I said what incentive does ANY foreign mfr. have to build here IF the big 3 went belly up. I believe there is none. That's not to say they won't stay, as they could.
Right now, if they pulled out they would have to live with the stigma that the Big 3 deal with in closing plants, as well as importing the autos from wherever they are built. This COULD lead to a big backlash. I'm sure there are people out there, if polled, who ONLY feel comfortable buying "foreign " cars because they are mfrd. here.
Again, IF the Big 3 went belly up, what would stop the foreign companies from going home and just importing cars here????
Most of your basis is predicated on US brand cars being inferior. That's a subjective measure. I disagree. It may depend on which one you pick to compare and how you do the comparison. And it may depend on which years. Have you driven a Ford lately as the advertisement used to say. But today's Ford is different than the one 3 years ago and certainly isn't the Ford of 1985 and 1995.
I'm very happy with my two Buicks, thank you. I looked at Honda and Toyo, again, when purchasing the last Buick. The value for the dollar was much, much greater. After learning of all the problems in the "new" 2003 Accord after owners had them and started posting on forums like Edmunds, I was very relieved to have missed out on the "quality" they gave their buyers.
See, it is subjective, but you can't base everything
Would it be cheaper for them to go to China or S. Korea, or even Mexico???
I am kind of learning about this now. China is a pain in the butt to start manufacturing because of trade rules there, you have to partner with a Chinese company (thats how GM got Buicks there, and Chrysler is working on it). The other issue is that the labor is inexpensive but the machines costs the same pretty much no matter where they are. Manufacturing in Mexico isn't so much cheaper unless you go deep into Mexico, and then there are other issues. There is the free trade act stuff, but at the same time, as you pump money into an economy, it improves that economy and it gets more expensive.
To me, living in America affords us the freedom to choose and get the best for our money. If I started nitpicking and ensured that I must buy nationally branded items regardless of its quality, then I would be a great candidate to be about as happy living in Cuba. Really, when it comes to being able to buy things, where would you rather be? A closed market is not something I desire.
When was the last time you filled in gasoline and made sure that the gas you just pumped in had a US tax payer involved directly working in the middle east, or Venezuela? It is utterly ridiculous to be dictated by these trivial issues. So, we can splurge on oil somehow because there are a few Americans working in oil wells in the middle east. But the cost to us is far greater. Thousands of Americans (and millions of civilians) haven't died for cars. But they have for oil. I don't intend to convert this discussion into a political one, but when we concern ourselves with these issues, it is bound to be.
So, you think cargo ships don't deliver oil to our shores? They only deliver automobiles, right?
You can justify your buying habits any way you like it is a free market. I prefer to keep as much money as possible in this country. I know you would like to use oil as your excuse for foreign buying. As long as we are blocked from developing our known oil resources in the USA, importation is the only alternative. And yes we bring millions of barrels of oil in by ship. Every ship that comes into Long Beach Harbor pollutes the equivelant of 12,000 cars. If you feel you get a better car from overseas, go for it. Just don't try getting me to agree with you. Your excuses are easily shot down.
When I buy ARCO gas I know it comes from the ARCO refinery and from US oil in Alaska. If I buy Chevron, Shell or Exxon I have no idea, that gas could come from anywhere.
So you're disagreeing on my subjective assessment? Telling me that I'm wrong? Interesting.
Good for you that you're happy with your Buicks. But that isn't enough for me to go buy one when I know where and what to look at. As you might have guessed by now, not everybody buys on criteria set by you. Strange? I hope not.
And yes, have you driven a Ford lately sounds quite familiar. In fact, it sounds something like commercial from the late 1990s, and before that. The problem is, the competition isn't staying put either.
If you feel you get a better car from overseas, go for it. Just don't try getting me to agree with you. Your excuses are easily shot down.
How in the world did you get the idea that I'm trying to get you to agree with me. You're the one having trouble with choices others make. I'm perfectly fine with whatever choices you make for yourself. For me, the best product gets my money.
Tomorrow, if I buy a TV. It won't start with ripping the pieces apart and carefully examining every component to ensure it is made in America. I refuse to make my life miserable.
Apparently you don't understand why automakers (or any business for that matter) might choose to manufacture things locally. Businesses are businesses, with bottom line being making profits. They aren't doing social service. Not GM, not Honda, not Ford, not Toyota not Nissan and not Chrysler. Its all about $$$.
The very assumption that Honda and Toyota will wrap up from manufacturing in America if big-3 go belly up is, simply put, ridiculous. They are doing so, for a variety of reasons, and profitability is right on top. Why wouldn't it? They aren't stupid. Are they?
So, at least be happy about them helping create jobs in America. Or, would you rather see them close those shops as it would be better for America? (thats a question, I expect an answer for).
I can buy a new GMC PU built by Union labor in Indiana or a new Toyota PU built in San Antonio by non-union labor. The big difference is most of the money from the Toyota ends up in a Tokyo bank.
