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Well said!
Maybe in 1975, but no longer. My guess is that average car buyer has no idea (or even cares) where the product he's buying was manufactured. Its a global economy today, and its been one for quite some time. And, a large contributor to that lack of caring started all the way back when the window sticker started combining Canadian and US manufacturing content instead of keeping it separate. Outside the rust belt, most folks know Canada is a separate country.
Also, while it is understood that there are differences in the standard of living in this country, which would allow for lower wages in one state and require higher wages in another, the USA CAN'T be one large community if you have 50 states cutting one another's throats to steal jobs from one another. If state A offers incentives for a company to move 500 jobs there from state B, then all you have managed to do is take 500 people OFF unemployment in state A and put 500 people ON it in state B.
As another poster already pointed out, that was happening long before the first non-US made auto was ever sold here. Of course, you're only comparing one state with another, which is quite different when luring foreign investment...since the investment of a foreign company is outside the 50 states.
If a business is moving from one state to another, then you are right...but don't forget the cost savings to the bottom line that may be going to the company who is doing the moving...
Example: my Father owned an auto parts store from the 1960s to 1986...back in the early 1970s, when NYC was going downhill due to welfare and crime, one of his parts suppliers was located in the Bronx...their power bills were exorbitant (Con Ed) and their security costs (fences, barbed wire, cameras, bars on windows) were also sky high, along with muggings, theft and vandalism...they moved their warehouse about 30-40 miles away into Connecticut...within ONE YEAR, the lower costs of power, and especially the security costs of theft, vandalism, and the personal cost reduction of no more muggings, their costs were reduced by so much, along with the dramatic lower cost of insurance, that the lowered costs PAID FOR THE MOVE IN THE FIRST YEAR, and went on to save more money after that...so, NY lost, say, 30 jobs, Conn gained those jobs, but the company became much more profitable and the stress level went to zero, as opposed to the fear factor of leaving the warehouse in the dark in the Bronx...simply moving the business can have major advantages...just ask all those businesses that left the opporessive environment of Calif in the last 10-15 years and moved to Orgeon, Nevada, etc...
Remember, if a new plant is coming to town, then that job gain will be quite real for the local area...think Kia in West Point, Georgia...add in the local vendors and I really think it is hard to make the argument that Americans do not benefit from foreign auto plants...and if they are non-UAW, then the chance of quality workmanship remains high, and floor sweepers will not be paid $35/hour plus benefits...that fact alone will help keep the company profitable...
No UAW, no junk...that is the fact...
That is exactly what happened when Yamaha opened their plant in Newnan Ga.
I don't know how much of their inventory and parts comes from local suppliers, but the local economy certainly took off. Fast food and sit down restaurants, clothing stores, contractors and their subs for commercial and residential, Barber shops, real estate companies, and the list goes on and on. During all this, along came Walmart!
UAW supporters don't like to hear of an Asian manufacturer or Walmart contributing to a community in a positive way, but they do!
In a nutshell, the Yamaha plant was both directly and indirectly responsible for thousands of jobs, and it just keeps getting better.
And the locals are happy campers.
Kip
The back roads of Georgia, SC and NC are littered with abandoned factories ..... the jobs went overseas... Perhaps this plan you like is better than this but it still doesn't help most of those folks that worked in those abandoned plants.
Well, now... Did it really?
Certainly, on the "books" it did, but did the cash actually go there?
Its a common claim by those who don't have a decent understanding of global commerce, but so far, no one has demonstrated where the cash goes. Toyota doesn't have a big vault in Tokyo where it keeps the $$$ made in the USA.
Just thinking it doesn't make it so....
but millions upon millions of $$$ have helped the locals improve their living standards...and you can always buy the stock and share in the corporate profits...
Ah, yes... The other side of the coin that those opposed to foreign investment like to omit. Of course, you're exactly right in your comment.
Ever heard of a instance where a foreign automaker was asked to leave a US community in which it was located?
Certainly, on the "books" it did, but did the cash actually go there?
Not all of it for sure, most likely very little from US operations make it back to Japan. Just like little if any of GM profits in China come back to the US. The profits and earnings are used for reinvestment and dividends etc. The Toyota ADR pays a dividend of 46 cents a share. Last qtr Toyota had an EPS of $3.60, so 12% of the profits went to the holders of Toyota stock, which the earnings were earned all over the world and so are the stock holders.
