Reply #9: We need to be clear what "Management Cost" means

[lelgt60]

If we are talking the total compensation (which is the only thing that really matters) of some set of high up executives, it probably is a small portion of the total cost of the car. However, that doesn't mean we shouldn't puts caps on it. There are other things like fairness that come into play, as well as the productivity reducing effects of unfairness.

I'm more interested in overhead costs - the costs of non-direct labor, advertising, etc. Traditionally these have been assumed to be small, but over the last 20 years, research has shown this is not true in many industries. I don't know about the auto industry. They sure seem to place lots of ads.