Whatever gave you the idea that most of the money you paid for your Toyota wound up in a Tokyo bank? Have you ever bothered reading an Annual Report? First of all, ony about 6% of the money you paid is profit. 94% went to pay workers, benefits, property taxes, supplies, advertising, utilities, leases/real estate, etc, right here in the good old USA. Also, (again if you bother to read Toyota's annual report), their "Depositary and Transfer Agent for American Depositary Receipts" (i.e. your money) is... The Bank of New York 101 Barclay Street, New York, NY 10286, U.S.A.
I didn't know New York was located in Tokyo!!!
By the way, if you buy a Dodge truck, are you concerned that all the money you paid is going to Stuttgart (Headquarters for DaimlerChrysler), into some "German" bank??
By the way, if you buy a Dodge truck, are you concerned that all the money you paid is going to Stuttgart (Headquarters for DaimlerChrysler), into some "German" bank??
I think some of it might be invested in, say, China. "Chery" seems to be the new fad. :P
That was an old UAW 'scare tactic'. Buy an import and all the money goes directly to xxxx. However as production moved to NA that changed especially as NA content increased.
Some money assuredly ends up overseas, but before that as you noted from the annual report... They had to pay to build a plant ( laborers, eoncrete, steel, etc ) They had to design the vehicle, then test it and retest it and crash it and recrash it and retest and recrash, etc. They had to buy steel, aluminum, glass, tires, copper, seating, welding wire, water, heat, electricity, etc. They had to pay labor. They had to transport it. They had to pay to advertise it ( HUGE expense !!! ) They had to market it from initial studies to training at launch. They had to finance it and pay the dealers their commission to sell it ( holdback )
Oh, and then they could add a profit....But...
Then 50% of the Net Profit approx had to be sent to our Uncle Sam, plus local taxes and state taxes
( so far nothing has gone back to XXXXX yet )
But after all is said and done..according to the Annual Report.. about 6% is available for repatriation.
But then a certain amount is 'expatriated' in the form of dividends to investors in Hong Kong, Dusseldorf, London, Dubai, NY, SF, LA, etc.
imidazol97, so you LOOKED at Honda and Toyota have you DRIVEN them? Also, have you driven any imports before? If so, how do they compare to your Buicks?
America one of THEE largest auto markets on the planet? Why would Japan Inc. want to burn the bridges of one of it's largest markets? I would imagine some serious backlash if they pulled a stunt like that...
Edit: I was referring to imports abandoning manufacturing in this country
Almost EVERY foreign carmaker has plants in the USA. There are no "jobs permanently lost" when American carmakers cut back workforces - those people are hired elsewhere.
Buying "made in the USA" because you think that by not doing so you are "hurting Americans" is a ridiculous way to go about life.
Want proof?
Look at our unemployment rate - one of the lowest EVER.
Look at the amount of products sold in America which are made elsewhere - the HIGHEST ratio ever.
cooterbfd says, "what incentive does ANY car mfr. have to build their cars here?? "
The same reason they all have plants here now. MONEY !! PROFIT !!!
It costs them a LOT MORE to make and ship a car from Japan than it does to make a car right here in the USA and ship it by truck a few hundred miles to the dealer.
Why do you think Toyota and Nissan have both recently opened huge new plants here? For the MONEY HUNNY.
>Look at our unemployment rate - one of the lowest EVER.
How many of those are middle class jobs? There are lots of restaurant/fast food type jobs paying near minimum wage. There are lots of people who aren't counted in the unemployed who used to be factory workers making things but are jobless. The middle class has disappeared.
To wit: the government brags about new jobs, but they never compare to the jobs lost and what the pay rates were. Even the local city has done the same thing through the deades as industrial plants closed that used to employ people at good wages and those jobs were replaced by a fraction of the number but at low wages. They make good political fodder but don't address the problem of the country.
As for the factories moving to Mexico or Japan or elsewhere for the plants built here. You might take note that Toyota is attempting to lower the wages for their factories to the "prevailing" wage in the area. They are feeling pressure on wages. They have employed more and more temporaries in factory jobs that should be permanent jobs. Why aren't they?
The undervalued currencies make it cheaper to build and import. The reason they are here was because the government made them build plants here to avoid the tariffs of the 80s and 70s and that was a way they could circumvent the intent of the laws here. I'll leave the exact details of the pressure to build and assemble here to people with better social studies recall...
Recently our local paper ran an editorial by an economist - a prominent Democrat, no less - who called his party to the carpet for continually suggesting that the middle class is vanishing.
The middle class is changing, as the old paradigm of getting a relatively high paying job without any education beyond high school (or even without a high school diploma, as was the case in many auto and steel plants) is vanishing. But that calls for better preparation, not banning imports or whining about people who buy a Toyota instead of a Chevy.
He also noted that contrary to public perception, the majority of new jobs pay well and are not in the fast food industry. Of course, they may not be unionzed jobs, which means that the UAW or USW won't be collecting union dues, but that is not necessarily a problem for society as a whole. And you may need some additional training beyond high school to get one.
The Japanese are building plants here because, in the long run, for new vehicles, it makes sense for companies to tailor their products for local tastes and conditions and then build it locally. GM and Ford have been doing this for decades in Europe, South America and Australia, and the residents of those countries aren't complaining that some of the profits generated by the sale of vehicles in their respective countries may end up in Detroit.
