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  1. #11
    Join Date
    Apr 2019
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    11

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    I agree with you “that most consumers would not have much of an opinion if asked about it (Parts Churn).” However, if they were to study the data I have and the data provided in the post, I think they would have a strong opinion against it. If they had a relative that was killed by a Takata airbag inflator, they would have an extreme, negative opinion about Parts Churn.

    The information and conclusions I have presented are well supported by facts. If you believe my logic is faulty or weak, I would be interested in specifically where you think the logic of my argument is lacking.

    You worte: “That you cannot think of a good business reason for it does not mean that they don't have one.” That is a misstatement of my position. I wrote that “[t]here is no plausible, legitimate business rationale for Parts Churn.” And, there is certainly no plausible legitimate reason for all cars to be made using Parts Churn. I would very much appreciate if you could supply a legitimate business rationale for all cars to be constructed using Parts Churn.

    Once I did write to Ford about Parts Churn. I received no reply. I have also written to the DOJ. They promptly acknowledge receipt and state they appreciate the information but also state that there will be no further communication from them on the matter.

    The courts often rule against the Department of Justice and the Federal Trade Commission in regard cases based on Section 1 of the Sherman Antitrust Act. When courts rule against a Sherman 1 case, they cite the fact that you put forward, specifically, that parallel actions and even consciously parallel activity is not sufficient to establish conduct which is subject to legal action. This is where “plus factors” come into play.

    If you will, please, please, please, please give me one plausible, legitimate business rationale for all cars to be made using Parts Churn. Any attempt to construe my argument as being against all Parts Churn is not legitimate. It is the exclusive use of Parts Churn that violates the Sherman Act.

    I agree with you that the DOJ and FTC will not bring a case against the automobile industry. They already have bailed them out once.

    But to not bring a case is still a mistake because they will eventually have to bail them out again unless entities such as Uber and Lift make them mostly irrelevant.

  2. #12
    Join Date
    Oct 2016
    Posts
    2,878

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    Quote Quoting MrWhipple
    View Post
    f you will, please, please, please, please give me one plausible, legitimate business rationale for all cars to be made using Parts Churn. Any attempt to construe my argument as being against all Parts Churn is not legitimate. It is the exclusive use of Parts Churn that violates the Sherman Act.
    Nobody here has access to any of the data needed to answer the question as to why all the companies do it. But since they all do (according to you) my bet would be that it is financially the cheapest way to do it.

  3. #13
    Join Date
    Oct 2014
    Posts
    7,209

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    Quote Quoting MrWhipple
    View Post
    The information and conclusions I have presented are well supported by facts. If you believe my logic is faulty or weak, I would be interested in specifically where you think the logic of my argument is lacking.
    The logic problem is a simple one. Your facts are not such that the only conclusions one could draw from them are the conclusions you have asserted. Nothing in your facts compels the conclusion that the only possible reason for the parts churn is that the auto companies are trying to cheat consumers.. Nor does anything in your facts support that it must be the case that the auto companies are colluding in using churned parts in violation of the Sherman Act. You appear to be jumping to such conclusions because you yourself cannot see any other possible reason for it. But that you don't see it does not mean that there are not other possibilities. Logically your conclusions are certainly possibilities but the facts you have do not prove them to be the only possibillities. I am not an expert in auto design and manufacture and thus do not know why the auto companies make the part choices that they do. But there is certainly the possibility that if called upon to answer to a government agency or in litigation why they use parts churn that they could provide a business reason for it.

    Quote Quoting MrWhipple
    View Post
    Any attempt to construe my argument as being against all Parts Churn is not legitimate. It is the exclusive use of Parts Churn that violates the Sherman Act.
    It would be the collusion to do it, and your facts certainly do not compel the conclusion that collusion must be taking place. At best you can say that is one possibility.

    Quote Quoting MrWhipple
    View Post
    I agree with you that the DOJ and FTC will not bring a case against the automobile industry. They already have bailed them out once.
    I think the more likely reason a case won't be brought is that such litigation is difficult for the government to win. Where anti-trust actions have been brought by the government, the results have decidely mixed. Given the tremendous effort and resources these cases take to win, the government isn't going to proceed unless it believes it has a very strong case.

    Quote Quoting MrWhipple
    View Post
    But to not bring a case is still a mistake because they will eventually have to bail them out again unless entities such as Uber and Lift make them mostly irrelevant.
    Whether or not the government might need to bail out these companies in the future has no logical connection to whether the government brings an anti-trust case against them for parts churn.

    You did not analyze foreign auto manufacturers on parts churn that I can see. Why not? A large number of the cars sold in the U.S. are from foreign auto companies. And there is the issue of why other governments have not seen parts churn as a consumer problem to address.

