Why Muscle Cars – The Original Ones – Still Rule

From Boothe: “What exactly do you propose to realistically turn this situation around?”
Some action, rather than more words. For instance, participation in jury nullification, http://www.fija.org,and the final Constitutional act – secession. If Texas seceded I’d move.

“Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them, and these will continue till they have resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they suppress.” – Frederick Douglass

Libertyx, I’ll go along with jury nullification and share fija’s tenets. The trouble is, the county summoned me for jury duty and then called me the day before I was supposed to show and cancelled. Then my wife was summoned, so I primed her with fija info and she actually went. When the judge made them all raise their right hand and swear to do what the judge told them to, my wife declined. Guess what? They made her wait until the end of the day, but sent her home. I’m a firm believer in the power of the jury. It would seem that the courts know who I am. It will be something like 5 years before I’m potentially called up again. Now I do inform people about fija and their right, as well as moral obligation, to judge the law as well as the facts. But most Amerikans I know will do anything they can to weasel out of jury duty. It’s a sad state of affairs to say the least.

Raising hand and taking an oath..wow that’s a new level. Last time I had to go to jury duty I called into a courtroom for the first time. Others got chosen for the box. Then the judge asked if they would do what he said. Right then and there I knew what were doing. It’s to flush out anyone who knows the real purpose of the jury. To be able to claim they ‘lied’ to get on the jury and then punish them.

I was summoned this year but my the letter of my last name meant I didn’t have to go.

BrentP “It’s to flush out anyone who knows the real purpose of the jury. To be able to claim they ‘lied’ to get on the jury and then punish them”

A jury of one’s peers is for the purpose of determining justice. An oath to do otherwise, is invalid. If a judge-imposed oath can be a qualifier, there is no need for a jury. (Judge: “I’ll give him a fair trial then take him around back and hang him”) Once seated, as a juror, and with no proselytizing to the other jurors – no one has been punished for their verdict.

Brent – I learned through trial and error that no matter how valid your points are in an argument, if you insult the other person, then all they will remember is the insult.

Once you take that route, you might as well go all in b/c the debate is over, it’s just a shouting match at that point so have some fun.

Heh, don’t forget they made VW classic beetles new in mexico until 2003, you just wouldnt be able to pass most inspections in the USA with them, due to a total lack of all the modern safety and hippie widgets.

From a product mix standpoint, why should there be such a stripper? Who’s going to buy it? When a stripped down base 6 cylinder maverick cost 1995 silver dollars, yeah, sure. Cars were expensive. Lots of human labor wrapped up in them. Today, not so much and what is is paid for at a much lower real rate. Having some niceties is pennies in the old money.

The increase in the money supply and the regulation effects different products differently. For cars they have become much higher content wise to appeal to the people who can still buy new cars.

I used to think that there should be these old style bare-bones cars, but as I learned more about product development, costs, manufacturing, and economics I see them as less and less a marketable product.

Even in a free market where our wages weren’t devalued there likely wouldn’t be a market for such decontented cars. Probably less. It would be just a few dollars to put them in the product. The automakers would do so to compete with each other just as they do now. The cost difference isn’t as vast. The equipment is a lower percentage of the car’s price.

As to average folks not being able to afford V8s, again, to me it is question of wages and government forcing the product mix.

If a current Mustang GT with all the base GT goodies and say all the safety that most people wanted to buy came to market at $1800 and people still had incomes to afford the old $2400 six cylinder mustangs, are they really going to want to decontent? The modern six would be about $1100 in silver money. The few people in the market that would cheap out in such ways are not numerous enough to be worth the trouble. The big cost jump would be the V8. The rest trivial.

My point is that the product is getting so much less expensive in real terms there’s no reason not to have the goodies. In real terms next year’s model offers more for less year after year. We just don’t see it because of government interferences.

We’ve gotten poorer. Dramatically so. The market has just worked so well in spite of the government that we don’t see it that much and actually are still largely better off. What we don’t see is where we would have been without the inflation and regulation.

I think cars would have all this safety and more without the government. We could afford more without government. I don’t think there would be much lamenting about days past either…

The problem is the number of BOMs and parts that have to be designed, engineered, maintained, VQC/QC, etc and so forth that making those options require. That’s all cost. Then things like power window regulators are made so cheaply they cost less than manual ones. Then there are all the different trim parts the manual regulators require vs. the electric. To sell you the car you want, you would have to pay extra for it.

Airbags don’t weigh much so I’d wager the weight is in structures of the car. Difficult, impossible really, to make optional.

The only way to produce it economically would be as a separate stand alone model that did not come any other way. Now the question is there a market for it? I would say under today’s economic pressures yes, but in the conditions of a free market that could give us such a car, I would say not one big enough.

On another note I have to use my right hand to shift so reaching over the car to roll down the window is a bit of a pain. I have to wait for a red light to do it safely.

I did not write airbags were impossible to make optional. I stated there is a cost associated with making things optional. Huge difference. Probably about $100K in tooling plus the carrying cost plus the design and development cost. It could easily be another 50K plus. At some point it’s just cheaper to make something standard and take a smaller margin on it if need be. Things are optional until their cost and popularity dictate making them standard.

