General Motors plans to invest $691 million to expand operations in Mexico

[38P]

why do you think that is?

1. It costs to much to do business there. Market-based economic theory suggests that capital naturally flows to its most efficient point . . . which is no longer Detroit.

Detroit's hegemony was originally due to its proximity to raw materials (steel, timber), cheap transportation, willing investors (mostly from timber, retail and other commercial interests) and abundant semi-skilled labor. These factors made it cheaper to do business there than in other potential automotive centers.

That eventually changed, making Detroit less attractive to investment. The "cost" problem was not just a UAW "extortion" problem, but was also due to
-- regulatory costs,
-- social dysfunction costs,
-- energy and tax costs,
-- decaying infrastructure costs (cheaper to build "greenfield" factories elsewhere where the local governments subsidize with tax incentives, etc.)

2. The 1967 Riots

Some say Detroit never fully recovered after the 1967 riots. The flight of the frightened middle class to the suburbs accelerated, gutting neighborhoods, undermining community stability, and increasing blight. Political corruption and parochialism surged . . . the tax base and commercial activity slumped . . .

3. Inflation and the imports -- the inflation of the Vietnam and energy crisis eras severely damaged the competitiveness of Detroit's main industry.

Imports gnawed into market share and profitability.

Regulatory compliance sucked down additional billions (Detroit basically had to rethink every major automotive system during the period 1968-1988 to comply with literally billions in unfunded mandates).

The result: less money to invest in replacing aging facilities, product innovations and expansion. Less investment further depleted the skilled workforce, creating the spiral that Michael Moore partly (but somewhat inaccurately) captured in his film "Roger and Me."

4. The bean counters: Auto industry finance and accounting types rationalized allowing Detroit and other auto towns to decay.

In other words, it wasn't just one thing.

[38P]

India and China both have a continuing problem - far more people than their land can support; the planet can support ~6 billion people with current technology, arable land, and infrastructure. There are 7 billion today, and the population forecast says 9 billion by 2050.

I'm sorry, but I've been hearing that Malthusian BS my whole life. (In fact, this gloomy view dates back to 1798 when Thomas Malthus published An Essay on the Principle of Population). Back in the '70s, the neo-Malthusians were saying we'd exceed what the "planet" can support by 1990 or so.

Didn't happen.

In the '90s, the gloom and doomers merely pushed the coming catastrophe further off into the future.

I predict it STILL WON'T HAPPEN!

Nearly all workers want "Money for nothing and chicks for free," so as labor markets mature, there are usually competitive pressures as capital seeks efficiencies and supply/demand equilibrium.

In the age of internationalism, migration (America's "undocumented worker" problem is essentially a migration problem -- labor migrating to where the money is), proliferation of WMDs, and asymmetrical warfare, oceans aren't much protection.

[TheSilverBuick]

We're still turning food into gasoline, so we are a ways off from global starvation.

[38P]

The Malthusians will have a point when we're using 100% of our aeratable land with the most advanced available production, irrigation, processing, and distribution technology and people are starving as result of actual food shortages (not political, social, regulatory, oligarchical, oligopolial, or regional market distortions resulting in food supplies being locally short).

Considering that the vast majority of third-world agriculture remains mired in grotesquely obsolete production and distribution technologies (not to mention huge inefficiencies in energy production and distribution, desalinization etc), I say we have vast untapped capacity.

The typical error of the Malthusians is that they never sufficiently factor in market and technological forces which lead to massive, unexpected changes in methods and increases in supply. Instead, they falsely limit adaptation and innovation.

[Scott Liggett]

I was unfair in just blaming the UAW. The EPA has equal blame. American consumers as well. We want it all. We want inexpensive products, but no one wants to live next to a river of acid from factories. Manufacturers run to those countries to have littlle to no enviromentsl regs. Those same countries have tons of labor with no real labor laws as well.

[SuperBuickGuy]

We're still turning food into gasoline, so we are a ways off from global starvation.

we're turning food into gasoline when people are starving. When they didn't have nuclear weapons, that wasn't really a big deal - now they do have nukes - so that equation has changed. Again, perhaps Monsanto will come with better GMO crops, and life will go on to 13 billion or 20 billion.... however, the problems are compounding - and we really are one or two disasters away from some very tough times - or maybe not, and it'll all be peaches, cream and unicorns for everyone.

[SpiderGearsMan]

right next to ford's plant hahahaha

[SpiderGearsMan]

June Car Sales 2013
General Motors Corp. 264,843
Ford Motor Company 234,917
Chrysler LLC 156,686
Volkswagen of America Inc. 36,957