4 ms·

It wasn't just this though. Japanese (and later other far eastern countries') cost of labour was far lower, so they could build a better product at a lower pric

It wasn't just this though. Japanese (and later other far eastern countries') cost of labour was far lower, so they could build a better product at a lower price point than American manufacturers. That's not to say that lack of focus on quality and overly-aggressive cost-cutting by Ford and others wasn't a problem - it absolutely was - but the article is substantially oversimplifying the situation. I haven't yet come to a conclusion as to whether that's forgivable in its pursuit of making a bigger point: The Spectator does have a tendency towards superficially high-minded but ultimately ineffectual chatter (which at least fits with its name).

DebtDeflation 3y ago
The period from 1973-1983 was known as the "Malaise Era" for US Automakers: https://en.wikipedia.org/wiki/Malaise_era https://en.wikipedia.org/wiki/Malaise_era The issue wasn't mainly labor costs, it was a combination of new emissions regulations and rising gas prices along with US Automakers refusal to adopt fuel injection instead doggedly clinging to ever more complicated iterations of the carburetor (the computer controlled carburetors of the early 1980s with their rats nest of wires and vacuum hoses reached peak Rube Goldberg status). Meanwhile, Bosch introduced fuel injection in 1973 and within a couple of years FI was standard on most European and Japanese cars; US automakers waited a decade to adopt it en masse.
- ryandrake 3y ago
  Aviation is even more doggedly clinging. You can still buy brand new airplanes with carburetors. The industry is being dragged kicking and screaming into the FI era, and we're also starting to see electronic ignition and even FADEC systems emerging, mostly in the Experimental category.
hodgesrm 3y ago
> The Spectator does have a tendency towards superficially high-minded but ultimately ineffectual chatter (which at least fits with its name). The article draws rather thinly supported conclusions about SV from the collapse of Silicon Valley Bank. Yes, the bank failed but so did others like First Republic, and for similar reasons: interest rates went up and left them holding low-interest bonds that undermined their balance sheets. This is plain old bad management. The Fed response is similarly explainable by fear of contagion. It would have been a stronger argument if the Spectotor pointed out that many large VC-funded firms look like pyramid schemes. Wework and Uber are two obvious examples, along with numerous recent database IPOs--firms that still have no clear route to profitability. Not only that, prominent VC firms seemed to double down on the strategy, as evidenced by A16Z funding Adam Neumann (again) after Wework. [0] [0] https://a16z.com/2022/08/15/investing-in-flow/ https://a16z.com/2022/08/15/investing-in-flow/ Edit: typo

DebtDeflation 3y ago

The period from 1973-1983 was known as the "Malaise Era" for US Automakers: https://en.wikipedia.org/wiki/Malaise_era https://en.wikipedia.org/wiki/Malaise_era The issue wasn't mainly labor costs, it was a combination of new emissions regulations and rising gas prices along with US Automakers refusal to adopt fuel injection instead doggedly clinging to ever more complicated iterations of the carburetor (the computer controlled carburetors of the early 1980s with their rats nest of wires and vacuum hoses reached peak Rube Goldberg status). Meanwhile, Bosch introduced fuel injection in 1973 and within a couple of years FI was standard on most European and Japanese cars; US automakers waited a decade to adopt it en masse.

ryandrake 3y ago
Aviation is even more doggedly clinging. You can still buy brand new airplanes with carburetors. The industry is being dragged kicking and screaming into the FI era, and we're also starting to see electronic ignition and even FADEC systems emerging, mostly in the Experimental category.

hodgesrm 3y ago

> The Spectator does have a tendency towards superficially high-minded but ultimately ineffectual chatter (which at least fits with its name). The article draws rather thinly supported conclusions about SV from the collapse of Silicon Valley Bank. Yes, the bank failed but so did others like First Republic, and for similar reasons: interest rates went up and left them holding low-interest bonds that undermined their balance sheets. This is plain old bad management. The Fed response is similarly explainable by fear of contagion. It would have been a stronger argument if the Spectotor pointed out that many large VC-funded firms look like pyramid schemes. Wework and Uber are two obvious examples, along with numerous recent database IPOs--firms that still have no clear route to profitability. Not only that, prominent VC firms seemed to double down on the strategy, as evidenced by A16Z funding Adam Neumann (again) after Wework. [0] [0] https://a16z.com/2022/08/15/investing-in-flow/ https://a16z.com/2022/08/15/investing-in-flow/ Edit: typo