How should an automaker get back $100K of cost for something that say, 10% or less of buyers of a particular model don’t get? How can that be recovered? Then consider that probably 8 out 10 of that 10% only didn’t get it to save money, not because they wanted a basic car for the sake of having a basic car. Can that 2% of buyers recover the costs in additional sales? What if half them would buy the car even if the item was standard? Now what? 1% of buyers. 100K to recover. How?

The LX 5.0 was not a decontented GT. It was an LX with V8. Until 1994 it was possible to order practically any mustang trim level you wanted with a V8*, often most any V8 in the line up. In 1969 you could order a base model dog-dished hubcapped hardtop with a 428CJ V8 under the hood. Very few people did (I think fewer than you have fingers). So if you see one in a barn, buy it. But back to the point, as the economics changed the base car was no longer offered with multiple engines and drivetrains.

Not being able to see internal ford documents I can only intelligently guess at why. My guess is that someone looked at the take sheets and started to see that would be uneconomical. Also the 1995 GTS (which really was a decontented GT) was a kind of a flop with only 6370 built and thus no such attempt has been made since then.

Also, 1985 was 27 years of productivity increases ago. The economics are different today.

*There were some special trim levels that were specifically 6 cylinder.

Eric, I’ll remind you I have been working as an engineer in product development for a good long time. Sure, not in automobiles but it is the same in every industry. There comes a point when a certain percentage of your customers want X, so to offer it as optional or have a delete option -increases- cost. There’s more to it than ‘a airbag costs $75 and there are two of them’ or whatever. (you can’t use part counter prices unless you want to divide them by 3 or 4)

For the air bag example I just did what it would cost to have a non-airbag cover for the passenger side dash and steering wheel. That’s about 100K in injection molds given the physical size of the parts. With some cheapening of the tooling at the expense of tool life that could possibly be brought down as well as tooling it in China, so if someone knows better feel free to shoot out a number, but in any case we are looking at a few tens of thousands. Then there is the engineering time involved, inventory costs, assembly, purchasing, additional BOMs, change notices, etc. It becomes a lot of money so a minority of buyers can escape buying something. The end result is that it ends up costing more per unit than just putting the airbag in.

There’s no government mandates for 6 speaker stereos you mention. No government mandate for power windows or power locks last I heard. None for power steering or even disc brakes. I could go on down the equipment list. How much is going to cost to make disc brakes an option? Tooling up various stampings and castings? For what? The 200 people who might buy a car with four wheel drum brakes if it offered at $100 less? Great. Spend $1000 (assuming the tooling engineering, etc adds up to only 200 grand) per car to sell the car at $100 less for a total loss of $1100 over just having the disc brakes standard assuming the part cost is a wash. Which it usually isn’t. The formally optional thing usually falls in price such that it is cheaper than what it replaced.

Manual window regulators given the tooling investment are I believe one of those things. The crank handles, trim pieces, etc all add up. The motor (hell the whole regulator assembly) comes off the shelf for a net cost of pennies per car, the tooling recovery on the manual system is in dollars per car.

If it is just the ‘fucking government’ and the cartel, please explain why I can’t go buy an atari 800 computer (or one like it) new off the shelf for the equal of what it sold for in 1982? Because productivity and customer demand moved on. I can get a new PC that runs circles around that technology for less in both constant and nominal dollars. If automobiles had beaten the fed inflation, almost impossible for mature product to do, there would be a lot less complaining. However it doesn’t. Your 1969 car of your choice would be ungodly expensive today if made just like they did in the day. There are untold numbers of people like myself, purchasing, sourcing, manufacturing, etc that fight the fed’s inflation every fucking day. If we are good and lucky we can -hold- price point in nominal dollars. If we scrap a design and start over we might be able to offer more for less nominal dollars.

Recently as the mid 80s? That’s like talking about those wonderful pre-war cars in the late 1960s or early 1970s. Lamenting that that you can’t buy a Ford with a simple flat head V8 any more. If only they would still make those ‘cheap’ 1940 cars again.

The reason teens and younger folks cannot afford the cars today is because of their income and debt slavery not because of the cars. I make product for a living I know what things cost to make. I can see how my ’12 is -cheaper- to make than my ’97. The fing floor mats are three or four grades below what came in my ’97. Even the ones I bought in the aftermarket for $100 aren’t as well made as the $30 option box I checked back in ’96. Although the aftermarket ones are a set of four instead of two..

Stuff isn’t more expensive. It’s cheaper. I can see most every corner that’s been cut. Where automation is used, where an expensive process has been cut out, where material substitutions were made. I make these same decisions and changes every work day. We are poorer. Gasoline in real terms is something like 12 cents a gallon and most of that is tax! Gasoline production and distribution makes it ever cheaper. And if it wasn’t a cartel it would be cheaper yet. The cartel in gasoline was created because free competition would have gasoline prices approaching -zero-. It would probably be something like 70%+ tax at the pump. We are poorer so things seem more expensive. We are being made poorer day after day after day.