What I was implying is that, in a worst case scenario, the profit would go to Japan, assuming that is where all the profits do go...your comment was more on point...
I was just meaning that if all the profits go to Japan, we still have enormous benefits here from the immediate jobs in the plant (and we're not even counting the local construction jobs from BUILDING the plant, the roads, the rail spur, etc) and all of the TRICKLE DOWN (yes, trickle down) jobs from the associated vendors, restaurants, cleaners, Walmarts, Home Depots, and everyhtinhg else that is a direct effect of locating a NON-UNION auto plant in a rural area in the South...
I forgot to mention the Lowes and Home Depot which I'm pretty sure are now in Newnan. They are also finishing a Mega Mall. The thing is huge and there is still room for more. There is also now a dealer representing each of the D3 as well as foreign companies, as there are now enough people to support them. No telling how many people have benefited from employment in all the new stores as well as the folks erecting the buildings and homes, building the roads and parking lots, electricians, plumbers, etc. All because Yamaha built a factory.
Kip
WHere I grew up we had a couple of rubber mills. They moved south - one in the late 50s and the other around 1980 and are now both over in Asia.
Does the north and the midwest feel ENTITLED, or that the company should be obligated to locate up there???
Sadly??? I don't think so. It doesn't take a rocket scientist to figure out why, crappy products, union work rules, dumb management, how else did you think this was going to pan out? And yes, I blame upper management at GM and C for what happened.
At least the jobs that were created as a result of their mistakes stayed here in the USA.
I'd like to see you expand upon that statement.
You would certainly have a point if the plants were previously located in the Northeast, but the plants we are discussing are totally new to the US.
So, why do you think (that is, assuming you do) that the North and Midwest are somehow "entitled" to foreign investment, while other areas of the US apparently aren't equal in that regard?
No, but as I always say, it's all about balance.
Union problems twenty-five years ago shouldn't keep plants from being built in the majority of the rest of the U.S. After all, domestic plants that were here ended up being shuttered due to foreign competition/cost control. It's like Groucho Marx saying, "Are you still beating your wife?" I will admit that Honda is in central OH, but they seem to be the only one that's built in the midwest or northeast--and those areas are the majority of the continental U.S. Those areas have not recovered from the loss of manufacturing. It's really all about where you live. If you live in the south, you don't see a problem with the north and midwest having lost manufacturing jobs., If you do live there, you see the very obvious problems. I did read that the next Aveo will be built in Michigan, however, which is a good thing (although I'm certain someone here will make that out to be a bad thing!).
Who the heck cares where it's made? You make junk and then fail as company and a region. You make the best products in the world, then you prosper as a company/industry/region.
Detroit Rocks No More....for now. It'll balance out if they return to their roots...zzzzzzzzzzzzzzzzzzzzz
Regards,
OW
The profits go to ownership. Toyota is publicly listed so I imagine their stockholders are all over the globe. Toyota either reinvests the net profits, pays down debt, or pays them out in dividends. Increasing profits tend to improve cash flow and increase stock price as well. So basically, I don't buy all this UAW propaganda about buying foreign hurts America. As you've noted, some US regions or individuals may get hit, but others may prosper. I'll wager that the Boeing union has a very different take on this than the UAW since Boeing gets much of its revenues and profits from sales outside of the US. Trade sanctions or boycotts on foreign auto firms doing business in the US may quickly lead to the same thing overseas against US aerospace and computer firms. Face it, other countries can pick Airbus over Boeing or Toshiba over Dell or HP if we want to play that game. The UAW propagandists also forget to mention the different taxes that foreign firms pay in America on a local, state and Federal basis.
I can't recall where, maybe Time Magazine, but I just read an interesting article that concluded the country exacerbates unemployment issues due to its over emphasis on housing and home ownership. Basically, people tied up in a home have a greater difficulty in bad times being mobile to other opportunities and industries elsewhere in the country.
Regards,
OW
Honestly, its union work rules, restrictions and confrontational style that is in a large part to blame. Did you notice even Caterpillar is looking to build in right to work states. Same at Boeing. At least they are mostly staying in the US for now. This new, seemingly militant UAW leader will either have to ease up a bit or I think you're going to see more D3 leaving the states. Unfortunately, unions tend to drive up costs. I'm not really talking wages and benefits, because often they are not that different. It is union rules creating inefficiency in production artificially driving up head counts and union militancy requiring increased HR and legal staffs to handle all the bitching and grievances. In today's competitive global environment, managers have plenty to keep busy without having to waste time with the usually dumb, blown out of proportion union hassles. "Us versus Them" isn't a good way to build a competitive, thriving business. Ask any manager who has worked in both union and non union environments and I'll be they all preferred the non union locations.
