In 1980, there was a Ford plant in Pico Rivera, CA. I was working for Hadley Auto Transport at the time in their rail yard, loading and unloading cars and trucks. I bring up 1980 because two things happened that year that made a real difference.
One, Ford decided to build the 1980 Thunderbird - a terrible car - I mean truly a waste of the earth's resources, but in line with the rest of their products outside some trucks. The union was so disgusted with that car there was serious talk of a wildcat strike. (A strike by line workers without the support of leadership.) No one wanted to build that car and ask people to spend hard earned money for it outside of Ford management. So, brand loyalty when down the drain. Before that, if you'd driven a Datsun into that parking lot there was a decent chance you'd be taking the bus home. After that, no one was happy, even the people buying the other cars but what were we supposed to do? Waste our money on cars we knew weren't good? Quality is always, always, always a management decision, Ford's decision cost them loyalty from everyone.
Second, Ronald Reagan was elected and in the name of supply side economics, he got the top tax rate cut from 74% to 28%. This gave people in that tax bracket an immense amount of extra income, which they used to build factories where they could make the highest return. Ford came to the union and said, they'd like to modernize the plant and keep building cars in Pico Rivera, but they had workers in other places who'd work for a $1.25 an hour, so make a counter offer. Obviously, there was no hope. The factory and a lot of others left this country on the wave of investment money created by the Reagan tax cuts. That's what de-industrialized America and of course, tanked the US economy. Now of course, Reagan did a stimulus program by way of huge defence spending - the Ford plant re-opened as a Northrup Grumman plant for awhile - but that was unsustainable and shut down a again a few years later. Reagan tripled the national debt trying to save the economy but they way they spent the money did nothing for the country itself, didn't better educate a work force, didn't modernize transportation, didn't rebuild and modernize energy production and distribution, etc. so the effect was short term and probably led to Bush Sr. being a one term President.
The point of all this is - an economy has to have a strong middle class with money to spend - the middle class creates the jobs by creating demand for goods and services. You can supply the best detail shop ever built, with the best machines, best trained staff, best and most efficient water and power and if there aren't enough people with the money to use your service, you're wasting your time.
Robert