My ’12 GT premium well optioned on top of that cost me less than $1600 in 90% silver US coin at yesterday’s close. That’s with all the government regulation costs and taxes. A stripper 6 cylinder hard top in 1964 cost $2395 list as I recall when the money was still 90% silver.

As I stated before, CPI is bogus, because CPI says that all the efforts of people to hold price point don’t count towards inflation. Only our failures to do so. The inflation still happened if we held price point or not. Real inflation is much higher than CPI. I use silver coin, it has its issues certainly but I believe it paints a more accurate picture currently than CPI. It shows the natural tendency of the market to offer more for less over time. The problem is we make and keep less. That’s the banker’s and government’s scam. Most people don’t notice they are being paid less in real terms so long as they can still buy the same stuff and when they can’t they’ll point at something else being to blame when it’s often a smaller factor.

Eric, I don’t see anyone in the automotive press that gets into the sort granular engineering detail I am referring to here.

The part is made by a supplier who adds on profit. It then goes to the manufacturer who doubles that price as a service part. To the distributor who doubles it again. to the dealer who doubles it again. This last price is what people think airbags ‘cost’.

And unless some engineer or sourcing person joins in and volunteers the real cost we cannot know it for sure. I searched for an SAE abstract to see what turned up and got $216 for a frontal airbag (assuming) including the control system in 2004. http://papers.sae.org/2004-01-0840/

At this point $75 per bag only (I should have specified or thought it through more, my error) is not unreasonable.

Here’s a little paper I found on lowering the cost of airbag ECUs:
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CE8QFjAE&url=http%3A%2F%2Fwww.fujitsu-ten.com%2Fbusiness%2Ftechnicaljournal%2Fpdf%2F18-4.pdf&ei=242_UPGzM8jUyQGGh4CABA&usg=AFQjCNEGCkJGLf4jvN1-qzZJdMXkbptYIg

It’s from 2002. It’s ten years old. I skimmed it. It looks perfect to illustrate the process I am talking about… right down to how they eliminated tapping holes in the case.

And as you say the whole thing is designed around them… and you want them to do it twice! Keep two sets of parts, two sets of engineering drawings, two different BOMs. That’s all cost. I was being generous with the $100K tooling to have two different set ups. It could easily be five times that.

However you seem to be replying as if I am defending the mandates. I am not. I am saying they aren’t much of a cost driver compared to where we would be anyway with just the inflation as most of it would have arrived in some more optimal form via the market. The government has never to my knowledge mandated a safety device that did not already exist on the market.

Everything gets cheaper and that includes muscle cars. More for less. Year after year. That’s the true market. The bankers skim all of that off the top through the currency!

A Muscle car designed with modern processes, materials, and so on but with nothing as far as equipment that didn’t reduce cost would result in well a very different car but one that would be half or less in cost and better. 2% compounding is doubling or in this case halving in 35 years rule of thumb. So that’s a decent baseline off the cuff calculation.

In constant dollars if you paid the same price today as forty years ago you should get roughly twice the car. All that government mandates do is force where a big hunk of that ‘extra car’ of stuff (or cash) goes. It’s the inflation that really makes it cost more.

I did not write you wanted airbags and neither do I, but we are in the minority as far as current market preference. But that’s neither here nor there as I am talking product engineering principles here, just using airbags as an example. I could use drum brakes again or stereos or anything else. The principles remain the same.

What the government mandates do is shape where the additional productivity goes. Maybe the free market would have picked roll bars and some sort of racing-like harness instead of airbags. However the principle of more for less would still be there. It’s a constant in the product development world.

Here’s a pre-regulation automotive example. The Phillips head screw. It is the original torque control/automation screw. It allowed auto manufacturers to increase productivity. Offer the same car for less. Henry Ford would reduce and combine parts, the whole assembly line idea is more for less. Increase productivity. It’s what the market does.

Let’s look at the model T. A car that remained in production on a decades time scale relatively unchanged except for process improvements.

http://en.wikipedia.org/wiki/Ford_Model_T
The standard 4-seat open tourer of 1909 cost $850;[33] in 1913, the price dropped to $550 and $440 in 1915. Sales were 69,762 in 1911; 170,211 in 1912; 202,667 in 1913; 308,162 in 1914; and 501,462 in 1915.[28] In 1914, an assembly line worker could buy a Model T with four months’ pay.[28] By the 1920s, the price had fallen to $260[34] because of increasing efficiencies of assembly line technique and volume.

From $850 to $260. More for less. From 41 ounces of gold to 12.5. Forty one ounces of gold for a Model T. What does 41 ounces of gold buy today?

The government regulation drives suboptimal solutions to problems. It costs more than it probably would otherwise, but it’s just a contributor. Think of it this way, if the price of everything on the car followed a standard 2% productivity increase, the car would cost 2% less. Rarely does an additional mandate for any particular year add that much. So why does it drive the price up? Because the dollar buys less. Because the bankers and government stole the productivity increase. The unseen. $400 for some mandate? Well the price of the $25K car went down
$500 on productivity increases… so more for less. But the dollar buys 5% less so the price has to go up 1250 for that. 1250-100 = MSRP increase of $1150.

