I think that even if commodities had remained stagnant, which they would not or could not because you are talking about the steel industry here, and various types of MILLS and secondary operations as well, prices would still have to go up beyond that 10,500 dollar number.
Did the space where the vehicles are being built go backwards in value and not cost as much per square foot of floor space?
The equipment necessary to try to automate the assembly of vehicles cost lots of money as well. New tooling costs yearly, tool and dies, robotic controls and driverless moving carts. ALL of these things add to the cost of building a new product.
Then we get into the wage and benefit questions of the workers for all of those same years.
I negotiated five contracts with the UAW in my career.
NONE were pleasant. And to boot when the actual auto plant workers had to negotiate, they didn't work for less and they got more also in terms of various benefits as well.
DO you want a raise in pay? Who doesn't? When that happens across a corporation, costs have to be accounted for because now you are spending more money and getting the same revenue. Price increases are needed. So we issue a proce increase. Then people who purchase our products are hit with higher prices and they go through the same thing. And it repeats itself throughout the entire supply chain.
Finally it is passed on tot he consumer. The price of the commodities obviously is affected because raw materials to make up those commodities does not stay stagnant....
SO while this is an exercise in COST ACCOUNTING, it is a very simplified version of several, not all, of the factors attributing to the ultimate costs of manufacturing and building a product.
micro...
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