  4. #14
    Join Date
    Jan 2006
    Posts
    38,534

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    You just shot yourself in the foot by arguing the Takata airbag situation wouldn’t have happened but for part churning.

    Takata airbags are involved with model year cars as old as 2001 and as new as 2017. That’s 17 model years. Using your argument given the duration of Takata airbags being used the issue wouldn’t have happened


    the problem; parts churning has nothing to do with the Takata airbag problem. It is simply an issue inherent to Takata airbags. They built a lot of crappy airbags.


    Regarding a valid reason for parts churn; As i said; producing a shiny new version is what draws people to a vehicle. Changes. People don’t want last year’s model generally. They want the newest shiniest cars that when everybody looks at them, they know it’s this years model. You can deny it all you want but when people buy a new car, they don’t want a car that looks identical to the Jones next door 5 year old model.

    It is true that some people grow tired of a vehicle. On the other hand, some do not. Some become more fond of a vehicle the longer they own it.

    That isn’t even close to what I said. This has nothing to do with how long somebody hangs onto their car or whether people grow tired of their car. I said when people buy a new car they want everybody to know it’s a new car. Model years updates are how that is observed.

    Additionally, standard components would make driving safer because there would be less confusion in operation thereby lessening driver distraction.

    so now you want ford AND gm AND Chrysler to all build identical model T’s?

    If you have that much trouble figuring out how to operate your car, maybe it’s time you gave up the keys. Every manufacturer has their own “style” of operating controls. If you drive a Ford, hopping into a Chevy is going to be foreign to you until you become familiar with it. This is a silly argument and is quite condescending to the general public.


    Btw; I prefer shiny new cars over last years model. I have even waited a few months so I could wait until the new model year came out, that brought in a major model update rather than buying the current model on the market.

  5. #15
    Join Date
    Apr 2019
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    11

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    You just shot yourself in the foot by arguing the Takata airbag situation wouldn’t have happened but for part churning.

    Takata airbags are involved with model year cars as old as 2001 and as new as 2017. That’s 17 model years. Using your argument given the duration of Takata airbags being used the issue wouldn’t have happened

    the problem; parts churning has nothing to do with the Takata airbag problem. It is simply an issue inherent to Takata airbags. They built a lot of crappy airbags.
    The inflators were good when installed. They became unstable over time. Had the industry not used Parts Churn with a safety device and used standard airbag inflators, replacement airbag inflators could have quickly and inexpensively replaced the Takata inflators. Instead, the industry used proprietary, non-interchangeable inflators. It cost lives and a very great amount of money.

    The airbag inflators eventually became defective. An argument can be made that the proximate cause of the harm was not from a defect in the inflator, but was from the many thousands of proprietary, non-interchangeable inflators which had to be manufacturered. That is not the fault of Takata; that is the fault of the automobile manufacturers.

    There is a constant, never ending flow of automobile recalls which stem from Parts Churn manufacturing. The problem here was that the defect didn't appear until years after manufacture.

    Regarding a valid reason for parts churn; As i said; producing a shiny new version is what draws people to a vehicle. Changes. People don’t want last year’s model generally. They want the newest shiniest cars that when everybody looks at them, they know it’s this years model. You can deny it all you want but when people buy a new car, they don’t want a car that looks identical to the Jones next door 5 year old model.
    It seems advertising works.

    "They want the newest shiniest cars that when everybody looks at them . . . ."
    Some people buy into this. It seems you have. But, it is simply not true. Every year at least 75% of the cars sold are used cars.
    https://www.coxautoinc.com/news/cox-...new-car-sales/

    Btw; I prefer shiny new cars over last years model. I have even waited a few months so I could wait until the new model year came out, that brought in a major model update rather than buying the current model on the market.
    Hallelujah ! The advertising people know how to ring your bell. Hallelujah !

    Btw. I prefer older cars that I can buy cheaply, that have a proven record of reliability. About 6 months ago I bought a 2013 Kia Rio SX - top of the line - with a 6-speed manual transmission. I got a DEAL !!!! With the average price paid now being over $37,000, you probably paid at least $30,000 more than I did.

    It isn't made using interchangeable parts, but it was the best I could do.

    BTW, someone (perhaps you) sort of semi derisively referenced Henry Ford and his magnificent Model T. Every Model T was made with parts which were interchangeable with every other Model T - at least 16,500,000 of them. The Model T had 64% market share in 1921. In 1921 there were over 100 different manufacturers of automobiles in the United States.

    I hope you enjoy your new car as much as I enjoy my Kia - and the $30,000 I didn't spend.
    When are you going to trade it in for a new one? Did you get a loan? Good interest rate? I paid cash.