HMM, HMM HMMMM HMMM...
Regards,
OW
Union problems twenty-five years ago shouldn't keep plants from being built in the majority of the rest of the U.S.
And, who says the union problems of 25 years ago have ANY effect on foreign company location criteria?
Companies, for the most part, make decisions based on what's happening TODAY, not 10, 20, 50 or 100 years ago. If I were in the market for a new car, television, or phone, I would look around to find the best deal for me with today's products, not yesterday's or last year's.
Companies are no different, and there are lots of other factors that come into play in locating an operation...
Weather, utility costs, living cost, labor costs, what's available from a "quality of life" issue, etc. are some, but certainly not all of the components examined by prospective companies in deciding where to locate.
After all, domestic plants that were here ended up being shuttered due to foreign competition/cost control. It's like Groucho Marx saying, "Are you still beating your wife?"
Sorry, I'm not buying that argument. If a location is attractive for a company to place an operation there, then its in the running. If it isn't attractive, then its bypassed.
Really, do you think its as simplistic as you say?
I will admit that Honda is in central OH, but they seem to be the only one that's built in the midwest or northeast--and those areas are the majority of the continental U.S. Those areas have not recovered from the loss of manufacturing.
Here's a news-flash.... The Southeast has yet to recover from the loss of textile and furniture manufacturing jobs lost. I'm sure EVERY area of the country can make the same (valid) claim about job loss. The Northeast and Midwest lost more jobs because they had more to lose (ie., more densely populated). My suggestion is to take the same "advice" textile workers were given... "Go back to school...Learn a new trade....Those jobs are NEVER coming back".
It's really all about where you live. If you live in the south, you don't see a problem with the north and midwest having lost manufacturing jobs., If you do live there, you see the very obvious problems.
That's very true. We are all influenced by our own experiences and observations. But, I wouldn't say those in the South (or anywhere else in the US) don't care about job loss in the North and Midwest. But, we in the South could say the very same thing about your area, and it would be no more true than your statement. Comments like that solve nothing, and usually only exacerbate the issue.
But, I will say that an attitude like that can easily be misconstrued as one of "entitlement". And, I'm sure a lot of folks take it for exactly that.
I did read that the next Aveo will be built in Michigan, however, which is a good thing (although I'm certain someone here will make that out to be a bad thing!).
Maybe, but not me or the folks I associate with... I think any manufacturing job in the US is a good thing, because that person is working, paying taxes and supporting the economy (both local and national). In the end, however, the product (whatever it is) MUST be competitive, both in price and functionality, as well as in reliability.
I don't disagree with what you are saying except for one issue; I believe countries like China and Korea are manipulating their currencies and unfairly subsidizing some businesses. The WTO seems ineffective, so I think the US and Europe need to get more aggressive in retaliating against these practices. I don't get so concerned about the worry that China will dump our debt in reaction because they can't really without significantly hurting their own finances and economy. There will always be some differences in government and business practices, but some of these are just egregious. Frankly, I think America has always been a bit stupid putting too much into Asia and too little into our own hemisphere and Latin America.
Of course, other countries subsidize industries. And, so does Europe....And, so does the US.
An example... The airplane building business. Boeing and Airbus.
In the end, it all boils down to sales. All the subsidizing in the world will never succeed if the product being subsidized is grossly inferior or substandard. It may help in the near-term, but not in the long run.
I have little doubt that S. Korea initially heavily subsidized its auto industry, but there wouldn't be a Hyundai and Kia factory in the US unless the product was selling well, and in sufficient demand in the public's eye. And, a substandard product (at least, big-ticket items like autos) would have stopped that in its tracks.
But, I do think you make a good point, if one considers what most would call "disposable" and "commodity" items. In that arena, absolute price often can AND does trump absolute quality. So, in that respect, government subsidization CAN have a substantial impact.
For example, I may elect to purchase a $20 frying pan over a $150 pan, even knowing full well the higher priced pan will last a lifetime, and the cheaper pan will only last a couple of years. The real question to me is how close must the two prices get before I make the leap to the higher priced, higher quality pan.