Inflation is running multiples of the cost of the mandates. And nobody sees it in official studies and such because they use CPI. CPI which neglects productivity increases. So that 5% inflation is officially, 3%. The car went up $1150, but the buyer got the whatever so it calculates the car going up $750, or 3%. However, the actual increase to the buyer if he wouldn’t have bought the mandated item is $1250 (inflation) plus $400 (mandate), $1650. 6.6%.

I’m running out of ways of expressing this problem of proportion. The mandates don’t do much cost wise because they are a much smaller factor than inflation and we’d probably get something as standard in their place. Perhaps you’d get a supercharger instead? Or maybe an extra 100 cubic inches of displacement? Who knows. We’d get something and the MSRPs would probably go down gradually. The mandates only squander that something, turning it from what buyers want, brakes, superchargers, stereos, tv’s, 25″ rims, whatever into what the government and nannystaters want. The inflation drives the prices up.

I’m out of ways to express this.

Another engineer here. Just for airbags, a delete option in modern vehicles would not require new trim. All it would require is absence of the chemicals that explode to inflate the bag with nitrogen, along with any other parts, such as the bag itself, that are not required. The only problem with tooling and production is scheduling which auto would get which module, this is as logistically complicated and expensive as taking orders for radio options.

The real model cycle is as long or longer as it has ever been. In the 1960s the ‘cycle’ was ~two years but the car stayed much the same underneath. Today’s styling updates on the two year changes are much less radical than they were in the 1960s and early 1970s. Look at the 2013 change for Mustang. That’s much less radical than the 68 to 69 change or the 70 to 71 change.

Tooling stays around a lot longer than you think. For instance, Ford’s “new” 5.0L V8. Well it was designed around the machining centers and other tooling Ford built ages ago for the 4.6L V8. Probably for the 1991 model year when it was introduced. That’s already 22 years.

But here’s the thing about styling tooling, it pays itself off with increased sales. Making something that an overwhelming majority buy optional does not. The math works out very differently. Updated styling and new stuff (more for less) sells tens of thousands of units if not more. Not only that, it preserves -margin-. That tooling pays for itself.

If you want to make the same exact thing year after year after year you have to take less and less margin to keep selling it. It’s how the market works. Innovate or die.

This is the world I live in. Sit on your ass and your competition is going to hand it to you. What happened when old Henry took your line of thinking? Nearly ran the company into the ground. What saved it? Innovation. New stuff.

As to the ’69 Beetle, no you could not get one with a few updates for $6K. To apply all the modern manufacturing necessary to keep the price minimized you would have a totally different car. The beetle was designed in the 1930s. The 1969 version was over 40 years ago. A modern version would be nothing like it. Everything would require redesign, not for regulations, not even if we consider the market’s wants, just to make it cheaper.

Sure you could keep taking production to countries with cheaper and cheaper labor. But eventually that exhausts itself. That’s one of the things that killed US manufacturing. People wanted to resist change. To resist change, to do it the same way, to build the same thing the same way while others innovate means finding people who will do the labor for less.

A 1969 Beetle was ~$1800. This would make it about $900 in 90% silver US coin with no added features, just year over year productivity improvements at 2% compounding. This comes out to about $22,500 in today’s money at the current melt of silver dollars. To sell it at $6K or anything relatively close in today’s money you would have needed to beat the 2% year over year, probably relocating production to China or India. Using currency value differences and so forth to get there.

Let’s take a car which hasn’t really changed any more than was forced to. The Morgan. How much are they? They aren’t cheap by any means. Why? Because they are using old expensive techniques in the same place they always were.

Today it is -cheaper- to make a car than it was decades ago. The added stuff doesn’t even clear the year over year two percent. Electronics are a more obvious example because inflation isn’t as huge of factor. All the added stuff and the price in constant currency has dropped. It often drops in nominal currency.

It’s been over 40 years since 1970. It would take more than two 1970 cars worth of stuff just for a rule of thumb year over year 2%. All the ‘saaaaaafty’ is, is stuff. Don’t let emotions of what it is and how it got there get in the way… consider it just ‘stuff’. Is the modern car over two 1970 cars worth of stuff? No. So why do modern cars appear so expensive? Because we make less in real terms. Just on the basis of 2% yearly compounding productivity improvements the same person who could buy your 1970 car of choice new off the showroom floor should be able to buy -two- of them today and have some money still in his pocket.

There just isn’t a whole extra car of value in today’s cars. So where did the remainder go? Where did the cost on top of that go? The bankers. The government. The automakers certainly aren’t getting more margin these days.

All the mandates and market demands over the last nearly 50 years don’t add up to enough stuff to increase the price in real terms over what we started from with the year over year productivity increases pushing cost the other direction.

The mandates are the ‘seen’, I am trying to get you to see the ‘unseen’ here. The ‘unseen’ is the bulk of the theft. For all I know the mandates are just there to give us something to blame so we don’t see the real crime.

