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Industry Consolidations 80s-90s Chart - Interesting

Hobbes

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Here's one that shows the companies that became EADS, tracing them back to 1900.
 

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sferrin

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Wish they'd have gone back further so you could see things like the McDonnell/Douglas merger, North American becoming part of Rockwell, Convair to General Dynamics, etc.
 

Stargazer2006

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sferrin said:
Wish they'd have gone back further so you could see things like the McDonnell/Douglas merger, North American becoming part of Rockwell, Convair to General Dynamics, etc.
I've got these somewhere, but I'd need to do some digging... Stay tuned.
 

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And people wonder why you don't see so many aircraft designs these days...
 

taildragger

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During these consolidations, Air International ran a cartoon making light of the end result. It depicted a small aircraft with "British Aerospace" painted on the fuselage being passed on the taxiway by an enormous superjumbo painted with the name "McDohop Boheed". I'll try to post it if I can find it.
 

Stargazer2006

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taildragger said:
During these consolidations, Air International ran a cartoon making light of the end result. It depicted a small aircraft with "British Aerospace" painted on the fuselage being passed on the taxiway by an enormous superjumbo painted with the name "McDohop Boheed". I'll try to post it if I can find it.
By all means, please do!!!! ;)
 

Byeman

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I had put together a little document about the "incest" that happened in the formation of the most of major US aerospace companies.
 

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jsport

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Noone can argue that consolidation cycles are not a natural business progression, but innovation will continue on a 'death spiral' if these socialistic bureacratic oligarchies w/ their gov'n capture tactics continue to cost more and deliver less while aggressively eliminating innovative small companies by assuring the gov'n doesn't have the competence/continuity, motivation, or resource to co-invest in next generation defense systems. These companies would make their investors more money if they were split up, and allowed to recompete in a genunily competetive corporate reset. Each of these companies has one or two core businesses which they should maintain, but the rest of their offshoots should be competely split off and forced to compete on their own or not.
These offshoots would start w/ more resource but be financially etc. completely new independant companies. This will not occur as this profit making step would endanger their govn capture tactics which could no longer enforced. US competitive edge can not be maintained on the current course.
 

taildragger

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The 1990s consolidations might have happened naturally as part of the business cycle and in response to the changing market, but they didn't. The whole process was stage managed by the DoD and exemptions from antitrust regulations were obtained from the DoJ. This was defensible on the grounds that a shakeout in the industry was inevitable in the wake of the Cold War and that the government had an interest in minimizing damage to the defense industrial base from all the creative destruction. Market forces are wonderful things but they have their limits and military preparedness is a classic example.
 

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Thank you for the further clarification Taildragger. Today's Bloomberg TV segment on 2011 federal spending and the prime receipents is timely for this subject.
 

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90ies actually marked the extinction cycle of aviation platform diversity. While the peak was at 80ies. We can draw parallels to car industry, where many smaller companies have been folded in to bigger ones. If the case is US companies, then it means certain death to them. For example, Saturn( which was created within GM to fight nimble imports), Pontiac, Hammer, Plymouth, Mercury, Oldsmobile-all of them were starved to death from R&D standpoint. Interestingly, not a single japanese company has gone defunct. I wonder why... That is a cancer of upper managerial echelon, that can only see bulging pofit margin couple of inches ahead. Another issue is heavy outsourcing that has starved expertize to death. In this case aviation is not an exception. While healthy competition includes diversity of players, a few large players start choking the market by corrupting the system within. We can see that there is only one large civil passenger aircraft manufacturer left in Us, and even that is unable to construct an airplane using only domestic expertize. I guess we wouldn`t have unemployment issue and foodstamps issue, if most companies managed to do R&D and actual engineering work at home be it tv sets, cars, wristwatches or airplanes.A healthy competition is only where people decide what to buy and what not, military industrial complex is out of competition, as there is always room to play out patriotism card, classification card, homeland security card or bluntly corrupt the mouthpieces at office. Wherever you turn around in Us , in any industry that deals with precision movement engineering, there is extreme outsourcing, poor diversity, few players and superbly long product overhaul cycle. All of them are a contradiction to people`s choice.
 

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For car and aircraft companies, the situation in the US from the '90s mirrors the UK from 1945 onwards.

