Trading Places With Asian Manufacturers
SEARCH BLOG: AUTOMOBILES
Not sure when this was written, but it is something I have discussed in the past.
I'm not sure we want to restrict our markets as much as we want them to free up theirs. The issue: they won't. Why? Because they understand the importance of building and protecting a manufacturing base for the health of their economies... something we don't as a financial and service market oriented economy.
[H/T Howard Jacobson]
Saving GM From BankruptcyProfessor Kroth is not an economist, but that doesn't preclude him from make the case for the obvious.
By JERRY KROTH
The media constantly bombards us with one set of facts, but the other set doesn’t get much play. We hear about GM struggling, about bailouts, bankruptcy, and massive layoffs. And we hear about how Toyota and Nissan will fill the vacuum created by any GM or Chrysler bankruptcy.
But what we don’t hear about is very interesting: We don’t hear that last year Japan imported a whopping 8,000 Fords. You heard right! The Japanese bought 8,000 Fords, but Toyota sold two million of its automobiles here. And thousands more for Honda and Nissan.
And we don’t hear that the average GM car in the US costs about $25,000, but in Japan the same car costs $50,000. A big mark up, lots of restrictions. No one calls that protectionism, but that is what it is, and what it has been for years.
There is a social stigma in Japan for buying and owning an American car. The only folks who buy them are social undesirables and underground figures like the yakuza, the Japanese mafia.
If there was a law that required that Japanese and Korean car manufacturers would be allowed sell the same number of cars in the US that were imported into Japan and Korea—that the playing field was equalized—well, guess what would happen: GM, Ford, and Chrysler would start filling the vacuum created by the sudden absence of Toyotas, Nissans, and Hondas from American showrooms, that’s what would happen! Foreclosures and evictions in Flint would stop. Michigan would come back to life, and Toyota City would have to take it on the chin for a change.
A simple solution indeed! Let’s call it the Import-Export Fairness Act. Thousands of American jobs saved; thousands more created. Inner cities would start coming back to life. Sure the Japanese would yell, scream, and protest that they had to start letting their showroom dealers start selling Fords and Chevys at competitive prices. Maybe a trade war would start; maybe they’d cash in their T-bills, but it is just as likely that the bigwigs of Toyota and Honda would hurriedly ask Japanese parliamentarians to open up Japanese markets immediately allowing more American cars to be sold there and thus more Japanese cars could continue to be sold here. Otherwise they’d lose market share, big time!
I’d rather see Toyota lose market share to GM instead of the reverse.
It’s a thought. A thought for every UAW worker facing a layoff, every Michigander fearing loss of his job, pension, and home.
In the days of Jimmy Hoffa and Walter Reuther, a healthy strike by autoworkers and sympathetic truckers would shut our country down until we saw some real action. If now is not the time, well, when is?
Jerry Kroth is a professor at Santa Clara University in California and a former Detroiter.
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