I forgot one thing, the T changed considerably over the years. All in ways only someone that creates product would notice. Just as modern cars do.

Check out the Tata Nano and it’s price.

https://en.wikipedia.org/wiki/Tata_Nano

Then see what it cost to get it into the U.S. or Euro market with all the mandated stuff.

Mexican labor + design changes + process changes + conversion from Mexico’s fiat currency to FRNs + 8 years of inflation ago.

CPI alone brings the that beetle to $8800

But back to the mexican beetle. This car was cost reduced via government decree. The car was actually degraded in quality to obey the law.

http://en.wikipedia.org/wiki/Volkswagen_Beetle_in_Mexico

So we are looking at a car that has some improvements, some degrading, various redesign and process improvements, cheap labor, etc and so forth. It’s not the same car. Not by any stretch.

But let’s take the 2% compounding figure of $900 in 1969 dollars… that comes out to be $5,672.62 in today’s money. With all the effort put forth to keep it cheap, all the productivity increases, cheapening of the quality, cheap labor, etc and so forth the beetle finished at $7000-$8800 in today’s money (there was a lesser model offered just before the last series).

I am being generous using CPI and the car is still more expensive than it should have been on manufacturing and production alone.

The model T is a better example because it’s entire production run was when an ozt of gold was $20.67 and there was no regulation or mandates.

The question is, where did all this extra cost go with the Beetle? If we are to assume that new equipment ate all the productivity increases (and it usually doesn’t), we still have $1400 or so unaccounted for. A significant percentage of the price. That’s about 25% of the original.

In the most generous analysis I can do, the buyer of these last beetles was ripped off somewhere to the tune of 1/4 of a beetle by something.

Well, if you’re going to be that way about it, when I try to do the most generous analysis for you…. well I’ll just do it in silver. Silver was ~6 ozt in 2003. So we are looking at about 1000 ozt of silver to buy a beetle, at 0.77 ozt per dollar, that’s ~$1300 in 90% US silver coin, which is $32,500 in today’s FRNs. Is this method better for you? Looks three-four times worse to me.

Things get -cheaper- over time. Human productivity increases. The bankers and governments -steal- that.

We would get more for less year over year over year. The new thing should always be cheaper and/or be better/more than the old thing was when it was new. Always. It’s a law of competitive markets.

You can bitch and moan about all the things that government mandates when maybe the automakers would have given you an extra 100 cid or motorized platform that dropped the engine and trans out for easy service or whatever instead of airbags and backup cameras but stuff is stuff… in the end the stuff of the mandates doesn’t surpass the productivity increases. The automakers can’t charge more than customers will pay either.

I don’t know why you are so hard pressed to stick with the ‘seen’ when the ‘unseen’ is a far greater indictment of the hideous system we live under. The more we go back and forth the more I am seeing these regulations and building codes and all the stuff that goes on capital goods to be a way of masking the inflation. To make for a scape goat. The math this getting me to do sure is showing it to me.

Something I also forgot earlier… tooling wears out and requires replacement eventually. There are also cheap tools one builds for for few thousand units and better tools built for hundreds of thousands of units or more. So tooling costs are ever present. Unless someone over-bought the tooling or something sells like crap there are always at least some tooling costs to pay for. Not to mention new tools that bring down part cost.

You obviously don’t agree with the unseen, because you keep ignoring the thrust of my argument and I am sick of repeating it.

You want a dodge dart exactly as it was built back in the day? Same amount of human labor? Same amount of material? Same processes? Go quote one one out, you’ll be shocked. There’s a reason Dynacorn makes their bodies in Asia you know. And there’s a reason why car manufacturers stopped making them that way that has nothing to do with government.

Found you something:

http://www.uctc.net/access/25/Access%2025%20-%2003%20-%20The%20Price%20of%20Regulation.pdf

Look at figure 2. Note the proportion of mandate vs. other.

It uses CPI for 2001 dollars, and it’s of course a bit dated. It also does not account for the thrust of my argument the year over productivity increases that drive price -down-. It assumes production cost of the base car is flat, as do you, it’s not, it moves downward as do all the new things as they become older.

‘other’ is approaching three times the cost of mandates. Now what is wrapped up in ‘other’? What about the fact that their totals are correct but that other should be even larger because the base area should get smaller?

I’m done. I’ve spent way too much time on this.

I’ve argued for many years, way longer than I’ve been participating here that regulation was to control choice. My argument here is cost, product life cycle, and product replacement.

In the next few years mandates, CAFE, is likely going to exceed the productivity increases. They want to crush the car market or they are getting delusional or both. There we agree. But that’s the near future. But I don’t believe it has on a 50 year long basis. It’s robbed us of who knows what. I think without them cars as a whole would be safer and more fuel efficient and cost less with demanding customers.

The issue with how products are developed and sold is that the plan is meet cost target X with list of features Y.