Aircraft industry: massively rising R&D cost coupled with falling demand from the national defence ministry means severe costcutting. This can be handled well or badly.

Car industry: overcapacity (for different reasons), social problems (strikes in the UK, crushing pension obligations in the US), R&D being spread too thin leading to unimaginative or low-quality products.

It took a few false starts to get a handle on consolidating an industry. The car industry has learned and is now doing much better (VAG taking over crappy old companies and turning them around, Japanese companies surviving through innovation and alliances)
 

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ADVANCEDBOY said:
1. Pontiac, Hammer, Plymouth, Mercury, Oldsmobile-all of them were starved to death from R&D standpoint.

2. and even that is unable to construct an airplane using only domestic expertize

3. if most companies managed to do R&D and actual engineering work at home be it tv sets, cars, wristwatches or airplanes
Wrong on both accounts

1. Those are not companies but brand or product lines.

2. It had nothing to do with expertize but cost. The parts for the aircraft could be produced domestically
a. The 787 was still designed in the US
b. Boeing is pulling back some of the overseas production.

2. It had nothing to do with expertize but cost. The parts for the aircraft could be produced domestically
a. The 787 was still designed in the US
b. Boeing is pulling back some of the overseas production.

3. They do perform R&D and actual engineering work at home, it is production that is overseas (see Apple)

Your second point is part of your idiotic idea that the US do not have the technical ability to land a man on the moon
 

Hobbes

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Pontiac, Hummer, Plymouth, Mercury, Oldsmobile all were independent companies at some point. GM gobbled them up and tried to use them as brands/product lines, which was a dismal failure in all cases. Hummer got clobbered by the drop in demand for oversized SUVs, but the others? Prime examples of badge engineering, where they tried to sell the same bodyshell with minimal trim changes under the various brands. None of these brands got any R&D money spent on them by GM. Advancedboy's point stands.
 

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A full two thirds of USG contract resource goes to only 200 companies according to Bloomberg. If US Public servants are serious about the return of manufacturing to the US, some sort of gov'n lead change is in order, as the traditional market forces will not accomplish this goal.
 

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A similar situation is seen in the pharmaceutical industry.


GlaxoSmithKline, AstraZeneca etc.
 

Byeman

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Hobbes said:
Pontiac, Hummer, Plymouth, Mercury, Oldsmobile all were independent companies at some point. GM gobbled them up and tried to use them as brands/product lines, which was a dismal failure in all cases. Hummer got clobbered by the drop in demand for oversized SUVs, but the others? Prime examples of badge engineering, where they tried to sell the same bodyshell with minimal trim changes under the various brands. None of these brands got any R&D money spent on them by GM. Advancedboy's point stands.
false. Those companies were "gobbled" in the 20's and 30's, so the point doesn't stand. There was R&D money spent on them.
 

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jsport said:
A full two thirds of USG contract resource goes to only 200 companies according to Bloomberg. If US Public servants are serious about the return of manufacturing to the US, some sort of gov'n lead change is in order, as the traditional market forces will not accomplish this goal.
False.
1. US Public Servants do not determine who bids on contracts.
2. 2/3 is for the big ticket items like Aircraft carriers, subs, aircraft, tanks, etc. There are limited producers of such.
3. the remaining 1/3 is widely distributed.
 

Hobbes

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Byeman said:
Hobbes said:
Pontiac, Hummer, Plymouth, Mercury, Oldsmobile all were independent companies at some point. GM gobbled them up and tried to use them as brands/product lines, which was a dismal failure in all cases. Hummer got clobbered by the drop in demand for oversized SUVs, but the others? Prime examples of badge engineering, where they tried to sell the same bodyshell with minimal trim changes under the various brands. None of these brands got any R&D money spent on them by GM. Advancedboy's point stands.
false. Those companies were "gobbled" in the 20's and 30's, so the point doesn't stand. There was R&D money spent on them.
Plymouth: badge engineering since the '70s, no brand worth speaking of by 1990.
Mercury: badge engineering since 1945, amounts to no more than a trim level between Ford and Lincoln.
Oldsmobile and Pontiac had their own models, granted. But there was very little to differentiate beween Olds, Pontiac and Chevrolet, so ultimately no reason to keep them around.
For all of GM USA, R&D was kept to a minimum for decades as GM rested on its laurels and was oblivious of the mounting competition. Soon enough, GM had no answer to better-built, better-equipped and better-engineered cars from Japan. All they had was road barges with appalling build quality and 1970s technology, and SUVs that were no more than a truck chassis with a passenger cabin shoved on top. R&D? GM had to be dragged, kicking and screaming, into the 21st century.
 

