory in Mexico and now you have to pay them $16/hour, it makes little sense to immediately move it back to the US just in order to save $0 by paying US workers $16/hour instead.

But the next thing that happens is that it becomes more cost effective to automate, so you start considering that. Then you don't employ as many people, and they become skilled workers who maintain high tech robots instead of unskilled workers turning wrenches, so you're not actually paying unskilled workers $16/hour anymore.

Meanwhile the automation requires retooling, and maybe then you evaluate whether to retool the existing factory or to build a new one in a place with more skilled workers who can maintain the robots.

In year zero you just raise wages for the existing workers. In year two or five or ten, something else happens.

Re: Japan auto companies triple Mexican pay rather than move to US

#55

Post by BurningFrog »

tom_mellior wrote: post #33
microcolonel wrote: post #21

Earlier quoted context omitted.

It's kinda two ways. It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year), reduces labour demand, and erases more low-skilled work; but those who do get the jobs may be paid more than otherwise, until the numbers expire.

> It raises the cost of automobiles (that's why analyses project a reduction in automobile sales by a bit over a million vehicles per year) What do new cars cost in the US? Does a price difference of $500 or $1000 really make someone say "all right, I'd rather do without a car"?

Yes, when prices rise, demand lowers as a continuous function.

It's not like nothing happens until it's an $800 difference and then there is "quantum leap" change.

Re: Japan auto companies triple Mexican pay rather than move to US

#57

Post by AnthonyMouse »

NikkiA wrote: post #53
AnthonyMouse wrote: post #50

Earlier quoted context omitted.

But is it cheaper than hiring an American metalworker at $8/hr? It also makes American workers start to ask questions about why it's so much cheaper to pay a Mexican worker "the same amount" and whether or not the things that money buys are worth what it's costing them.

The problem is that the $16/hr is an attempt to say 'not mexico!' without being discriminatory, so it doesn't say 'non-US workers at $16/hr' it says, essentially 'workers must be paid $16/hr or more', and the result is you'd have to pay US workers $16/hr to meet the same criteria, or else cars produced 100% in the US would fail to be legal.

That's assuming corporations are too dumb to figure out how to get their other costs counted as part of the $16/hour.

For example, one of the major costs in the US is employer-subsidized health insurance, and employers subsidize it because it's tax advantaged. If they instead paid the employees more only to have the employees use the money to buy health insurance, the employees would pay more taxes. But they could still do it -- pay more and then offer a health plan with no employer subsidy. And then they're paying you "$16/hour" even though you lose half of it to health insurance premiums (and then even more to tax).

And if that got people asking why they pay tax on their health insurance when they buy it themselves, or why health insurance costs so much in the US, all the better.

Re: Japan auto companies triple Mexican pay rather than move to US

#58

Post by cmxch »

ksk wrote: post #29
gurumeditations wrote: post #8

Earlier quoted context omitted.

Exporting working class jobs from a higher cost of living area to a lower cost of living area is on the whole a loss for the vast majority of people who are not wealthy and a gain for those who are wealthy. It’s a blatant wealth transfer from the masses to the wealthy few. So Americans get cheaper cars but no way to pay for them, and wealthy Americans get record levels of wealth. Globalism is a sham and it’s surprisi…

Well, nobody is "owed" a job. Markets transform and respond to pressures. When you operate in a saturated market like the US the only line item on the balance sheet that is easy to tackle is labor costs, not revenue or profit. Your customers aren't going to buy products from you because you gave a raise to your janitor instead of replacing them with a roomba (relax, its a joke :P). The China/Walmart economy is here t…

So what do you do for those that end up on the wrong side of the equation, especially those who have been there for a long time?

Re: Japan auto companies triple Mexican pay rather than move to US

#59

Post by phasnox »

erikw wrote: post #6

Wow, this should at least provide for some very interesting natural sociological experiments. For context, I make less than this as a software developer in Chile, and still have no problems saving and living a comfortable lifestyle. This is going to significantly impact the lives of folks working in these factories, and it will be interesting to see how it will affect the individuals, their communities, and the quali…

You are getting payed less than $16/hour?? As a software developer? Man you are getting ripped off.

My advice is to seek for opportunities overseas, or even in your country. For context I live in Ecuador.

Re: Japan auto companies triple Mexican pay rather than move to US

#60

Post by hourislate »

thisisnico wrote: post #45
hourislate wrote: post #26

Earlier quoted context omitted.

>it's kind of satisfying to see these policies have the opposite of the intended effect This policy is actually doing exactly what it is suppose to. It is preventing more auto manufacturers from moving operations to Mexico or Canada where labor and Exchange rates are more favorable. GM, FORD, Toyota, Honda, Chrysler all had their eye on moving more production to Mexico, this new agreement probably stops that. I don't…

Nothing is moving to Canada, there had been a pretty big exodus from Michigan and Ontario to Texas and Mexico after Nafta. They’re still closing plants in Ontario and moving them to Mexico. 16$ an hour is less than what they pay in Canada. Source: I work for a supplier in the Automotive Capital of Canada. These comments are so egregiously false.

>16$ an hour is less than what they pay in Canada.

It's the equivalent of 16. USD. So around 22. CAD?

I agree, nothing is moving to Canada (comment was more aimed at Mexico)I guess since you work for a supplier you heard of FORD probably closing down their Oakville Assembly plant since they are not assigning any vehicle production to that plant after they stop making the Edge and the Lincoln equivalent.

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