The most unregulated business segment out there is electronics. Nobody is marketing a modernized Atari 800 for $25. Now for nostalgia they did market a modernized Atari 2600 game system marketed for a limited time. the one I bought cost ~$25-30. But what’s out there? Far superior gaming systems and computers that sit in the same price point sweet spot they always did.

The productivity benefits go to product features and improvements without government being involved. So my view is that these things replace other things we may have gotten. They narrow our choices but on cost… it doesn’t change things much. People will only pay X for a car. Whatever goes in that car can’t exceed Y*X, where Y is the fraction of the selling price that it cost to build the car.

Government could mandate a $100,000 gizmo. Very few cars would be sold after that. Government doesn’t do that. They hire people who can do the math and they make sure their mandates stay within the productivity increase. Where they can do it without causing people to rebel against them. I’ve read a fair number of their calls for comments, papers, etc. They do the math. They want to tell us what we can have, but not so we’ll revolt. They don’t believe in the customer. I do to an extent.

Yes, the government regulation cost looks huge. It’s probably somewhere around 0.5 to 1.0% compounding over 50 years. I think 1% doubles in 70 years. So it’s a big number, it’s just smaller than productivity increases.

Here’s a 1 year plot for multiple countries on productivity growth: (2006-07)
http://rankingamerica.wordpress.com/2009/03/16/the-us-ranks-4th-in-productivity-growth/

Was there a one year increase in mandates that got to 4.7% ?

I don’t think I am under-estimating the relative cost at all.

*sigh*
I am trying to get you to apply principles. The principles apply on every product of every industry. Mature technology has lower productivity improvements, but they are still there. Mature product however can apply new technologies. Automobiles are a mature product but new technologies are entering the automotive field every year if not more frequently.

Electronics works as an example because the time scales are so much shorter. Humans grasp short time scales better than long ones. Automobiles are operating on a longer time scale so it’s not as clearly visible and they are mature product so the productivity increases don’t beat inflation, but all the principles still apply, just at different rates.

I don’t want to go this route but may it’s the best way to express it, Clover can’t apply principles to problems, it argues based on what it feels about certain things. I am putting aside my feelings and opinions on mandates, how they limit choice, how they kill products, how they create annoyances and design balance problems, and I am just applying principles of product development. I am viewing all of them as ‘stuff’. Just stuff. Feature adders. Not that I would like a cleverly designed harness and roll cage but not airbags. Not the market segments of interesting cars that are gone. Simply looking at product development and applying the principles to arrive at an answer to the question, are cars more expensive now?

My conclusion is they are no more expensive than they were in constant terms. We get more -stuff- for the same or less constant real money.

Productivity increases year over year are equal to or higher than the new equipment that has been added. All of it. Market and government.

We are on or near the cusp of government exceeding the ability to increase productivity. But that’s the future. Where we are headed.

The Fox and Panther platforms were aberrations. The Panther platform wasn’t replaced because of regulation. It stuck around because there was no profit in designing a new one with CAFE hovering over that could kill the payback at any moment. It took decades for that moment to finally arrive. The fox platform would have been replaced in 1989, but -customers- rejected the Mazda MX6 based Mustang IV, which became Probe. This pushed the original Fox platform to go another four years and then be replaced by the SN95, which was heavily modified from it.

Furthermore, let’s take a classic long lived platform like the Falcon’s. First car 1959, Ford Falcon. Last car something like the 1981 Granada. Same basic design. But that’s it. I don’t think they share a single stamping. Roughly every two-four years it was significantly changed or a new variant created. I think only in Maverick and Granada did it buck those trends because both cars were design-and-forget products. Just run them into the ground with minimal changes. Maverick was also built in Brazil and Mexico. It lasted there until ’79 I think. Killed in the US and Canada in ’77. If it was the US government, we should see new mavericks still being made in Brazil. We don’t.

The current mustang platform issued in 2005 is only being modified for 2015. Looks like Ford will get 15 to 20 years out of it total. The falcon-like mustang platform went only eight with modifications.

Another thing that happens through competition and productivity increase is increasing rates of change. Engineers have to do things faster and faster. If your company’s engineers don’t your competition’s will and you’ll be behind and headed toward bankruptcy if it’s not corrected.

It seems to me you’re attributing everything to government mandates. That’s also what government wants you to believe. They want you to believe you’d be driving a 1964 type car today if it wasn’t for them. It’s a lie. We are driving cars that cost too much and perform inferior in every significant way to what they would have without government. But the argument that we would still be driving around with cars with carburetors or with simple unit bodies or other 60s technology is absurd.

The idea that government drives technology is bullshit as far I am concerned. It creates the illusion it does as it screws everything up because those in government want the power. It’s the same old government scam. I’ve argued against countless people over the years that automotive safety design was well on it’s way being done by the automakers without government long before Nader penned his book. Long before government stuck their nose in. Automakers do these things to improve their products in the market.

I will not accept this argument that engineering-know-nothing-popularity-contest-winners in government did anything but f things up. Make them suboptimal from where they would be. Skew the balance points of engineering to absurdities. They did not create airbags, dual master cylinders, disc brakes, abs, stability control, crash safety, or any thing else on the list. What they do is misapply it, distort it. Government touches gold and turns it to shit.