Byeman

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Hobbes said:
Plymouth: badge engineering since the '70s, no brand worth speaking of by 1990.
Mercury: badge engineering since 1945, amounts to no more than a trim level between Ford and Lincoln.
Oldsmobile and Pontiac had their own models, granted. But there was very little to differentiate beween Olds, Pontiac and Chevrolet, so ultimately no reason to keep them around.
For all of GM USA, R&D was kept to a minimum for decades as GM rested on its laurels and was oblivious of the mounting competition. Soon enough, GM had no answer to better-built, better-equipped and better-engineered cars from Japan. All they had was road barges with appalling build quality and 1970s technology, and SUVs that were no more than a truck chassis with a passenger cabin shoved on top. R&D? GM had to be dragged, kicking and screaming, into the 21st century.
That was my point, they weren't companies, but product lines supported by one company.
 

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When you have an average of 4 contractors per state sharing 2/3s of Fedearl spending, there is a problem. Any cursory view of the state of innovation reflects how little has changed since the 90s. Small Business Innovative Research (SBIR) programs are always under attack from the majors and Program Managers have a bias for majors.. As they say 'noone ever got fired for hiring IBM.'

Comments like "US Public Servants do not determine who bids on contracts." and the "remaining 1/3 is widely distributed" reflects either the bias of a paid lobbist, or a high level bureaucrat who has no interest in science or innovation but does have interest in their own interest exclusively.
 

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jsport said:
Comments like "US Public Servants do not determine who bids on contracts." and the "remaining 1/3 is widely distributed" reflects either the bias of a paid lobbist, or a high level bureaucrat who has no interest in science or innovation but does have interest in their own interest exclusively.
Comments like the above show no concept of reality, and complete lack of knowledge on the subject matter. I am neither a paid lobbist, nor a high level bureaucrat and I am interested in science and innovation having been in the space program for 30 years, much of it working with small science teams.

There is a difference between bidding on contract and determining the winner.
The remaining 1/3 IS widely distributed and it is up to you to show otherwise.
 

jsport

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Unfortunately, respectfully, have to say there is a private Idaho in the ether here all right. .. have worked in this world since the eighties and have witnessed repeated majors attempting to SETA (wonder if you know what that is) for the gov’n on a project and then prime it at the same time. Both times this action nearly lead to a criminal case. The primes would not back down until threatened w/ such sanction. ..have witnessed major’s bulling smaller companies inside the Pentagon directly. The “Mentoring” program majors run to 'get in on small biz contracts' ( SBIRS etc) is usually little more than the dating before the divorce when the ‘bullying thief mentor’ affords the small biz little more than a seat in the court room to witness the theft.
…have seen LSI representatives now SIs becoming the chief of staff and scheduler for gov’n PMs thus forcing small business presenters to sign an NDA w/ the Chief of staff of PMs office. If this is not a perversion-would like to see one. LSIs who built jet fighters have no business in Medical records and MRAPs. ..whether the 1/3 of what size pie is healthy is not the point. Imagine there is a world where 1/3 might be enough. We are not in that world. Later consolidation also may make sense when proper gov’ n top cover is provided.
Healthy competition involves culling to flourish in this garden-w/o more gov’n assumed risk w/ small companies innovation remains endangered.
 

Byeman

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jsport said:
Unfortunately, respectfully, have to say there is a private Idaho in the ether here all right. .. have worked in this world since the eighties and have witnessed repeated majors attempting to SETA (wonder if you know what that is)
Was in the USAF, worked for a prime and been a GS. So probably seen more than you (and more SETA's). Wouldn't put up with any shenigans no matter which side of the fence I was on.
 

