Canada

Lol! That's hilarious. You obviously don't know what the sunk cost fallacy even means, if you're using it in this context. It doesn't apply here.

If you have a factory full of equipment, and enough workers to run that equipment...how do you pay for that, without contracts? You can't just sit there producing nothing, and expect to stay in business. Even if all of your machines were fully paid off...which is almost never the case...you would still need work to keep the lights on and the doors open.

How is that so hard to understand?

When you're talking about sunk costs, you're talking about investments that haven't returned anything yet, and are unlikely to in the near future. That's not at all what I'm talking about. If you read my comment again, you should get to the part where I said, manufacturers are constantly reinvesting in more capacity. Newer technologies. More capabilities. When machines or equipment wear out or newer technology becomes available, they cycle out the older, outdated machines and equipment for new ones. This is a gradual, but constant cycle. There are almost always machines and equipment that are still being paid off. And as soon as they're paid for, you start the cycle again. Whatever expands your capabilities, is next on the list. Wash, rinse, repeat.

If a company isn't reinvesting in its own capacity like that, they cannot accept more work. They have a hard limit on what can be produced in a given amount of time. The only way to produce more, is to buy newer equipment, that can produce products faster or in greater quantities. That kind of equipment is very often extremely task specific. Those capabilities are very often not transferable to other industries. That means any investments made into that equipment would be for nothing, if you had to switch tasks. You would have just paid off...or would still be paying off...equipment that can no longer be used for its intended purpose. The only way to see a return on that investment, is to use it.

And if your customers want something new, you need to have the equipment needed to make it, before they'll give you the contract. Why would they agree to pay you for something you don't have the capacity to produce?

Again. How is that so hard to understand?

Your weird claim that government EV investments never materialized is genuinely hilarious and proves you have not looked at global auto manufacturing or supply chain data in the last decade. Legacy automakers are actively pouring billions into retooling their existing plants right now precisely because leveraging established vendor networks, trained labor pools, and permitted industrial real estate is infinitely cheaper than trying to build greenfield factories from the dirt up.

See, I really don't think you're understanding what I'm saying. I brought up that example to point out that the government itself can't just force a company to "pivot", no matter how much money they throw at the project. It's up to the car companies themselves to make those changes, at a pace they can afford. What you're describing here, is exactly what I've been saying about individual companies themselves reinvesting in their own capabilities. If there are subsidies to take advantage of in order to upgrade thoae capabilities, great...but those car companies aren't "pivoting" to completely different industries, like you seem to think they can.

Using this analogy, what the government is effectively trying to do to the defense industry, would be to stop those car companies from producing EV's after the companies have already invested in those upgrades. And you're here saying they should have just used all that money on other things, like healthcare or housing.

The bottom line is, none of those companies would survive a transition away from car manufacturing. Without seeing a return on that investment, they would go bankrupt. That's not a sunk cost fallacy...it's just how businesses work.