Cars would have a ton of extra stuff without government by now, it just wouldn’t be the stuff government wanted. It would be what worked best together in a reasonable balance point. The 1970 whatever wouldn’t be made. Engines would still be computer controlled. We would still have body control modules. We would have a lot of stuff. We might have roll cages instead of airbags. But added stuff we would have in much the same cost as we do today.

I reject the premise that our technology comes from the state. Like natural cycles, government takes what it knows is already going on and then exploits it for its own institutional power. These people are parasites. They create nothing. They manipulate others to live. For all I know the automakers are looking at breakthrough technology so our dear leader stepped in to take credit for it. Which he did in his campaign commercials. That’s what they do. Take credit for the work of others.

I’ve been following this debate and don’t think either of you are on the same page.

One thing Brent, are you saying that the added equipment (airbags, backup cameras, ABS, Traction control, Auto stop/start, etc) do not increase the bottom line price of the car as compared to not having them?

I get the impression that you are arguing that they don’t. Sorry if I misunderstand.

My premise is that government mandates are just ‘stuff’. Stuff that gets added. The market demands stuff get added all the time. The government creates nothing. It just wants to take credit for stuff.

The automotive world is like any other engineering product based industry but with the dials turned up on productivity improvements. In this regard of work environment it is very similar to electronics. Always pushing for more for less.

I believe without government cars would be cheaper. Government mandates are always sub optimal one size fits all by their very nature. For instance, I expressed how a new mustang GT is something like $1600 in the old silver money (at today’s silver price) that circulated when the original came out in 1964 for $2395 for a six cylinder. Without government mandates I think the car would have better stuff and be somewhere around $1200-1500. But that even with the government stuff, it’s still cheaper.

Government, if you read their calls for comments, papers, etc you’ll see they spend a lot of time on how much their mandates will cost. A good amount of calculation goes into it. We can argue its accuracy but it is clear they are aiming to keep each one under some unknown threshold. My guess, my opinion is they aim to keep it under the year over year productivity gains.

I’ve seen no data contrary to this, only data that supports it.

The problem is government is stealing via inflation. So the price still goes up. When I have tried to do the analysis in constant dollars and see others attempt it, in different ways, it appears to me that the mandates have not exceeded the productivity improvements. Inflation meanwhile is running multiples of the mandates.

X >> Y is what my argument boils down to.

Seems you used an awful lot of words to avoid a direct answer to;

“Brent, are you saying that the added equipment (airbags, backup cameras, ABS, Traction control, Auto stop/start, etc) do not increase the bottom line price of the car as compared to not having them?”

Maybe I can put it one more way.

Government demands something, say it costs $4,000. The engineer’s price target is $400. It doesn’t get built. Project canceled. No product. The end.

But if government’s mandate is $3, and the price target is $400, then the engineer has to find $3 of cost to take out. That is what’s done. That target does not change because government issued a fatwa. That’s considered ‘whining’ and ‘complaining’. Maybe marketing gives up something like heated headrests or some such. Maybe marketing takes less margin or agrees to move the target to $401.50.

If you don’t believe me feel free to work in product development for awhile.

WOW.

Yes or no would have been the answer if you were honest.

Instead, you are obviously over-qualified to be a politician as you answer like one.

My comment was for Brent not you Eric.

He weaseled around a direct answer to my question.

Please add ‘@Brent’ to my ‘politician’ reply.

Eric, I first posed my CAFE resulted in SUVs argument sometime around 1998 give or take a couple years as I recall. I see no reason to revisit here, as I have already revisited it in this discussion forum. Should I go back and do all my individual points you failed to address or have typed back incorrectly?

Again, I repeat, I am putting aside my feelings on the mandates. I am putting aside the distortions in choice. I have argued they do that many many many many times over in the last 15+ years. I am arguing cost. Just plain and simple cost via product development engineering principles.

That’s what we do here, correct? We apply principles to things rather than use our feelings on individual aspects.

What you posed in the article is exactly what most people do, that the cost of a car in 1970 or whenever is a baseline and that base car cost in real terms never changed, it only grew as the market and government added additional stuff.

This is, incorrect. Period. There is no such constant baseline car. It doesn’t exist. When X is added, Y is subtracted. Want to convince me? Show me mandates that have cost more than productivity increases. You’re done.

Every bit of data I know and can find says it’s the other way around.

Also there is no requirement for six airbags. A car with two is legal. The side impact standards don’t even go into effect until 2013, but they don’t require airbags. That’s just the cost effective solution to this regulation with all the others in play.

Besides the market put side airbags in long before the government enacted the new side impact standards in 2007 to go into effect in 2009 and require compliance within four years.

