Tariffs for car parts

[gary1101]

This shows how many times just one car part can cross the border getting charged each time it crosses. This happens with many many other components.

[wdfifteen]

That seems terribly inefficient. What happened to Henry Ford's vertical integration plan? He even owned the sources of raw materials.

[Arizona_928]

And that’s why gm is BS.

All of this can be done in America.

[Sooner or later]

Here is the article. They also talk about an automobile transmission. I can't vouch for the accuracy.

https://www.wsj.com/business/autos/track-one-car-parts-journey-through-the-u-s-canada-and-mexicobefore-tariffs-7c0d5dcb

[Arizona_928]

I know a gm guy who is at a tranny plant in Detroit. They make all the gears in house and final assembly. I’m not sure about the cases, gaskets or clutch packs. They have a sister plant in Mexico that does the exact same function.

[oldE]

I suspect if one checks, the smelter which produced the aluminum was in Quebec or British Columbia.
We have spent decades integrating production for economic advantages. Every time you maximize for one variable, something else is diminished.

Best
Les

[wdfifteen]

Originally Posted by oldE

I suspect if one checks, the smelter which produced the aluminum was in Quebec or British Columbia. …

Best
Les

Yes. Smelting aluminum takes a lot of electricity and Canada has a lot of cheap hydroelectric power. My Canadian friend refers to his power company as “Hydro, as in “our hydro bill was up this month.” Around here we should say, “Our coal bill was up this month.”

[Alan A]

Originally Posted by wdfifteen

Yes. Smelting aluminum takes a lot of electricity and Canada has a lot of cheap hydroelectric power. My Canadian friend refers to his power company as “Hydro, as in “our hydro bill was up this month.” Around here we should say, “Our coal bill was up this month.”

When they all stop being computer programmers coal should get cheaper again.

And no that’s not a dig at coal miners. Those guys actually work for a living.

[juanbenae]

My buddy who owns a shop here locally that would be a perfect PARF cheer boy is super pissed about the increase in parts costs, the less predictable supply chains and how it is affecting his business. Suppliers are attaching greater cost in advance of the tariffs that seem to be on & off currently. Prices never go down right? Even when this is "worked out" we will be paying more...

[Bill Douglas]

I bet Hyundai don't do that.

[cockerpunk]

Originally Posted by allan88

Absolutely not necessary

the market says otherwise.

the reason this happens is because its cheaper. pure and simple. to get rid of it, will make it more expensive, pure and simple.

we can do everything in the US, except for the raw materials. but 1. we dont have the raw materials in some cases, and 2. everything will cost more.

no free lunch. this isnt magic, its basic math.

[cockerpunk]

Originally Posted by Bill Douglas

I bet Hyundai don't do that.

most south korean industry is very interesting. if they are anything like samsung, they are extremely well vertically integrated ... more importantly, functionally a subsidiary of the government.

so they have different pressures, and huge advantages in terms of being able to integrate with and use political power in a way no American company can. its very difficult to beat both their competitive market advantage, *and* the fact that they are basically nationalized/socialized and thus have the power of the national government on their side

[Paul T]

Originally Posted by cockerpunk

the market says otherwise.

the reason this happens is because its cheaper. pure and simple. to get rid of it, will make it more expensive, pure and simple.

we can do everything in the US, except for the raw materials. but 1. we dont have the raw materials in some cases, and 2. everything will cost more.

no free lunch. this isnt magic, its basic math.

Correct, and Americans are addicted to cheap crap.

[cockerpunk]

Originally Posted by Paul T

Correct, and Americans are addicted to cheap crap.

im not sure cars fall under the term "cheap crap"

it wont be any less crap made in the USA either, in fact it will probably be crappier, and cost more.

thats what the market does.

[Paul T]

Originally Posted by cockerpunk

im not sure cars fall under the term "cheap crap"

it wont be any less crap made in the USA either, in fact it will probably be crappier, and cost more.

thats what the market does.

I agree, I was being a bit flippant...but it is true though that the average person these days would rather buy a cheap widget and replace it every few years, rather than spend 2-3x as much for a better made widget that may last a lifetime.

[cockerpunk]

Originally Posted by Paul T

I agree, I was being a bit flippant...but it is true though that the average person these days would rather buy a cheap widget and replace it every few years, rather than spend 2-3x as much for a better made widget that may last a lifetime.

:shrug: thats what the market wants. and what the market wants, it gets.

[Bill Douglas]

Originally Posted by cockerpunk

*and* the fact that they are basically nationalized/socialized and thus have the power of the national government on their side

Yeah, someone fairly much in the know said in South Korea the government gives them free use of new purpose built building plus free electricity and tells them to make money for the country. Not exactly an even playing field.

[Sooner or later]

Originally Posted by Arizona_928

I know a gm guy who is at a tranny plant in Detroit. They make all the gears in house and final assembly. I’m not sure about the cases, gaskets or clutch packs. They have a sister plant in Mexico that does the exact same function.

I thought the GM transmission plant in Detroit closed a few years ago.

[Shaun @ Tru6]

A little different situation, 2 of my Canadian customers have told me they will have to pay an additional 25% for my work on their parts. I think we can get around that because it's repair but they want them done immediately.

[3rd_gear_Ted]

Originally Posted by Sooner or later

I thought the GM transmission plant in Detroit closed a few years ago.

If it did it was a due lack of productivity in the plant compared to the one in Mexico.
They were equal parts of the same worldwide supply chain that uses economics of scale to move all those parts around the world relatively cheap.