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@byeman- I am not going into moonhoax dissection, as that would endanger my status here. Anyway, I didn`t come to a conclusion of moonhoax by scanning some yellow press or tabloids, I took a research about a half year long, and only then drew a conclusion. But I digress.
As to car industry, which is akin to aircraft industry, or motorbike industry, or wristwatch industry, or industrial robot industry-all of them deal with mechanical precision engineering, huge R&D inputs , cummulative expertize and constant product overhaul.
let`s see what are the common denominators within US precision industries. Let`s look at car industry-
1. Subpar material texture and fit and finish. Gaps, gaps, gaps, gaps, squeaks, rattles,gaps.....
2. Reliability issues ( now by outsourcing and borrowing majority of complex precision mechanisms, Detroit has managed to fake improved reliability). For example your Ford doesn`t stall , because it has Mazda MRZ engine, Aisin gearbox, Mazda 6 platform, etc. Ditto to Gm and Chrysler. Chrysler evascerates Merc, and Mitsu, and Fiat, while Gm is drenching Opel, Daewoo, Isuzu, leaving middle class of Detroit in shambles.
3. Fake diversity. Many models among brands are nothing more than rebadges, regrilles and botox injections. This leads to certain death. For example,GM wanted to resuscitate Saturn out of coma by substituting real engineering with Opel rebadging. Now we know where it lead to. Now it`s Buick`s turn.
4. Long product cycles. Detroit has been famous for squeezing blood out of a stone by endless updates, akin to hye Cobra Z version, and delaying as far as possible construction of next generation vehicles. japanese would manage to churn out a new generation every 5-7 years, while Us counterparts took 7-11 years. Mercury marauder anyone? For realz?
5. Poor engine and body type diversity. Poor product diversity. While japanese have adapted to every new segment and germans have been catching up as well, US companies are slow to learn. In early 80ies Chrysler invented a minivan. Where is the diversity? Toyota cranks out about 5 types of minivans, and seem not to get enough. When was the last time Ford engineered a minivan? When did GM itself engineer a minivan in last decades? When was the last time US based company engineered a minivan that wouldn`t have had leaf springs ? When was the last time Detroit engineered a new platform? And I don`t mean fiddling with Opel platforms from Germany, but actually rolling up your sleeves over your Timexes and engineering from a clean slate up!
5. Dwindling in-house expertize. Most US companies outsource at such heavy rates that they already lack expertize to construct complex components resorting to Asian subcontractors, which have nothing to do with foreign subsidiaries of the mother company. The more complex a component, the less likely it will be engineered domestically. And it is not labour costs issue, because most engineering is outsourced from Germany, Japan and South Korea, not Uganda, Latvia or Lesotho.
6. Obsoletness in technologies. Detroit has been famous for squeeezing out more ponies from old Fox platfoms or auburn colourd OHv blocks. Why mess around with DOHC or variable time valves, just add more cubic inches. Remote gas cap? Naah. Just add cupholders. Rear disc brakes, naah. Just pour more chrome on rims. This has been attitude of Detroit for decades. Making money by attaching 2 chariot leaf springs to train rails and shoving a tin on top to sell it as a real rig for real boys.with a real markup. Now they have caught up by resorting to import components.
This was a short description of car industry. I bet you can substitute the entry ` car` with airplane, bikes, consumer electronics, trucks, trains, ...you see the point. :(
 

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ADVANCEDBOY said:
1. @byeman- I am not going into moonhoax dissection, as that would endanger my status here. Anyway, I didn`t come to a conclusion of moonhoax by scanning some yellow press or tabloids, I took a research about a half year long, and only then drew a conclusion.

2. This was a short description of car industry. I bet you can substitute the entry ` car` with airplane, bikes, consumer electronics, trucks, trains, ...you see the point. :(
1. You had to have or the web versions yellow press or tabloids because you came to the grossly wrong conclusion. Just like your cloud seeding. Those are two strikes and I bet I can find a third, hence you have no credibility on any topic what so ever.

2. No, the auto industry is not applicable to airplanes, consumer electronics, trains, etc. Production is not the same as design and development. Outsourcing is done for cost and not capability.
 