Toyota is worried about labor costs, as ANY well-run company is. (And "lowering wage costs" is NOT synonomous with wage cuts. It more than likely means minimizing future increases in wage costs. There is quite a difference, but the UAW and Toyota-bashers prefer to skip that part.)
The problem isn't that Toyota is trying to keep a lid on labor costs. This shows that Toyota is a well-run company that can actually think beyond the day after tomorrow.
The problem is that an arrogant Big Three and UAW thought that they could pass continually escalating labor costs on to customers, because they owned about 90 percent of the market. Well, it's not 1965 anymore. But it's easier to whine, and blame currency manipulation, Consumer Reports, people who buy Hondas and Toyotas or the latest cause du jour, than to make real changes that would eliminate, or at least greatly reduce, this handicap faced by Detroit.
Regarding currency manipulation - the actual exchange rates between the yen and the dollar have varied over the years. Somehow Toyota and Honda have kept growing, even when the exchange rate wasn't to their supposed advantage.
Why? Maybe it's because they stayed focused on the customer, and put the product - not executive bonuses, the stock price, or whether a blue-collar worker might have to make a higher copayment for health care services, or keeping as many union people on the payroll as possible - first.
Corporate Culture: I believe it was last year when I came across an article (Forbes?) that talked about salaries of top executives that run these companies. A comparison was made between one of the domestic brands and that its one top guy makes as much as Honda pays its 34 board of directors combined. It is a small illustration of what profits and expense to these companies mean and how it affects their bottom line. And then one could consider corporate culture where a company’s CEO doesn’t own entire floor at the top of a high rise, but sits in a cubicle like other employees and right in the middle. It seems, those companies value those 6% in profits a lot more than the big 3.
Long Term Vision: In the early 90s, big 3 decided to reap the benefits of selling high profit margin trucks. That segment peaked in 1999 and has been going downhill since. As of now, here is how the big-6 rely on truck market (least to most): Honda: 42.7% Toyota: 43.0% Nissan: 46.8% GM: 59.9% Ford: 66.6% Chrysler: 70% (if Mercedes Benz included, 65.3%)
Guess which segment gets affected most with increasing fuel costs. On top of it, consider the fact that the company that relies least on light trucks (Honda) is primarily relying on likes of CR-V (currently the best selling SUV in the USA) which is more car-like than a truck. Not too long ago, likes of GM, Ford and Chrysler were poking fun at vehicles like those, now scrambling to chase that segment (saleswise, Escape isn’t too far behind with 92K units sold this year, and has displaced Explorer at 74K units thru June).
A few days ago I had a post listing compact cars with power and fuel economy ratings (post #4022). The purpose of the post was lost right after as import-badge bashers decided to paint a virtual picture. The idea was to convey a point. For example, when we talk Chrysler vehicles, what is the first thing that generally comes to mind? It is something they have been relying heavily on “hemi power”. Well, there you go. Take the power equation out, and you’re left with nothing! Why is it that these companies fail to look at possibilities, and prepare for the worst?
Why is it that Honda and Toyota can come up with engines that are smaller in size yet deliver performance that most buyers find sufficient? To compete, instead of doing better by way of technology, GM might throw in let us use larger engine and get more horsepower. People like horsepower. It sells. Yes, it does. Does it? Just take a look at bigger picture. Don’t blame Honda for coming up with a 1.8-liter engine that works. Blame yourself for taking poor decisions.
GM, Ford and Chrysler started to put too much emphasis on a market that was a fad. They lost sight of the car segment, and now are looking up and trying to play catch up. While likes of Honda, Toyota and Nissan have managed to attract buyers who actually have a higher median income as well (which also suggests that higher gasoline prices are less likely to affect these brands for that reason than it would for brands whose buyers earn less). Here is how median household income of buyers stack up, best to worst (Source: J D Powers):
Honda: $88K Nissan: $83K DCX: $82K (Mercedes Benz included) Toyota: $81K Ford: $80K (excludes Aston Martin) GM: $76K
After years and decades of neglect that led to loss of customers, big-3 need to focus on these two major areas of concern. A change in corporate culture would be a good start, and instead of focusing on “now”, focus on “what ifs”. And no, success won’t happen overnight. And bad-mouthing those who are successful would only hurt more and delay recovery. And time is the last thing they have on their side.
Honda: $88K Nissan: $83K DCX: $82K (Mercedes Benz included) Toyota: $81K Ford: $80K (excludes Aston Martin) GM: $76K
I bet if you take MB out of DCX they fall to near the bottom and I bet if you pull Land Rover and Jaguar out of Ford they fall down to the bottom as well.
What does it mean to buying an American car. I will agree to the fact, that if you buy a Toyota Tundra built in San Antonio that 94% stays in America. You buy a Lexus and the only money that stays in America is the profit the dealership gets.
It is a choice each of us makes when we buy any product. Next to our homes which most of are in the USA, our cars are the next biggest purchase. If you care about our economy you will search out the ones with US made content. I am sure there are many that will fit in every budget and brand preference. It is all part of keeping America strong and our economy healthy.
