My sister-in-law looked at my Nissan rice-burner with utter contempt, “at least we buy American”. So we looked at the VINs and found out my car was made in Smyrna, Tennessee and her Chevy was made in Mexico. Ha! 
The obvious reason is to save labor costs, I get that. But Nissan does hire expensive American workers. Yet both similar cars are basically the same price. Is my sister-in-law getting ripped by GM since they’re not passing off labor savings to the customers?
Part of GM’s financial woes is the cost of pensions/healthcare/benefits to their retired workers.
My very quick Google search resulted in a couple of pages that claim that assembly-line labor represents only ten percent of a new car price, including benefits and retiree health care costs. So production in Mexico isn’t going to dramatically reduce the cost of the car.
You have to remember that building a car has thousands of components, and as many subcontractors. So your Nissan may have been built in Tennessee, but the cup holders are from china, the transmission from Detroit, the seats from Mexico, the visors from Vietnam, etc. You can’t really say that a car was built somewhere, just assembled.
Vehicles are sold for what the market will bear, not what they cost to build. If they could build them for half the cost, the price would be competitive with other vehicles. And as stated labor is not everything and productivity differences can offset increased per-hour costs.
I believe they shed a lot of that liability during their recent bankruptcy.
Note that it is management, not the factory Joes that are the biggest drain in terms employment costs at US car makers. Years ago Japanese car makers would shake their heads at the bloated management at US companies. And the recent ballooning of management salaries, retirement packages, etc., has just made it much, much worse.
Blame the unions is just a meme.
Interesting!
She had pretty much answered (somewhat predictably), it was the past unions that made up for the labor cost difference.
And wouldn’t that refer to the US ones exclusively, anyway?
See this - Retirement Heist: How Firms Plunder Workers' Nest Eggs
The author was on the Daily Show a few weeks ago. Basically, she says that the problem is not the pension funds for ordinary workers, but that the absurd salaries, bonuses, and retirement payments for the few top executives represent the difference between profit and loss in most major corporations, including auto workers.
When the place I worked at was trying to instill Japanese management techniques, years ago I remember a video about one car company’s process in Japan. Yes, those job-for-life golden rice bowl workers had it made; but the components came from little mom-and-pop operations. One bunch in the video, for example, made headlight assemblies with minimum-wage labour. The big companies had a bait-and-switch technique. They would pick the most efficient, cheapest producer and award themmore and more of the business; when it went well, they bought a 50% stake in the company to share the profit. Then, like Walmart with its suppliers, they would start demanding the price be lower, and lower. The little company was screwed, like a junkie. Since at this point they were producing mainly for that one big company, saying no meant giving up the majority of your business.
Let’s keep in mind that most, if not all, of the US plants for foreign carmakers are not union shops. There’s a reason many of them are in the Southeast and that’s because that region is notoriously anti-union.
And the people are desperate for jobs, and they probably get tax breaks for building there and get credit for assembling in America… and they keep the unions out of course.
Also, when you add up the whole process from sheet steel/plastics base, to a minivan sitting in the showroom, an average “American” car has done the equivalent of crossing the North and/or South border a half dozen times. “Detroit Iron” is actually “North America Iron” and has been so for years now.
e.g. Brazilian- and Mexican- assembled Volkswagen products have been sold in the US at prices competitive in their market segments, while US-made BMWs and Benzes are still sold as premium vehicles.