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Originally Posted by tw
Why did GM products cost more to build than Mercedes? Because GM's scale made economies impossible.
'economies of scale' is only an economist's myth.
As 1980 Ford and IBM both demonstrated, 'economies' only existed after both companies massively downsized.
Due to the 'economies of scale' myth, GM parts also cost more to build.
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What impact does the exorbitant benefit and pensions package have on costs? As more people retired there was an increase in fixed costs to cover them. right?
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But economists foolishly think if A results in B, then B must also result in B. Defective logic. If 'economies' result from being #1, then #1 must result in 'economies"? Total bullshit.
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Wait what? Where is that from? I'm missing something.
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Downsizing. "Economies of smaller scale". Once a company achieves a certain size, then "negative economies" are created with increased scale.
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Didn't reducing retirees benefits also have an impact? I'm not saying one is exclusive of the other, but as the number of retirees grew with benefits that were very costly to the companies, the companies fixed costs grew as well, decreasing profit margins.