F: Assumptions Based on Economic Theory

Regarding domestic automotive companies ford reigns supreme but unfortunately America is not a closed economy. When you engage in trade you seek out to find the best competitor and underlying economic factors paint the picture in true form. Over the past 30 years automotive wages have outpaced other manufacturing based jobs. This would be ok if productivity moved in suit but as a matter of fact productivity has remained virtually stagnant. On the other hand, Japan's manufacturing jobs and automotive industry wages have moved in constant allowing them to gain ground and establish a well endowed comparative advantage in the auto industry. Ultimately Japan is producing equal if not better quality cars then the United States at lower prices. Because of this wage inequality Japan should thrive and the domestic automotive industry should continue to exhibit diminishing returns.