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Here is how Boeing saves a lot by assembling abroad, besides engineering was done abroad as well. Guess how would it affect workforce at Boeing? Funny, how they chose these quiet expensive countries labourwise. And even then sending these parts overseas by a specially reengineered 747( done by russians). I used car industry as an example, instead of Plymouth, Eagle or Olds you could type- Kodak, Polaroid, Vivitar or Mack, Freightliner, Kenworth, Navistar. Or Buell, Harley-Davidson, or Bose, Jensen and Harman/Kardon . To see the point try to compare each of these companies against their competitors on each of the 6 points given- for example Kodak versus Sony or Nikon. Mack versus Renault. Motorola versus Samsung or HTC. Trains? Forklifts? Camera lenses? Just pick the category! I still tend to believe that it has to do with lack of engineering skills and expert workforce. For example are you trying to convince me that Sony is charging less money for development of radios as what ford could do using their own in-house departments that were used previously? And for Kodak it is chepaer to purchase german Schneider-Kreuznach lenses than develop their own? it is cheaper for chrysler to use mercedes platforms than their own? It is cheaper for Harley -Davidson to use japanese Showa forks than their own? And Intel has research labs in Japan because....it saves money?
 

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Byeman

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ADVANCEDBOY said:
I still tend to believe that it has to do with lack of engineering skills and expert workforce.
What you believe and reality are two different things.

BTW, Kodak was not a camera company but a film company, which held most if not all patents on digital imaging. Their failure was in management not in engineering, which is also applicable to other companies.

And it is cheaper to use non US companies, due to unions, health care and retirement costs.

Apple and Silicon Valley negates all your views.

You haven't been around enough to know what you think you know. You haven't seen US spacecraft close up or other US high tech hardware.
 

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ADVANCEDBOY said:
Here is how Boeing saves a lot by assembling abroad, besides engineering was done abroad as well.
Most engineering was done in the US.
 

Byeman

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ADVANCEDBOY said:
1.
Funny, how they chose these quiet expensive countries labourwise.

2. And even then sending these parts overseas by a specially reengineered 747( done by russians).
1. No, they are cheaper laborwise

2. Russians are cheaper.

None of your arguments say better, just cheaper.
 

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[list type=decimal]
[*] The following information is an example of US attitude towards precision manufacturing, and the reality is far more dire. The following exceprts are taken from The new York Times, Jan 21, 2012. The following exceprts deal with Apple company. This might be a bit off topic from aircraft company consolidations, but it clearly depicts similarites across all US precision engineering sectors.And Byeman, have a little less self -confidence.
[*] `It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares. `
`Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say. `
`People will carry this phone in their pocket, he said. People also carry their keys in their pocket. “I won’t sell a product that gets scratched,” he said tensely. The only solution was using unscratchable glass instead. “I want a glass screen, and I want it perfect in six weeks.”
After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go
`At dinner, for instance, the executives had suggested that the government should reform visa programs to help companies hire foreign engineers.Mr. Jobs even suggested it might be possible, someday, to locate some of Apple’s skilled manufacturing in the United States if the government helped train more American engineers.` “We shouldn’t be criticized for using Chinese workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
`What’s more, Apple sources say the company has created plenty of good American jobs inside its retail stores and among entrepreneurs selling iPhone and iPad applications.`
[/list] Though components differ between versions, all iPhones contain hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. And all of it is put together in China.
`The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hour.
`Companies like Apple “say the challenge in setting up U.S. plants is finding a technical work force,” said Martin Schmidt, associate provost at the Massachusetts Institute of Technology.`
 

Byeman

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And I forgot to post this.

In the US, typically, health and retirement costs are carried by the companies. In other places, the gov't covers those costs. Hence, labor costs are cheaper. Guess what? Where are the major economic problems? Greece, Spain, Europe, etc, where the gov'ts cant fund their obiligations.
 

Hobbes

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That's not the cause of higher labor cost in the US. If health and retirement are funded by the government, they have to set taxes to finance these. A large proportion of these will be funded through income tax. You'll see that the income tax rate is much higher in Europe than in the US.

Also, according to http://www.bls.gov/fls/#compensation there's a whole bunch of countries that have higher labor costs than the US.
 

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Again, anyone believing we do not have serious economic, technological and soon National Security problems is living in his or her own private Idaho.. Experience in this "Idaho" is not relevant.
 

Byeman

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Hobbes said:
That's not the cause of higher labor cost in the US. If health and retirement are funded by the government, they have to set taxes to finance these. A large proportion of these will be funded through income tax. You'll see that the income tax rate is much higher in Europe than in the US.
Huh? Income tax has no bearing on labor costs. Income tax is on the worker and not born by the companies and hence they do not pass it on.
 
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