For most of these plants, however, the differences are relatively slight, particularly given the large labour cost differential between Mexico and Canada (and the U.S.). Among the newer or recently remodelled assembly plants with lines of annual capacities of over 100,000 units (DCX Toluca, DCX Saltillo, GM Silao, GM Ramos Arizpe, and Ford Hermosillo) only at DCX Toluca were HPV more than 50% greater than at the most comparable U.S. or Canadian plants. Moreover, the DCX Toluca plant was producing a much wider variety of products than its U.S. counterpart as well as undergoing a major model changeover in 1999, which explains a large part of the difference with U.S. facilities. Similar, although less dramatic, differences in product mix also explain a portion of the differences in HPV between the larger Mexican facilities and their U.S. counterparts. Nonetheless, most of the difference is probably due to the deliberate use of more labour intensive methods of production to take advantage of lower Mexican labour costs. For example, in the bodyshop of its Silao plant, GM is reported to be using only 80 robots, and then only for tasks that are mandated by quality or safety concerns, while its factory in Janesville, Wisconsin uses 600 robots.110 With such low labour costs, it is to be expected that OEMs operating in Mexico will choose to use greater labour per vehicle than in higher labour cost environments, such as Canada and the U.S.
They don't use as many robots in Mexico. Those employees are working hard. Probably harder than you have to work as you type all day and shill for slave labor.
posted on 09/04/2007 7:07:58 PM PDT
In practice, however, these observed aggregate productivity differences are of little economic significance.
Yes, you can use more, cheap, low productivity labor for the same cost. Like I said before, thanks for proving my point.
Nonetheless, most of the difference is probably due to the deliberate use of more labour intensive methods of production to take advantage of lower Mexican labour costs.
I wonder if the lower labor costs are related to their lower productivity? I'm glad they hire more workers than they need, to prevent the revolution.
Your original point was about sweatshop workers. These auto workers are pretty far from sweatshop workers, don't you think? Or should we not buy cars from Mexico, because it's a "sweatshop region"?
Those employees are working hard.
Harder than you work typing your economic ignorance.
posted on 09/04/2007 7:18:32 PM PDT
(Ignorance of the laws of economics is no excuse.)
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson