Toyota suspends work on Mississippi Prius plant

If gas prices were still 4$ and climbing wonder if they would be doing this. Crazy Americans thinking its ok to buy the gas guzzlers again. When will we learn

 

I feel a bit bad for you as you dont understand how the world works.

USA is the biggest user of WTO and their free trade policies. USA is biggest govt influencer in the world, and they use political pressure for major US companies to get major jobs in smaller countries. For instance, in my country US company (otherwise with no presence whatsoever) got $6 billion highway building job and we were accepted in NATO 2 years later. They subcontracted all the work to local companies and much lower price... where did profits go? .

US companies are 2nd and 3rd biggest car companies in EU - Ford and GM, as well as in many, many other countries around the world.

More than 60% of GM sales come from outside of USA.

Now, auto companies are just an small pie of US business world. What about Dell, HP, Intel, Microsoft, Google, IBM? What about Banks? What about Oil companies? What about GE?

Just check Forbes list of top 200 companies by sales revenue:
The Global 2000 - Forbes.com

Half of top 20 are US companies.

And you would want US isolated from the world? lol . US would lose a lot more than rest of the world... in fact, most of the world would welcome such policies so they can bring back tarrifs of their own to protect their own industries.

 

The WTO is a joke. How can the US benefit from any trade agreements? Are you saying if the US wasn't in WTO we would have a$2 trillion deficit? Use some common sense on the issue and forget about all the pandering and "free trade" theory, it is theory nothing more, nothing less.

The auto companies a small part of the pie? Acoordiing to your list they are the 5th, 11th and probably the 20th largest companies in the world in terms of revenue. What do yo consider a large slice of the pie?

How would the rest of the world welcome such a move? Japan exports to the US almost as many vehicles as it sells in the entire Japanese market. We are running a $trillion /year trade deficit, how could it hurt us? I am not saying there wouldn;t be some short-term pain but show me how it would hurt the US to stop trade tomorrow?

I liken the situation to a family that works for Wal-Mart and makes $60,000/year but purchases $80,000/year form Wal-Mart, how does the family ever get ahead?

 

lol

Again, you have this small town mentality and dont understand how world works.

In this case, all the profits go to USA - again, GM sells only 40% of its cars in USA. And in fact, they are profitable in rest of the world - China and Europe where they are 1st and 2nd biggest company... where do those profits go? To support union labour in USA . So you would like GM to cut 60% of its company, and all of its profits? You think that would benefit GM?

What about countless other companies - like IBM, Intel, Microsoft? What about those US oil companies?

It would hurt USA because most of the companies in the USA work outside of USA, and bring profits back to USA, which are then taxed.

USA would not get hurt if it stops free trade agreements, most major companies - like those top 10 would go out of business.

Smaller countries like mine would definetly benefit, since they dont produce anything or own anything more, except for retail stores (if that).

You do understand that even in China, biggest car companies are from USA? And they get all the profits? Even if they export cars to the USA, which is then counted as deficit, profit goes back to USA.

Let me give you some stats:
2007 China vehicle sales

1. GM: total of 1,031,974 vehicles
9. Geely: 219,512 vehicle.

Geely is only independent Chinese company in top 10.

How did that happen? WTO. 10 years ago, american companyes did no business in China. Now they own thousands of plants which have cheap labor and half of the profits go back to USA... and China has to lower its company requirements due to WTO agreements and within few years companies will be 100% foreign owned.

But hey, chinese produce Levis jeans for $10 per month so you know, they are doing great and taking away american jobs

 

So I have a small-town mentality because I don't want the rest of the world to be able to dump their products here and exports US dollars and jobs? Our manufacturing base has been decimated and if Detroit goes down it ill be the death blow to the US economy as we have known it.

I don't understand how the world works? How does this sound? The Us has the largest consumer economy in the world and we have allowed anyone to trade here no matter what the cost to the Us in terms of cash flow, jobs and wealth. WE have allowed this to go on for close to 40 years and now we have found out that we are out of money and could soon be out of credit. It is time to circle the economic wagon, so to speak, and rebuild the once mighty USA. If I am labeled as uncultural, or small-town, or un-worldly I can handle it because I know I am right.
On china, you are telling me the US is in better economic shape today than it was 10 years ago because of the business it is doing with China? C'mon you know better than that.

 

you keep repeating the same things over and over.

So you think that GM would be better off they close their profitable foreign companies and do business only in USA, where they lose money? I guess same goes for Ford?

And how about Microsoft, HP, Dell, Intel? You think their workforce would like to be closed off foreign markets where they have almost no competition at all? What about biggest oil companies in the world, whose profits go back to the USA?

Reason US got to be largest consumer economy of the world is due to US companies doing business in rest of the world, where they have no local competition anymore.

Quite few wars started over that.

I mean if you think that it is better for US to have jobs that Chinese do for $10 per month, than to have engineering jobs and profits, then hats off to you.

But hey, I agree with you. I understand where you come from. I dont want American, German and Japanese companies selling me products while my countryman work in coal mines as americans wouldnt work in coal mine for $90 per month.

