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USA and Mexico built trucks same price, why

14SLTZ71

By 14SLTZ71
in Future GM News & Rumors

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14SLTZ71 Enthusiast

14SLTZ71

Posted
Posted

Why is it that you go to a GM dealership and trucks built in Mexico are the same price as trucks built in the USA?

GM pays far less labor fees for trucks they build in Mexico so why don't customers see a difference in the price of a truck built in Mexico vs built in the USA?

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DanMan_S Enthusiast

DanMan_S

Posted
Posted

Supply chain 101, don't set your pricing based on your cheapest supplier. Use it to help increase the margin.

14SLTZ71 Enthusiast

14SLTZ71

Posted
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I guess it's partially the fault of consumers because we know this but we continue to buy!

DanMan_S Enthusiast

DanMan_S

Posted
Posted

I guess it's partially the fault of consumers because we know this but we continue to buy!

 

 

Every business does this, it's unavoidable.

Andy Seibel Enthusiast

Andy Seibel

Posted
Posted

Very interesting question. It got me thinking: would you choose the truck built in mexico if you could save $500 or $1000?

 

Some people claim to support american jobs & Made in U.S.A., but at the same time complain about the price of goods. If you want a cheaper truck, but don't want jobs outsourced, we get this result where GM makes it hard to determine where the truck was built (unless you are well versed in deciphering the VIN)

 

GM (and all the automakers) have a very dark past 2 decades. since all the old timers retired, their union pensions forced the company to make cuts just to pay out the amount owed to all the retirees. I once heard that $2000 of every new car sold went to pay union benefits. (don't know if thats 100% true) Now that is great if you work in the UAW, bad if you are buying a car.

 

End of the day, they are a business, trying to sell a commodity to make a profit. pretty much every business goes through a similar problem now with the global economy.

 

Side note, You are correct that labor prices are cheaper in mexico, but don't forget about import taxes + transportation costs, and other fees that you don't see. I have no idea what it adds to the cost, but it is something.

 

Mine was born in Me-hi-co. I didn't ask before I drive it home.

 

Have a good day.

Daryl LBZ Senior Enthusiast

Daryl LBZ

Posted
Posted

That's why I no longer buy brand new vehicles. The cost is ridiculous, and in my opinion not worth the money unless you just want something you don't have to work on. I would rather spend my money elsewhere than give it to them to make extra profit on something that I don't feel is worthy.

BigBadSierra Senior Enthusiast

BigBadSierra

Posted
Posted

Moving to Mexico was simply to increase there profit margin.

 

Same reason all of the companies are leaving.

 

Same thing here in Canada allot of shops moved down there.

Grumpy Bear Senior Enthusiast

Grumpy Bear

Posted
Posted

Most companies do not operate solely to provide a living for their employees or to provide useful products for the befit of all who seek that product or service. There are no true philanthropist on boards of directors. They operate to provide exceeding wealth to the “shareholders”.

 

If you own stock or have purchased debit in that company; do not think you are going to receive any special benefit from that endeavor. It isn’t what they mean by a “shareholder”. No one is going to hand you free preferred board only shares as compensation for participation. If they did, you would be “they”.

 

No one is going to cut the price of your truck because “they” got a ‘better labor deal” in another state or country. If they didn’t go there to benefit the people that work for them by elevating their means of living what reason have you have to believe you would benefit from that business decision?

 

For the most part, our questions are too small. IMHO

14SLTZ71 Enthusiast

14SLTZ71

Posted
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Side note, You are correct that labor prices are cheaper in mexico, but don't forget about import taxes + transportation costs, and other fees that you don't see. I have no idea what it adds to the cost, but it is something.

Due to NAFTA they do not pay any import tax, also GM has a direct line railway system from Mexico to the USA.

I think they only have to pay Mexican employees $4.00 a day. So their savings and profits are huge when they build in Mexico and sell in the US.

dirtfan21 Senior Enthusiast

dirtfan21

Posted
Posted

Due to NAFTA they do not pay any import tax, also GM has a direct line railway system from Mexico to the USA.

I think they only have to pay Mexican employees $4.00 a day. So their savings and profits are huge when they build in Mexico and sell in the US.

 

^^^This, and yet folks still stand behind this trade deal that herds US jobs away like cattle. Kudos to Ford by the way, just saw they plan to add 700 jobs in Michigan with a 700 million dollar expansion instead of a new 1+ billion new factory in Mexico.

Sierra 5.3 Enthusiast

Sierra 5.3

Posted
Posted

 

^^^This, and yet folks still stand behind this trade deal that herds US jobs away like cattle. Kudos to Ford Trump by the way, just saw they (Ford) plan to add 700 jobs in Michigan with a 700 million dollar expansion instead of a new 1+ billion new factory in Mexico.

Fixed it for you.

DanMan_S Enthusiast

DanMan_S

Posted
Posted

 

^^^This, and yet folks still stand behind this trade deal that herds US jobs away like cattle. Kudos to Ford by the way, just saw they plan to add 700 jobs in Michigan with a 700 million dollar expansion instead of a new 1+ billion new factory in Mexico.

 

Next step will be to bring GT production back from Canada!

Cowpie Senior Enthusiast

Cowpie

Posted
Posted

Well, there is the cross border broker fees, the transportation, etc that goes into the cost.

 

it isn't so much about cheap labor, it is about the massive pile on of government regulations on this side of the border along with that the U.S. has one of the highest corporate tax rates around. And much of that gets sidestepped by taking production out of the country and bringing the finished product back in. And it is shooting yourself in the foot financially to bring back any profits made out of the country, since it will get hit hard in taxation. So the money sits off shore and gets put to work elsewhere, like assembly plants in other countries. There is almost as much money sitting off shore as just about the entire national debt. I understand taxing it, but at a more reasonable level that would get it back here so we could do more with it here and build up our own economy. And back off the government regulations. One just about can't wipe their butt without some government regulation about it.

14SLTZ71 Enthusiast

14SLTZ71

Posted
  • Author
Posted

Well, there is the cross border broker fees, the transportation, etc that goes into the cost.

Cross border broker fees are charged to individuals who bring a vehicle across the border, they do not apply to auto manufacturers who transfer vehicles across the border in accordance with NAFTA.

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