I also agree that executive salaries in this country are out of control. It will be a factor in our demise. Or at least when we just become a serfdom. We are closer than many want to believe.
"If you care about our economy you will search out the ones with US made content. I am sure there are many that will fit in every budget and brand preference."
Actually, for my recent purchase, there were only 3 vehicles on the market that approximated my functional requirements and two of those were not affordable (or reliable) - left with one choice, national origin was not even a remote consideration.
gary says, "If you care about our economy you will search out the ones with US made content."
A very outdated opinion. That statement mattered in 1975, but matters FAR less today.
Our economy is strong, has been strong, and will be strong, and we have many many MANY billions of dollars yearly spent on foreign-made products flowing through the USA.
Typical Chinese product:
It's shipped and distributed in American (money paid to Americans) sold by companies paying sales and property taxes in AMERICA who are paying employees who live in AMERICA, and all the middlemen are in America, and the users of the products are in AMERICA.
It does not matter if it's made in America - Americans are a large part of the long money chain.
I hope you are right. I don't believe you are. I think we are in much worse shape today than 1975. Much closer to collapse. The housing bubble is bursting around us. Foreclosures at an all time high, even with the ridiculously low interest rates. I am buying a house that the owner paid $100k more for just a year ago. He cannot make the payments. He was hoping to make a profit and get out before his interest rate went higher.
>It's shipped and distributed in American (money paid to Americans)
Do you mean like Walmart? Have you checked the salaries paid to their employees, managerial and store workers, many of whom are parttime?
>sold by companies paying sales and property taxes
Do you mean Walmart or Biggs (French)? When did companies pay sales tax? That's paid by the consumer.
>and all the middlemen are in America,
The current business plan has no middlemen--Walmart.
>nd the users of the products are in AMERICA
Yup, users are here, for now, in America.
But what's missing is the extra high pay for executives of the companies that import the product. And what's missing is the US citizen making the product for a good wage-not slave labor or 50 cents per day in a foreign country so an US or other executive can have a hideously high salary and take from the company.
Maybe a good exercise for you learn about manufacturing vs importing would be to follow Nike products and trace how much of the money from a $200 pair of shoes goes to the worker in China or wherever, to the company executive, to the distributor or stores directly...
Maybe your son or daughter will be able to have a 50 cent per day job sometime in the future...
Who cares about how much or little goes to Walmart dock workers or clerks in AMERICA - we are talking about AMERICANS making the money, whether it's small money or large money my point still stands that AMERICANS are keeping the money and re-investing it into our economy in AMERICA regardless of where the product was made.
Companies themselves don't pay retail sales taxes but all their employees do when they buy something.
Every American-sold Chinese or Japanese product generates income to someone in the USA.
And even Walmart middlemen are in America.
We are not talking about one pair of shoes but about billions of sold products in America. Cars too.
A lot of the jobs lost in manufacturing were lost simply because of improved efficiency. The use of computers, CAD, robots, automation throughout the line in any manufacturing means less manual human labor.
The advent of the transplants sped up the process most likely but it was inevitable. To think otherwise is to hope that the status quo was frozen circa 1970. Why weren't these workers who were displaced transferred to building new world class products in new locations? ..inertia, it's very difficult for a worker to uproot himself and his family and move say to a new GM plant in Arkansas. ..work rules, work rules, work rules. ..bad management; instead of fighting tooth and nail for the small vehicle market it was conceded to the imports and transplants. ..fear by management of confronting the UAW.
Here's a couple of eye-opening stats: Since 1989 auto production in NA has increased by 40%. Almost all of the growth has been in 4c autos. Yes SUV's and trucks have grown dramatically but those switches were from cars and station wagons. The growth in the market has been in the 4c autos. In the 70's these essentially did not exist. Now they account for several million vehicles annually. The domestic makers gave this growth market away.
Do you mean like Walmart? Have you checked the salaries paid to their employees, managerial and store workers, many of whom are parttime?
Would it be better for America if Walmart closed its doors? Would that be better for those people who are currently employed by Walmart? Would that be better for people who shop at Walmart?
This goes back to a question I have asked twice before (and still unanswered)... would it be better for America if Honda, Toyota, BMW, VW didn't open manufacturing facilities here, instead did so in China or Mexico where things are cheaper? Is it better for America that GM chooses to manufacture and import goods into America as opposed to manufacturing them here?
gagrice: The housing bubble is bursting around us. Foreclosures at an all time high, even with the ridiculously low interest rates.
The housing bubble is bursting precisely because it was a bubble. What we have witnessed over the past five years with housing prices is not normal appreciation.
It was a market driven by the get-rich-quick mentality and good, old-fashioned greed, buttressed by wishful thinking on the part of buyers ("real estate never goes down" - WRONG), not mention banks and mortgage brokers approving mortgages to people who could not possibly afford them.
This correction is a healthy sign, not the end of the world.
gagrice: I am buying a house that the owner paid $100k more for just a year ago. He cannot make the payments. He was hoping to make a profit and get out before his interest rate went higher.
