An Instructional Exercise in Cost-Raising Strategies, and Perfect Complements Production
AbstractThe 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 InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 38 (2007)
Issue (Month): 2 (April)
Contact details of provider:
Web page: http://www.tandfonline.com/VECE20
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.