Regards,
OW
Caterpillar must have made a mistake. Ohio is NOT a right-to-work state.
"Caterpillar Logistics Services announced that it will build a $68.6 million distribution center at Commerce Park on Hoke Road in Clayton, not far from the intersection of I-75 and I-70, and Dayton International Airport.
"The facility will have a $20 million annual payroll and employ 500 to 600 workers. The lowest-paid people will start at $11.75 hour."
http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/opinion/ent- ries/2009/12/09/editorial_caterpillars_new_job.html
2014 Malibu 2LT, 2015 Cruze 2LT,
Please don't suggest that the U.S. should follow the Chinese example. If my government tried to devalue the dollar, I would view that attempt as an unconstitutional attempt to seize my property. You can believe that I'd fight back.
As it is, the value of the dollar will probably drop in the not-too-distant future.
"Spending ourselves right out of our own jobs".
Do you feel you are immune to this statement? How?
Do you feel this statement is foolish?
Do you feel this statement has merit?
"Spending ourselves right out of our own jobs".
Do you feel you are immune to this statement? How?
Do you feel this statement is foolish?
Do you feel this statement has merit?
For me to answer, I would ask that you put the statement in context.
Just like a 15 second sound-bite or youtube video, its impossible to gain enough information from such a brief statement in order to have adequate knowledge to respond.
At least, it is for me...
That's an excellent point.
But, such policies are unsustainable in the long run. And, as another poster stated, its a hidden "tax" on the country's own population. An authoritarian government can maintain such a policy longer than a democratic one, but then again, such governments (once again, in the long run) cannot do the best job of planning and predicting (at least, so far), so eventually, the economy collapses.
You can already see the pressure building in China on its currency policies, both internationally as well as domestic. When things get better locally, the locals want to participate in the good fortune. At some point, if that participation is denied or severely curtailed, well, bad things happen (usually to the government).
Or, the alternative is that the good fortune dissipates locally (within the country), and manufacturing/services move elsewhere.
If that were not so, then N. Korea (in theory) could far exceed the output and economic output of S. Korea.
So far, that hasn't happened, and "Dear Leader" is attempting to bluff his way into "prosperity".
And, don't forget the pressure externally that can be provided. For countries that continually insist on artificially manipulating their currencies, they invite protectionary tactics, such as tarriffs, taxes, and sometimes, outright prohibitions on their products/services.
I like the "I'd fight back" comment above, too. What can anyone do? Vote in a clown in a new suit who is beholden to the same globalist lobbiers and special interest groups? Fight back and you'll end up like the Chinese who tried to fight back 21 years ago.
If one can't buy American, at least buy from an ally or a first world nation.
or THAT!?....
That's why one company is deliriously effective and executing like a car company and one is remaining the antithesis of the same, afaic.
You choose. :P
Regards,
OW
But was it??? A hundred years ago, there were far more farms down South than there are today. Many of those unionized workers up North are actually Southerners (or now descendants of Southerners) that migrated to the Michigan in the '20's and '30's because those jobs were plentiful back then.
No one area "deserves" the jobs more than another, but I do believe it is in the country's best interests to make sure that all the states are as healthy and as vibrant as possible. I'd bet we could move the entire US population into Texas, and maybe 1 or 2 other states, but what would that prove?? Wouldn't you put the rest of the country at risk for invasion in one way or shape??
I think that the currency issue is a red herring. The D3 got into trouble because they forgot how to design & build cars that people really wanted to buy.
Certainly you can't blame undervalued currencies for the systematic destruction of the domestic luxury car business by the Germans. When buyers would rather pay $55K (or more) for a Mercedes-Benz or BMW than $40K (or less) for a Caddy or Lincoln, you can't accuse the foreign competition of unfairly undercutting domestic prices.
For more than 20 years - from the mid-80s until the later 2000s - GM had little or nothing to offer the non-SUV buyer. GM acted as if it didn't want your business if you were looking for something other than an SUV. Their sedan & coupe offerings were dull & uninspired, with cheap, low-rent interiors.
The truth is that most car buyers don't shop by price alone. If something excites them, they'll spend extra to put it in their driveways. At one time - back in the 50s & 60s - the D3, particularly GM, knew how to push all the right buttons to make this happen. But for most of the past 25 years, they've been phoning it in. Only in the past couple of years have we seen some of the old magic come back.