Which proves my point. Too many houses were being bought by "flippers" and investors to make quick buck, not as places to live. As this type of buyer leaves (or is forced from) this housing market, prices will return to a more realisitic level.
Yeah, there are plenty of new jobs being created and the Average Joe needs two or three of them just to survive! There will also be plenty more work available when all those Three-Job-Workin' Joes die at an early age due to sleep deprivation, poor nutrition, and lack of health care benefits.
Don't tell me - the dummy took out a variable rate mortgage? Heck, I'm glad I got my place before the real estate market went totally psychotic. I couldn't even afford my own place today.
I bet Lemko found the GS to be on the tight side. The rear seat accomodations on Lexus cars tend to be on the small side from what I've found. The LS is like sitting in your living room.
I am not a fan of large cars, but out of them the only one I'd probably buy would be the Infiniti M. I know I am a minority, but I really dug the first generation, it was like a japanese Panther (Crown Vic/Marauder). The 4.5l with 315hp was a muscle car when it appeared. It looked especially mean in black...
Oh I like the M45 as well. I had one in a few days ago that was blue with cream leather interior and matte finish Cherry wood. None of that shinny fake looking plasticy wood.
That was a hot looking car.
The Toyota Avalon is more like a Last Gen Park Avenue. The Lexus LS430 is more like a late 90s S-Class.
I find the GS rather ugly and am terrified of the maintenance and repair costs of the German makes. I've had my experiences with VW and have seen what my brother-in-law endures with his Mercedes S430.
Yeah, there are plenty of new jobs being created and the Average Joe needs two or three of them just to survive!
We have the best higher education system in the world. Community colleges are essentially free. If a person chooses to not avail themselves of a higher education, then why be surprised that they have to compete with unskilled labor from other countries? That's a choice everybody has. If the Average Joe is that dumb then I'm not overly sympathetic.
Comments
I said what incentive does ANY foreign mfr. have to build here IF the big 3 went belly up. I believe there is none. That's not to say they won't stay, as they could.
Right now, if they pulled out they would have to live with the stigma that the Big 3 deal with in closing plants, as well as importing the autos from wherever they are built. This COULD lead to a big backlash. I'm sure there are people out there, if polled, who ONLY feel comfortable buying "foreign " cars because they are mfrd. here.
Again, IF the Big 3 went belly up, what would stop the foreign companies from going home and just importing cars here????
Its cheaper for many of them to manufacture here than in their home countries.
I'm very happy with my two Buicks, thank you. I looked at Honda and Toyo, again, when purchasing the last Buick. The value for the dollar was much, much greater. After learning of all the problems in the "new" 2003 Accord after owners had them and started posting on forums like Edmunds, I was very relieved to have missed out on the "quality" they gave their buyers.
See, it is subjective, but you can't base everything
2014 Malibu 2LT, 2015 Cruze 2LT,
I mean seriously I drop a H-Body GM car and while they are tanks the Audi will be fine. NO one builds a tank like the Germans.
http://www.euroncap.com/tests/audi_a3_2003/176.aspx
What are you saying here? I need a rerun.
2014 Malibu 2LT, 2015 Cruze 2LT,
Of course it will, with all of the Germans electrical problems, it may never reach 40 mph :P :P :P
I am kind of learning about this now. China is a pain in the butt to start manufacturing because of trade rules there, you have to partner with a Chinese company (thats how GM got Buicks there, and Chrysler is working on it). The other issue is that the labor is inexpensive but the machines costs the same pretty much no matter where they are.
Manufacturing in Mexico isn't so much cheaper unless you go deep into Mexico, and then there are other issues. There is the free trade act stuff, but at the same time, as you pump money into an economy, it improves that economy and it gets more expensive.
When was the last time you filled in gasoline and made sure that the gas you just pumped in had a US tax payer involved directly working in the middle east, or Venezuela? It is utterly ridiculous to be dictated by these trivial issues. So, we can splurge on oil somehow because there are a few Americans working in oil wells in the middle east. But the cost to us is far greater. Thousands of Americans (and millions of civilians) haven't died for cars. But they have for oil. I don't intend to convert this discussion into a political one, but when we concern ourselves with these issues, it is bound to be.
So, you think cargo ships don't deliver oil to our shores? They only deliver automobiles, right?
It was a typo.
When I buy ARCO gas I know it comes from the ARCO refinery and from US oil in Alaska. If I buy Chevron, Shell or Exxon I have no idea, that gas could come from anywhere.
Good for you that you're happy with your Buicks. But that isn't enough for me to go buy one when I know where and what to look at. As you might have guessed by now, not everybody buys on criteria set by you. Strange? I hope not.
And yes, have you driven a Ford lately sounds quite familiar. In fact, it sounds something like commercial from the late 1990s, and before that. The problem is, the competition isn't staying put either.
How in the world did you get the idea that I'm trying to get you to agree with me. You're the one having trouble with choices others make. I'm perfectly fine with whatever choices you make for yourself. For me, the best product gets my money.
Tomorrow, if I buy a TV. It won't start with ripping the pieces apart and carefully examining every component to ensure it is made in America. I refuse to make my life miserable.