I want us to own everything, and produce everything... instead of buying it from western companies.

Do you think thats also better for USA?

So I quite understand where are you coming from, I am just saying that it is US in whole that benefited from WTO... Yes, there are some people with basic skills that lost jobs, but a lot less so than in other countries. In fact, in my country unemployment rate is 40%. And it was less than 10% before we opened up to the west and before we bought 98% of western products.

Fact is WTO brings profits to rich countries who have money and engineering skills to rule the world. It moves lower paying jobs to less developed countries so host companies (such as Gm, Ford, IBM, Dell, Microsoft, IBM, etc) can be more competitive and create more profits for their wealthy investors and governments.

It sucks if you dont have skills to be competitive in todays job market and if your $10 per hour job got moved to China, but the fact is that move financed more profits for company, country and investors and as result more higher end jobs were created because of that.

 

p.s. if GM didnt have china as profit generator, it would have failed a lot earlier than today. Same goes for south america and south korea where GM is now 2nd in market.

 

This is not by law it is in agreements between manufacturers and dealers. It is no different than agreements between US manufacturers and their dealers. My local VW dealer also sells Saturn, GMC, and Volvo. Each brand has a separate building on the 4 corners of the property. This practice is the industry standard now.

In my opinion it is not the Japanese government that limits sales of US products in Japan it is the Japanese people. I worked for a Japanese company for 5 years. I worked with Japanese nationals in the US and visited Osaka 6 times. In my experience the Japanese people are very nationalistic and this extends to everything they do. My coworkers bought very few products that weren't made by a Japanese company. They saw it as their duty to help their country by supporting Japanese companies.

This happened on the corporate level as well. My company paid next to nothing in US taxes because our plant showed no profits from 1988 to 2005. It was very profitable but the Japanese parent would charge above market values for parts they supplied in order to show the profits in the Japanese company not the US subsidiary. When the IRS shut down that practice they started charging an engineering and consulting fee and started calling in the paper debt accumulated over the previous years. The reason? It is better to pay taxes to the Japanese government that supports the Japanese people with public works, pensions, and health care.

The Detroit 3's product mix doesn't help. Japanese regulations and tax policies discourage large vehicles and large engines. My general impression was that a vehicle the size of a Honda Fit or Toyota Yaris was considered a fairly large family vehicle. In order to break into the Japanese market, the Detroit 3 would need to build vehicles specifically for that market. So far they have not been willing to do that but instead have focused there efforts on developing markets. The other option is to buy part of a Japanese company which Ford did with Mazda and GM did with Isuzu and Subaru. Their problems in the US market has forced them to sell off those assests.

And the US has always had a policy of keeping the dollars strong so we pay less for imports.

Well the large US Agricultural corporations would be pissed if you suddenly stopped trading. They export $10 Billion a month, $98 Billion so far in 2008. The military industrial complex would be upset too. The US has effectively become the arms supplier for the world. Lockheed Martin charges ~ $600 million each for a Joint Strike Fighter and maintenance parts and support. With project sales of 700 to friendly countries, that would be 420 Billion out of Lockheed's pocket for just one product. The list goes on and on.

 

Why would the US want to encourage imports? How does this help the US? There is no doubt there would be some pain in certain sectors, but in the big picture we are getting killed.

 

So that Americans can afford the clothings, food, tools, electronics and toys for your kids.

If it is not the cheap products from China, US will be in deep recession decade ago.

You have to think it is a world economy now and US is part of it. US is no longer the center of the world, accept this.

 

So that Americans can buy more stuff that they don't need to satisfy wants they didn't know they had. And to lure more foreigners to our malls to ... shop.

Low prices actually help those with less income. It's a capitalistic form of socialism, come to think of it.

 

you don't understand, without jobs or certainly without good-paying jobs what can anyone buy? Why do you think real-wages ahve been going down. The world economy is largely myth like free-trade. I am not saying there is not commerce between nations, but the positive balance of payments is what all of the nations(except the US) is after and without exporting to the US this is largely an imposiiblilty.

 

You still not getting the point.

You are correct the real wages is going down, in order to have the same level of standard of living, you would have to have cheap product to buy.

 

why are the real wages going down?

 

Inflation!!!!

 

With respect, Wth have the last 20 or so posts got to do with Toyota suspending work on the Mississippi Prius Plant ? If you want to start a topic on economics or the wealth of nations, start a separate thread.....:focus:

 

Inflation? Shouldn't inflation be a reflection of the cost of goods?

 

That's correct. The cheap imports keep the inflation rate below 5% for the last 20 years. In the early 80's, inflation is above 10% before the cheap imports started to arrive.

EOD

 

Yes, the thread started with Toyota suspending work on their new Mississippi plants. The facts are simple and have been stated. The interesting part is WHY they suspended work on their new plant. :rockon:

 

Thanks. I accept the facts are simple and have been stated, so what have posts from say number 53 got to do with the facts ?