I went and looked this up to make sure my memory was correct:
http://www.edmunds.com/car-safety/new-side-impact-requirements-will-change-the-cars-we-buy.html

But is this a case of regulators nearly having to catch up to where the automotive market already has traveled? The vast majority of cars and SUVs offer some sort of side-airbag protection, whether standard or optional. In fact, automakers actually made a voluntary agreement in 2003 to make these airbags available in at least half their vehicles by September 1, 2007. Regardless, automakers aren’t too far off from meeting the federal requirements. For the 2009 model year, approximately three quarters of all vehicles have standard side airbags.

The standard reflects what had already come to be a market expectation of a large percentage of customers. The government moves slowly and the people in it want to tell the clovers they gave them ‘safer cars’ or whatever. No. The market gave them safer cars. The government just stole their choice from them after the fact, after the market penetration and costs were reduced.

It’s just like how the government screws something up and blames the market, but the other way around.

I’ve argued with ‘clovers’ for years that the market made their cars safer. I’ve learned of programs from automakers that predate Nader’s book significantly.

I don’t know how else to put this. You’re seeing it two dimensions and I am seeing it four. What you are telling me is like me telling you how things are in journalism, where this would be reversed.

PS: I’ve spent ten years of my career in industries with lots of government regulations and mandates. I think I’ve got a pretty good handle on how things go when a new fatwa comes down.

Eric, stop treating me like am some ignorant idiot. Airbags were introduced by the automakers in early 1970s. I can give you exact details from a service manual on my shelf if you really want me to. The automakers discovered the problems with them and shelved them. To say we wouldn’t have them now, with technology that makes them work is your guess, nothing more. I can say we wouldn’t have these overpowered ones in the dash. That’s the government at work. The government tells the clover majority the automakers didn’t put airbags in the cars because of greed. That the automakers fought the mandate because of greed. They fought the mandate because they knew airbags of that strength killed people. They learned this the hard way in the 1970s.

Interiors get redesigned regularly. The costs you speak of there existed in car models that don’t exist any more. They were retired years ago. Design with an airbag or without one. each has its own costs and testing in the end it should be a wash or close to it between them. Either one could be higher wrt engineering time. Still have to test the non-airbag dash in crash tests etc. Still have to pass internal company safety requirements. But making both, now that’s big time unnecessary cost.

I’ve already told you that the cost of everything together is significant, my educated guess from napkin calculations is about 1% give or take compounding for 50 years. However productivity has been compounding at a multiple of that rate.

Just show me numbers. Show me mandates that exceed productivity increases year over year. Not feelings. numbers. Because I see productivity numbers of ~2-8% increasing year to year depending on country and the year. Then I hear of the new mandate that is implemented over four years that adds $400 to a $25,000 car. so less than 2% over four years… a 1/4% a year. Just give me better numbers and I’ll concede.

And please stop spewing retail parts counter prices as costs. These are not the real costs to the manufacturer. And don’t use the option retail price either. That’s cut in half just by the bogus ‘invoice’ cost. The automaker paid maybe half of that ‘invoice’ cost with labor included.

I wonder what sort of rant you’d write if really knew now cheap parts are. Oh what the hell.. http://www.worldautosteel.org/projects/cost-models/ go for model 6. Car doors.
A car door assembly… $67. Metal door skin, crash beams, and other structure together. $132.75 per door -pair-. Now granted there’s a number of overhead costs they have as zero and no finishing… but here’s your material and labor costs for a raw door.

So what do you think a side mirror really costs now? Not paying for some body shop guy to paint it. If mirror housing paint costs more than $5 on the production line I’d be shocked. I had smaller plastics painted much nicer for a $1. The electric motor, plastic gears, wiring, connector… plastic pieces and housings… if this whole thing got past $50 I’d be surprised. Probably retails unpainted at the parts counter for $150-$200. I’m just pulling this mirror stuff out of my head. Want me to check it? $150 for the body shop guy to paint it. $300 mirror.

Let me check… Holy f… the motor made in china is 8 cents! You have to buy 1000 of them though and it’s one of those sketchy made-in-china supplier websites. So a good one from a decent supplier is probably 50 cents. I used to get small motors for 25 cents, but they were way smaller than these. Then again that small was probably extra $$. I was thinking $2. I was way high. Not much other data out there for quick gut check.

You’ve covered the automotive industry for 20+ years but you make an argument that ignores when airbags were developed and the story behind them. I know you know that, so at least give me credit for knowing it rather than using a debate tactic on me that works with people that only know the mainstream media story of how Joan Claybrook and all worked tirelessly for 15 years to ‘give’ us airbags.

On another note, I could stop replying if for just once you would repeat back what I wrote correctly.

It’s a very significant price increase in total, after five decades. I’ve stated that many times. 1% compounding over 50 years is very significant. 1% compounding doubles in just under 70 years. 1.5% in roughly 50ish. (I don’t want to do the math, 2% is 35 years).

Thus, at this low level, regulation, mandates have roughly doubled the price of a car since the 1960s.

What I am arguing is that productivity has increased at a greater rate since the 1960s.

I’ll state it clearly. Mandates have likely roughly doubled the price of a car in 50 years. Productivity increase should have at least halved the price of a car in 50 years.

So why are the cars more expensive compared to our wages? What’s left to blame?

Zactly!