    And one more thing: the way cars are made today is similar to stone age manufacturing. About 1,000 years ago in China Bi Sheng invented
    interchangeable parts. That was almost a miracle for manufacturing. Then, interchangeable parts were replace by the current predominant
    use of replaceable parts. This was a disaster for the consumer. It destroyed economies of scale. But, if all manufacturers do it, the consumer
    has no choice. This is the sort of thing that antitrust law is supposed to cure.

  6. #16
    Join Date
    Oct 2016
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    2,878

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    So much of that is simply conjecture. Especially the part about the airbags.

    At this point, I'd like to admonish myself and the other seinor members for giving you what you wanted in this thread. Which was give you a pulpit for your crazy ideas.

  7. #17
    Join Date
    Apr 2019
    Posts
    11

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    Nobody here has access to any of the data needed to answer the question as to why all the companies do it. But since they all do (according to you) my bet would be that it is financially the cheapest way to do it.
    No. It is the more expensive. It is standard economics and engineering - economies of scale.

    Group technology (GT) also facilitates standardization and rationalization (S&R), which helps control part proliferation and eliminates redundant part designs. It is common for a company to have many similar versions of the same part, such as a gear. When the company implements GT, similarities among gears can be identified, and it is possible to create standardized gears that are interchanged in a variety of applications and products. S&R such as this pays big dividends in that it simultaneously creates economies of scale by increasing part volume and economies of scope because the same gear can be used in a variety of applications. Rufe, Philip. Fundamentals of Manufacturing (2nd Edition). Society of Manufacturing Engineers (SME), 2002. Chapter 19: Product Design Tools, Part 4: Product Design, p. 165.


    So much of that is simply conjecture. Especially the part about the airbags.
    At this point, I'd like to admonish myself and the other seinor members for giving you what you wanted in this thread. Which was give you a pulpit for your crazy ideas.
    You are correct. I did get what I wanted. I wanted to know if anyone could find a valid counter argument.

  8. #18
    Join Date
    Apr 2019
    Posts
    11

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    Quote Quoting PayrolGuy
    View Post
    Nobody here has access to any of the data needed to answer the question as to why all the companies do it. But since they all do (according to you) my bet would be that it is financially the cheapest way to do it.
    Everybody here has access to all the data needed to answer the question. It may be that only integrity is needed.

    And to answer what is to me an irrational "point" made in this thread about Parts Churn being cheaper way to manufacturer, I have started additional research. There is a new automobile manufacturer in the United States. As a new manufacturer not having the benefit of huge manufacturing facilities and laws written to protect them (see ALEC - american legislative exchange council), this new manufacturer must use his facilities as efficiently as he can.

    This manufacturer hasn't used 60 different horns in 10 years or 31 by another manufacturer with some used only one year before being dropped from manufacture.

    2012 2019 Model S HORN,HI TONE,MODEL S RC 1008953-00-H
    2012 2019 Model S HORN,LOW TONE,MODEL S RC 1008954-00-H
    2015 2019 Model X HORN, HIGH TONE, MDLX 1045495-00-A
    2015 2019 Model X HORN, LOW TONE, MDLX 1045496-00-A
    2008 2019 Roadster HORN, PAIR DUAL TONE 2005580
    2017 2019 Model 3 HORN, LOW TONE, SEGER 1109659-00-A
    2017 2019 Model 3 HORN, HIGH TONE, SEGER 1109660-00-A

    This company has used 7 horns since its inception. No attempt to bamboozle. Simply the attempt to make the best car possible.

  9. #19
    Join Date
    Oct 2016
    Posts
    2,878

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    No, we don't have access to all the data and neither do you.

    That new company makes a total of 4 models. The other makers make 10 or more EACH. You really can't compare them.

  10. #20
    Join Date
    Apr 2019
    Posts
    11

    Default Re: Sherman §1 and the Automobile Industry - Part Deux

    No, we don't have access to all the data and neither do you.
    That new company makes a total of 4 models. The other makers make 10 or more EACH. You really can't compare them.
    It very much depends upon how much you know about manufacturing.

    There was a guy who knew a lot about manufacturing. In 1921 he had 64% market share. He made ONE model. He used NO "Parts Churn." He had 64% market share with no Parts Churn. Nobody has manufacturer the way he did since - - unless, maybe - -
    Knowledge of manufacturing processes is necessary to manufacture without violating antitrust laws and succeed. A lot of manufacturing knowledge and thought and cleverness is necessary to make a good car. If, however, you are just interested in making money and you have enough political power (and you are in upper management), then just getting big is the goal. If you are big enough, you can manufacture anyway you want. If people finally get fed up, you will be bailed out.

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