| Subject: Re: Hypothetical... Purely Canadian Car Industry / think out of the box |
Author:
Dennis Laurie
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Date Posted: 00:22:47 03/17/03 Mon
Author Host/IP: 098.216-123-194-0.interbaun.com/216.123.194.98
In reply to:
Margo
's message, "Re: Hypothetical... Purely Canadian Car Industry / think out of the box" on 14:41:03 03/14/03 Fri
Margo,
I appreciate the time you took to respond to my points. I do have a few comments though.
You respond to many of my points by bringing up the subsidies asked for and given to the existing, foreign-owned car manufacturers. I make no attempt to defend these at all. I am not in favor of corporate welfare generally and I disagree with giving subsidies to car companies, especially ones the likes of Ford. So really, your raising this point on numerous occasions does nothing to refute my stance, though it brings up an interesting government policy that should be examined currently. I have no hand in what our current Liberal government does, and with you, I disagree with a few things to say the least.
When I speak of financial incentives, I am not speaking about anything to do with government; I am speaking about the offers the new Canadian Company would have to make to lure skilled workers, designers, promotion and advertising personnel, and executives away from the Big 3 and other well established firms that are currently able to give financial incentives to potential employees (whether through gov't subsidy is another matter). Unless you can think of a way around this problem, this adds to the high start up costs that will be transferred to consumers initially and, when added with other start up costs I have outlined and you have failed to address, would likely push up the price of our new cars to a prohibitive level.
Now, I freely admit that I do not "know" all of what I say to be true, but upon cursory economic and market analysis, the start up situation seems like it would be much like how I describe. If you or anyone else can substantively refute my prediction and give an alternative, realistic economic outlook, by all means, please do. I'd like to see it.
As I'm sure you know, NAFTA is not perfect. It always eems that there are ways the US finds around things, and uses loopholes built into the system. However, access to a market is one thing, success in a market is entirely a different matter, one that is independant of access. The way I'm, looking at it, it seems to me that unless we produce a substantively superior product (which we may, we are quite a country) AND produce that product to sell at prices NO HIGHER than comparable vehicles in today's or tomorrow's markets (which, given the circumstances which I have outlined makes unlikely or very difficult in the short or medium term), we will not be competitively successful in any market other than our own, and debatably so in our own.
The success of the Asian firms were based on an ability to produce smaller, lighter, more efficient vehicles at a lower cost to US and Canadian consumers than the massive boats being produced by US firms. The situation is much different now. Their success came in a massively different market reality; the concern now is that they are eminently competitive now.
You take my positions regarding a car company and twist them to say that I advocate producing nothing?? No. If we can produce things that are better and cheaper than others, or that are competitive quality-wise and cost-wise, we should. And we do. It is simply my opinion that at this time, starting a car company is not economical. If private individuals wished to try, I would cheer them on and hope for success. I would be absolutely opposed to government subsidies of the company, as I am to current car company subsidies. If Canadians did this, I would hope all the success for them, but they would be no more deserving of corporate welfare than any other company in my view. As I stated, I would not be optimistic about their chances of being economically viable or competitive anytime soon. By the way, NAFTA is not about competing in the "world market", it is about competing in the American market (Mexico to a lesser extent). As I said, access is one thing, true competitiveness and success are other matters. Where do I say NAFTA is our ticket anyway?
As for the Canadian railways... what possible twisting of my thinking could lead you to believe that I would think that? At the time, a national railway system was needed, so it was built. Was there an existing one? No. Was there a competitive market to break into? No. Very different situation. Thank you for putting words into my mouth, I appreciate it greatly.
The fact remains, you assailed my position without refuting any part of my foundational economical argument; really, that's all my argument is based on. You tried taking my argument in many different directions, inserting criticism that was valid in some cases, but you did not even attempt to argue the economic rationale of my position. Do that, and perhaps you'll change my mind, or have any effect on my thought processes the next time you try to put words in my mouth and thoughts in my head, or try painting me as an ardent, irrational pessimist.
Nice try though, thanks for coming out.
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