Look at the current generation Cadillac CTS, which is a genuinely handsome & exciting car, & ask yourself why we had to wait until 2008 for this to happen. There's no reason why GM couldn't have done this in 1998. If they had, we wouldn't be having this conversation.
When you build dull cars, you deserve to fail.
"Alabama's paper industry, along with all paper industries in America, is under attack from subsidized Chinese coated-paper products that are being dumped here at below-market prices. Coated paper is used for magazines.
"The Chinese government has subsidized more than $33 billion to this industry. In Alabama, we have 34 paper mills and related job sites with more than 7,000 employees that pay good wages and produce paper products from ream paper, brown paper, tissue paper of all kinds, cardboard for boxes and box plants, along with many other products. "
http://blog.al.com/birmingham-news-commentary/2010/08/your_views_china_unfairly_- dump.html
Those who've been around a while will recall the dumping of autos at prices below what it cost to produce them when the foreign invasion started in the 70s or 80s. Many other products have been dumped here to undercut the US manufacturers and then have the market to themselves as the US companies failed and went out of business (Do we see a pattern here with GM/C/F?)
Whether the dumping is complicit with the undervalued currency or it's a separate, unique, and real process, the end result is the same.
While I find poetic justice in the State of Alabama's complaining about being on the short end of the stick after they bought the auto plant there a decade or so ago, as goes one so go we all.
2014 Malibu 2LT, 2015 Cruze 2LT,
I was old enough to drive in the 70s, & I clearly remember that I paid considerably more for my 1st new car, a '74 Honda Civic, than I would have paid for a comparably equipped Ford Pinto or Chevy Vega. The same was true when my wife bought a Toyota Corona the following year.
Japanese cars almost always sold for full sticker - sometimes over sticker during the gas shortages of the 70s - while American cars could be had for substantial discounts from MSRP. As a result, the out-the-door price for the popular Japanese makes was hundreds of dollars higher than it was for the domestic competition. Even so, many preferred the Japanese brands because they believed - correctly so, IMO - that the D3 didn't take small, fuel-efficient cars seriously.
(There was also the "Lordstown Syndrome". Knowing that unhappy UAW members were sabotaging Chevy Vegas on the Lordstown assembly line didn't generate a whole lot of enthusiasm for American-built products.)
I was willing to pay a premium because the mid-70s Civic was a roomier, better handling, more fuel-efficient & faster car than the comparable D3 offerings. Anyone who thinks that the early foreign successes were due entirely to lower prices either wasn't around then or wasn't paying attention.
Enron stock sold for a substantial price, too.
> in the 70s, & I clearly remember that I paid considerably more for my 1st new car, a '74 Honda Civic, than I would have paid for a comparably equipped Ford Pinto or Chevy Vega.
The idea that a foreign car "sold" for more than a US product is not what's being discussed in my post.
Perhaps the term "dumping" needs to be explained. It's when a product is sold here for less than the actual cost to product in the homeland country. I.E., a product manufactured in Japan was sold here for less than the calculated cost of the product; the purpose was to keep the factories in Japan producing rather than not having any work. Also the dumping undercut US manufacturers, driving them out of business, so the foreign interest then had the market with less competition here in the US. Also the governments in such countries subsidize the industries; it's not the companies manufacturing taking a loss solely by themselves on exported product to the US: the governments are involved. Currency undervaluation is one factor.
2014 Malibu 2LT, 2015 Cruze 2LT,
I understand what "dumping" means. I also believe that you have to look at the final retail price - what the individual car buyer pays for the product - to determine if that product really is being dumped.
If the final retail price - what the typical buyer actually paid - of a '75 Toyota Corolla was, say, $300 higher than the final retail price of a comparably equipped '75 Ford Pinto, then it's hard to argue that the Toyota was being "dumped" on the U.S. market.
As I said before, the street price in the Northeast for top-tier (Toyota, Honda & Nissan) Japanese brands was higher than it was for competing domestic brands. People who bought the Japanese cars were paying a premium - not saving money. I don't see how that qualifies as dumping.
It may be hard for the buy-American crowd to admit, but the small Japanese cars of the 70s & 80s were usually better products than their domestic counterparts.
(Incidentally, the concept of "dumping" was originally invented by the Canadian government as a tool to keep out lower-priced U.S. products. Perhaps it's time to dump the concept & move on.)