Are you pointing at Saturn Aura? Astra?
Would it be cheaper for them to go to China or S. Korea, or even Mexico???
Apparently, it is cheaper for GM and Ford to manufacture their vehicles there. Why would things be different for others?
The very assumption that Honda and Toyota will wrap up from manufacturing in America if big-3 go belly up is, simply put, ridiculous. They are doing so, for a variety of reasons, and profitability is right on top. Why wouldn't it? They aren't stupid. Are they?
So, at least be happy about them helping create jobs in America. Or, would you rather see them close those shops as it would be better for America? (thats a question, I expect an answer for).
Whatever gave you the idea that most of the money you paid for your Toyota wound up in a Tokyo bank? Have you ever bothered reading an Annual Report? First of all, ony about 6% of the money you paid is profit. 94% went to pay workers, benefits, property taxes, supplies, advertising, utilities, leases/real estate, etc, right here in the good old USA. Also, (again if you bother to read Toyota's annual report), their "Depositary and Transfer Agent for American Depositary Receipts" (i.e. your money) is...
The Bank of New York
101 Barclay Street,
New York, NY 10286, U.S.A.
I didn't know New York was located in Tokyo!!!
By the way, if you buy a Dodge truck, are you concerned that all the money you paid is going to Stuttgart (Headquarters for DaimlerChrysler), into some "German" bank??
I think some of it might be invested in, say, China. "Chery" seems to be the new fad. :P
Some money assuredly ends up overseas, but before that as you noted from the annual report...
They had to pay to build a plant ( laborers, eoncrete, steel, etc )
They had to design the vehicle, then test it and retest it and crash it and recrash it and retest and recrash, etc.
They had to buy steel, aluminum, glass, tires, copper, seating, welding wire, water, heat, electricity, etc.
They had to pay labor.
They had to transport it.
They had to pay to advertise it ( HUGE expense !!! )
They had to market it from initial studies to training at launch.
They had to finance it and pay the dealers their commission to sell it ( holdback )
Oh, and then they could add a profit....But...
Then 50% of the Net Profit approx had to be sent to our Uncle Sam, plus local taxes and state taxes
( so far nothing has gone back to XXXXX yet )
But after all is said and done..according to the Annual Report.. about 6% is available for repatriation.
But then a certain amount is 'expatriated' in the form of dividends to investors in Hong Kong, Dusseldorf, London, Dubai, NY, SF, LA, etc.
Edit: I was referring to imports abandoning manufacturing in this country
That's another tidbit of outdated opinion.
Almost EVERY foreign carmaker has plants in the USA. There are no "jobs permanently lost" when American carmakers cut back workforces - those people are hired elsewhere.
Buying "made in the USA" because you think that by not doing so you are "hurting Americans" is a ridiculous way to go about life.
Want proof?
Look at our unemployment rate - one of the lowest EVER.
Look at the amount of products sold in America which are made elsewhere - the HIGHEST ratio ever.
Point made.
The same reason they all have plants here now. MONEY !! PROFIT !!!
It costs them a LOT MORE to make and ship a car from Japan than it does to make a car right here in the USA and ship it by truck a few hundred miles to the dealer.
Why do you think Toyota and Nissan have both recently opened huge new plants here? For the MONEY HUNNY.
How many of those are middle class jobs? There are lots of restaurant/fast food type jobs paying near minimum wage. There are lots of people who aren't counted in the unemployed who used to be factory workers making things but are jobless. The middle class has disappeared.
To wit: the government brags about new jobs, but they never compare to the jobs lost and what the pay rates were. Even the local city has done the same thing through the deades as industrial plants closed that used to employ people at good wages and those jobs were replaced by a fraction of the number but at low wages. They make good political fodder but don't address the problem of the country.
As for the factories moving to Mexico or Japan or elsewhere for the plants built here. You might take note that Toyota is attempting to lower the wages for their factories to the "prevailing" wage in the area. They are feeling pressure on wages. They have employed more and more temporaries in factory jobs that should be permanent jobs. Why aren't they?
The undervalued currencies make it cheaper to build and import. The reason they are here was because the government made them build plants here to avoid the tariffs of the 80s and 70s and that was a way they could circumvent the intent of the laws here. I'll leave the exact details of the pressure to build and assemble here to people with better social studies recall...
2014 Malibu 2LT, 2015 Cruze 2LT,
The middle class is changing, as the old paradigm of getting a relatively high paying job without any education beyond high school (or even without a high school diploma, as was the case in many auto and steel plants) is vanishing. But that calls for better preparation, not banning imports or whining about people who buy a Toyota instead of a Chevy.
He also noted that contrary to public perception, the majority of new jobs pay well and are not in the fast food industry. Of course, they may not be unionzed jobs, which means that the UAW or USW won't be collecting union dues, but that is not necessarily a problem for society as a whole. And you may need some additional training beyond high school to get one.
The Japanese are building plants here because, in the long run, for new vehicles, it makes sense for companies to tailor their products for local tastes and conditions and then build it locally. GM and Ford have been doing this for decades in Europe, South America and Australia, and the residents of those countries aren't complaining that some of the profits generated by the sale of vehicles in their respective countries may end up in Detroit.
