The author presents an account of the 1993 contract negotiations between the United Auto Workers (UAW) and Ford Motor Company to assist students in developing facility with perfect complements production and cost functions and cost-raising strategies. The author seeks an answer to why the UAW targeted Ford for contract negotiations to establish a benchmark for subsequent negotiations with Chrysler and General Motors. Contrary to assertions of the popular business press that “Ford drew the short straw†in being the first of the “Big Three†automakers to negotiate with the UAW, the author believes it is not implausible that this arrangement served the economic interests of both Ford and the UAW. The UAW targeted Ford because it was more likely to go along with a liberal wage and benefits package given its investment in robotics. In turn, Ford was able to raise, albeit indirectly, its rivals’ costs.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
For technical questions regarding this item, or to correct its listing, contact: (Andrew Ivers) The email address of this maintainer does not seem to be valid anymore. Please ask Andrew Ivers to update the entry or send us the correct address..
Find related papers by JEL classification: A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Salop, Steven C & Scheffman, David T, 1983.
"Raising Rivals' Costs,"
American Economic Review,
American Economic Association, vol. 73(2), pages 267-71, May.
[Downloadable!] (restricted)
Did you know? Each page is provided with a technical contact, in case something is not right with the supplied information. See under "publisher info".