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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (58471)	4/11/2008 1:58:39 PM
From: TimF	Respond to of 543184

The American car companies had a cost structure that made sense as long as they dominated the market. Even after the Japanese cars started coming in, they still sold a lot of those big cars, but they no longer dominated the market, and with union labor, and large contracted costs for health care for retirees it was hard for them to cut costs. The costs they could cut, things like quality control and R&D, are exactly the type of cuts, that you don't want to make when your facing tough competition. Certainly part of the problem is that the American companies where reluctant to make small cars (and often the small cars they did make where not very good, and not very profitable), so I agree with you there. They needed to make the small cars and the big cars, but they really struggled with the former. And then the Japanese started producing and exporting bigger cars, challenging more of the market.