Toyota is worried about labor costs, as ANY well-run company is. (And "lowering wage costs" is NOT synonomous with wage cuts. It more than likely means minimizing future increases in wage costs. There is quite a difference, but the UAW and Toyota-bashers prefer to skip that part.)
The problem isn't that Toyota is trying to keep a lid on labor costs. This shows that Toyota is a well-run company that can actually think beyond the day after tomorrow.
The problem is that an arrogant Big Three and UAW thought that they could pass continually escalating labor costs on to customers, because they owned about 90 percent of the market. Well, it's not 1965 anymore. But it's easier to whine, and blame currency manipulation, Consumer Reports, people who buy Hondas and Toyotas or the latest cause du jour, than to make real changes that would eliminate, or at least greatly reduce, this handicap faced by Detroit.
Regarding currency manipulation - the actual exchange rates between the yen and the dollar have varied over the years. Somehow Toyota and Honda have kept growing, even when the exchange rate wasn't to their supposed advantage.
Why? Maybe it's because they stayed focused on the customer, and put the product - not executive bonuses, the stock price, or whether a blue-collar worker might have to make a higher copayment for health care services, or keeping as many union people on the payroll as possible - first.
I believe it was last year when I came across an article (Forbes?) that talked about salaries of top executives that run these companies. A comparison was made between one of the domestic brands and that its one top guy makes as much as Honda pays its 34 board of directors combined. It is a small illustration of what profits and expense to these companies mean and how it affects their bottom line. And then one could consider corporate culture where a company’s CEO doesn’t own entire floor at the top of a high rise, but sits in a cubicle like other employees and right in the middle. It seems, those companies value those 6% in profits a lot more than the big 3.
Long Term Vision:
In the early 90s, big 3 decided to reap the benefits of selling high profit margin trucks. That segment peaked in 1999 and has been going downhill since. As of now, here is how the big-6 rely on truck market (least to most):
Honda: 42.7%
Toyota: 43.0%
Nissan: 46.8%
GM: 59.9%
Ford: 66.6%
Chrysler: 70% (if Mercedes Benz included, 65.3%)
Guess which segment gets affected most with increasing fuel costs. On top of it, consider the fact that the company that relies least on light trucks (Honda) is primarily relying on likes of CR-V (currently the best selling SUV in the USA) which is more car-like than a truck. Not too long ago, likes of GM, Ford and Chrysler were poking fun at vehicles like those, now scrambling to chase that segment (saleswise, Escape isn’t too far behind with 92K units sold this year, and has displaced Explorer at 74K units thru June).
A few days ago I had a post listing compact cars with power and fuel economy ratings (post #4022). The purpose of the post was lost right after as import-badge bashers decided to paint a virtual picture. The idea was to convey a point. For example, when we talk Chrysler vehicles, what is the first thing that generally comes to mind? It is something they have been relying heavily on “hemi power”. Well, there you go. Take the power equation out, and you’re left with nothing! Why is it that these companies fail to look at possibilities, and prepare for the worst?
Why is it that Honda and Toyota can come up with engines that are smaller in size yet deliver performance that most buyers find sufficient? To compete, instead of doing better by way of technology, GM might throw in let us use larger engine and get more horsepower. People like horsepower. It sells. Yes, it does. Does it? Just take a look at bigger picture. Don’t blame Honda for coming up with a 1.8-liter engine that works. Blame yourself for taking poor decisions.
GM, Ford and Chrysler started to put too much emphasis on a market that was a fad. They lost sight of the car segment, and now are looking up and trying to play catch up. While likes of Honda, Toyota and Nissan have managed to attract buyers who actually have a higher median income as well (which also suggests that higher gasoline prices are less likely to affect these brands for that reason than it would for brands whose buyers earn less). Here is how median household income of buyers stack up, best to worst (Source: J D Powers):
Honda: $88K
Nissan: $83K
DCX: $82K (Mercedes Benz included)
Toyota: $81K
Ford: $80K (excludes Aston Martin)
GM: $76K
After years and decades of neglect that led to loss of customers, big-3 need to focus on these two major areas of concern. A change in corporate culture would be a good start, and instead of focusing on “now”, focus on “what ifs”. And no, success won’t happen overnight. And bad-mouthing those who are successful would only hurt more and delay recovery. And time is the last thing they have on their side.
Nissan: $83K
DCX: $82K (Mercedes Benz included)
Toyota: $81K
Ford: $80K (excludes Aston Martin)
GM: $76K
I bet if you take MB out of DCX they fall to near the bottom and I bet if you pull Land Rover and Jaguar out of Ford they fall down to the bottom as well.
What does it mean to buying an American car. I will agree to the fact, that if you buy a Toyota Tundra built in San Antonio that 94% stays in America. You buy a Lexus and the only money that stays in America is the profit the dealership gets.
It is a choice each of us makes when we buy any product. Next to our homes which most of are in the USA, our cars are the next biggest purchase. If you care about our economy you will search out the ones with US made content. I am sure there are many that will fit in every budget and brand preference. It is all part of keeping America strong and our economy healthy.
