bailout plan may widen to more industries

[maladroit]

"why does Toyota have US factories when they can get lower labor input elesewere??? "

- there are a lot of reasons for that...import tarriffs, stringent US vehicle regulations that cost a lot to modify imported cars, buy american psychology, expensive transportation costs, and US government pressure/threats on foreign auto manufacturers...that's just off the top of my head...let me turn the question back on you: why do toyota and other japanese auto manufacturers still export $54 billion worth of automobiles, auto parts, and accessories to the usa in 2007? why are US vehicles barely making a dent in the japanese market?

[GoldenBoy812]

"why does Toyota have US factories when they can get lower labor input elesewere??? "

- there are a lot of reasons for that...import tarriffs, stringent US vehicle regulations that cost a lot to modify imported cars, buy american psychology, expensive transportation costs, and US government pressure/threats on foreign auto manufacturers...that's just off the top of my head...let me turn the question back on you: why do toyota and other japanese auto manufacturers still export $54 billion worth of automobiles, auto parts, and accessories to the usa in 2007? why are US vehicles barely making a dent in the japanese market?

You missed the most important one. The productivity of the American auto worker. Combine that with the high cost of transportation of larger goods, and there is something good at work. American jobs are created, without a labor union as their representative backer. Which begs me to ask, how is this possible when GM pays much more in labor costs, yet productivity is relativily similar? The answer is, it is not, as we can see with GM's current financial situation.

US auto producers would not be allowed to own any factory operated in Japan, which is a law against foreigners holding the means of production in Japan. Therefore the cost associated with reducing transportation costs are non existant in retrospect to Toyota's ability to build heavy/ large goods here i the US. Protectionist measures have then succeeded in reducing the ability of entry (lack of free market) on many levels of Amercian cars in the Japanese market.

[maladroit]

if the productivity of the american worker is so high, why is the usa importing $54 billion worth of cars and car parts from japan? that doesn't even include the cars the usa imports from other foreign countries

[GoldenBoy812]

if the productivity of the american worker is so high, why is the usa importing $54 billion worth of cars and car parts from japan? that doesn't even include the cars the usa imports from other foreign countries

:jointsmileUS worker productivity exceeds that of Japan):jointsmile:

The same reason any company would import, it is either too expensive or inefficient to produce in the US. For example, would it be more profitable to produce a part using more automation that is allowed due to the lack of labor unions demands, or building them here paying union labor with less automation? Consumers make up for the decreased cost in purchasing. The unions that represent the workers (UAW) of the big three US makers are killing off the businesses that employ them. The airlines, automobile, and teachers unions are three big examples where the industry they represent is failing.

BTW, over 45% of the US auto market is foreign. I would expect big imports from Japan.

[maladroit]

why is 45% of america's auto market foreign if us productivity is superior?

even without unions and superior productivity, usa workers are unable to compete with labourers making $250 a month in china (a country that has much stronger productivity growth than the usa)...as i said earlier, japan and especially japan's auto industry isn't a good example because it has the highest wages in asia...most of the rest of asia's low wages overcompensate for their lower productivity

[GoldenBoy812]

[quote=maladroit]why is 45% of america's auto market foreign if us productivity is superior?

even without unions and superior productivity, usa workers are unable to compete with labourers making $250 a month in china (a country that has much stronger productivity growth than the usa)...

Their economy is growing due to population, as well as the implementation of market mechanisms. US productivity was at 100%, and in times of recession we could very well see US productivity over 100% due to the cuts in production and potential high unemployment.

as i said earlier, japan and especially japan's auto industry isn't a good example because it has the highest wages in asia...most of the rest of asia's low wages overcompensate for their lower productivity

Keep in mind other input costs along with capital expenditure required to produce in say China. Most multi-national productin facilities are not intended for the short run, which is why wage barriers force jobs out. This is not necessarily a bad thing, as new skill sets come into demand therefore further increasing productivity.

[allrollsin21]

:jointsmileUS worker productivity exceeds that of Japan):jointsmile:

The unions that represent the workers (UAW) of the big three US makers are killing off the businesses that employ them. The airlines, automobile, and teachers unions are three big examples where the industry they represent is failing.

Close but not quite. Poor management is what is ailing the US Automakers. Poor decision making. Gambling.
Repeat after me...SUV.
Gas prices rising.
People don't want SUV's.
No more capital.

[GoldenBoy812]

No it is the Unions. Why does Toyota have no problem placing manufacturing plants throughout the midwest? They are non union, therefore they do not have to deal with the overhead discrepancy. Why else is GM buying out employees?

[maladroit]

the unions may be hurting US automakers by foolishly clinging on to hopeless ideals like living wages and job security and benefits, but those automakers were doing very well not too long ago even though they had unions...if you kicked out all those unions tomorrow, it wouldn't create a demand for poorly built gas guzzlers...the us auto industry misjudged the market by focusing on big engine cars and light trucks, and had to cut prices, issue low interest loans to high risk customers, and offer incentives to get rid of excess inventory...in contrast, toyota doesn't build cars until there is a demand for them


toyota doesn't build cars in america just because of unions or american productivity...toyota is building a new plant in mississipi because of: "fears among company executives about a U.S. political backlash over imports...They also need another plant to address their rising imports, which have gotten quite high."
Toyota to build $830 million plant in Mississippi - International Herald Tribune


the us government has a history of threatening japan over auto imports...back in 1980, the reagan administration bullied japan into voluntarily reducing it's vehicle exports to the united states (they started building cars in the usa within 3 years)...later the clinton administration threatened to impose 100% tariffs on japanese cars unless japan forced it's citizens to buy more US cars (!!!)...those tactics are why japan builds cars in the united states:
Averting an Automotive Trade Wreck With Japan

[GoldenBoy812]

Japan builds cars in the US to offset cost of shipping large products thousands of miles. It is much more logical to produce the most spacious aspects of production near the market area if the labor pool is able to achieve production efficiency (not just cost efficiency). There is no union representation, where as GM, Ford, and Chrysler have to deal with the UAW.

The US auto market is the largest in the world, and cost efficiency is killing off American automakers. This should be apparent...