I also agree that executive salaries in this country are out of control. It will be a factor in our demise. Or at least when we just become a serfdom. We are closer than many want to believe.
Actually, for my recent purchase, there were only 3 vehicles on the market that approximated my functional requirements and two of those were not affordable (or reliable) - left with one choice, national origin was not even a remote consideration.
A very outdated opinion. That statement mattered in 1975, but matters FAR less today.
Our economy is strong, has been strong, and will be strong, and we have many many MANY billions of dollars yearly spent on foreign-made products flowing through the USA.
Typical Chinese product:
It's shipped and distributed in American (money paid to Americans) sold by companies paying sales and property taxes in AMERICA who are paying employees who live in AMERICA, and all the middlemen are in America, and the users of the products are in AMERICA.
It does not matter if it's made in America - Americans are a large part of the long money chain.
Do you mean like Walmart? Have you checked the salaries paid to their employees, managerial and store workers, many of whom are parttime?
>sold by companies paying sales and property taxes
Do you mean Walmart or Biggs (French)? When did companies pay sales tax? That's paid by the consumer.
>and all the middlemen are in America,
The current business plan has no middlemen--Walmart.
>nd the users of the products are in AMERICA
Yup, users are here, for now, in America.
But what's missing is the extra high pay for executives of the companies that import the product. And what's missing is the US citizen making the product for a good wage-not slave labor or 50 cents per day in a foreign country so an US or other executive can have a hideously high salary and take from the company.
Maybe a good exercise for you learn about manufacturing vs importing would be to follow Nike products and trace how much of the money from a $200 pair of shoes goes to the worker in China or wherever, to the company executive, to the distributor or stores directly...
Maybe your son or daughter will be able to have a 50 cent per day job sometime in the future...
2014 Malibu 2LT, 2015 Cruze 2LT,
Companies themselves don't pay retail sales taxes but all their employees do when they buy something.
Every American-sold Chinese or Japanese product generates income to someone in the USA.
And even Walmart middlemen are in America.
We are not talking about one pair of shoes but about billions of sold products in America. Cars too.
The advent of the transplants sped up the process most likely but it was inevitable. To think otherwise is to hope that the status quo was frozen circa 1970. Why weren't these workers who were displaced transferred to building new world class products in new locations?
..inertia, it's very difficult for a worker to uproot himself and his family and move say to a new GM plant in Arkansas.
..work rules, work rules, work rules.
..bad management; instead of fighting tooth and nail for the small vehicle market it was conceded to the imports and transplants.
..fear by management of confronting the UAW.
Here's a couple of eye-opening stats:
Since 1989 auto production in NA has increased by 40%. Almost all of the growth has been in 4c autos. Yes SUV's and trucks have grown dramatically but those switches were from cars and station wagons. The growth in the market has been in the 4c autos. In the 70's these essentially did not exist. Now they account for several million vehicles annually. The domestic makers gave this growth market away.
Would it be better for America if Walmart closed its doors? Would that be better for those people who are currently employed by Walmart? Would that be better for people who shop at Walmart?
This goes back to a question I have asked twice before (and still unanswered)... would it be better for America if Honda, Toyota, BMW, VW didn't open manufacturing facilities here, instead did so in China or Mexico where things are cheaper? Is it better for America that GM chooses to manufacture and import goods into America as opposed to manufacturing them here?
The housing bubble is bursting precisely because it was a bubble. What we have witnessed over the past five years with housing prices is not normal appreciation.
It was a market driven by the get-rich-quick mentality and good, old-fashioned greed, buttressed by wishful thinking on the part of buyers ("real estate never goes down" - WRONG), not mention banks and mortgage brokers approving mortgages to people who could not possibly afford them.
This correction is a healthy sign, not the end of the world.
gagrice: I am buying a house that the owner paid $100k more for just a year ago. He cannot make the payments. He was hoping to make a profit and get out before his interest rate went higher.
Which proves my point. Too many houses were being bought by "flippers" and investors to make quick buck, not as places to live. As this type of buyer leaves (or is forced from) this housing market, prices will return to a more realisitic level.
I am not a fan of large cars, but out of them the only one I'd probably buy would be the Infiniti M. I know I am a minority, but I really dug the first generation, it was like a japanese Panther (Crown Vic/Marauder). The 4.5l with 315hp was a muscle car when it appeared. It looked especially mean in black...
That car was all attitude.
That was a hot looking car.
The Toyota Avalon is more like a Last Gen Park Avenue. The Lexus LS430 is more like a late 90s S-Class.
This was the first M:
The one I saw had wood like this but not as much of it so it was a little more tasteful.
We have the best higher education system in the world. Community colleges are essentially free. If a person chooses to not avail themselves of a higher education, then why be surprised that they have to compete with unskilled labor from other countries? That's a choice everybody has. If the Average Joe is that dumb then I'm not overly sympathetic.
link title
I guess I can see the idea of it looking like contact paper but if the wood wraps around things so you can see the edges then that solves the problem.
The wood in that picture is about a 1/4 inch thick.