Toyota, Yen, American Content: Getting Facts Straight

[YSSMAN]

A repost from GMI:

From Congressman Joe Knollenberg's website :

The Yen, Domestic Content, and Toyota
by Rep. Knollenberg
April 30th, 2007


The Detroit Free Press ran a big story on the frontpage of its business section yesterday that showed the vast differences in the domestic content of vehicles from GM, Ford, Chrysler, and Toyota. The American car companies all had domestic content percentages in excess of 7o percent. Toyota came in below 50 percent because nearly half of the vehicles it sells in our country are imported (this is roughly the same percentage of imports Toyota had in the 80s before it began “investing in America”).

Toyota is working overtime and spending lavishly on political ads to convince the American people and American policymakers that there is no economic difference between buying a Big 3 vehicle and a Toyota vehicle. Nothing could be further from the truth.

Toyota employs 34,000 people in America. The Big 3 employ nearly 400,000 people in America. The Big 3 build 7 out of every 10 cars made in our country. The Big 3 purchase almost 80 percent of all U.S. auto parts. The Big 3 impact more than 7 million jobs in America. Toyota and all of the other foreign companies combined impact less than 2 million jobs.

The vast difference in the economic footprints of the domestic car companies and Toyota points up the importance of the yen issue. Because Japan manipulates its currency, Toyota and the other Japanese automakers have a big competitive advantage over the domestic industry. Toyota derives a $4,000 to $10,000 per car edge over the Big Three because of yen subsidies on its imported vehicles and parts.

If you haven’t voted in my online poll on yen subsidies and Toyota’s unfair advantage, do so now by clicking here.

P.S. - Last week, Toyota sent some company officials to meet with my staff in DC. After the Toyota officials learned of my concerns with the yen subsidy, the participation in my online poll skyrocketed from 250 participants and a 96 percent YES vote on doing something about the unfair yen subsidy to more than 1,700 participants with a 70 percent do nothing on the yen vote. Coincidence? You decide.

Hmmm, very interesting indeed. With all the (American) flag-waving being done by Toyota, things aren't quite what they seem. Too bad the mainstream media cares not to print stories like this, much less cover these events that occur on Capitol Hill.

Discuss.

 

[Pupik]

The vast difference in the economic footprints of the domestic car companies and Toyota points up the importance of the yen issue. Because Japan manipulates its currency, Toyota and the other Japanese automakers have a big competitive advantage over the domestic industry.

So the Yen is stronger than the U.S. Dollar, because the rest of the world doesn't see the dollar as strong a currency as it once was. There's many different ways to define how "valuable" a unit of foreign currency is, and currently, the U.S. Dollar is weaker than before because of many different factors:

For one, the dollar is weaker than before because many raw materials and goods are imported. It's a global economy now, international investors are spreading their wealth to other nations rather than putting it all in one place.
I realize that this is a bit of a circular argument, but are politicians supposed to tell us how to invest? Or what to buy? Or to tell American manufacturers where to build and import goods?

With so many environmental and labor restrictions versus the fact everyone wants to save money, you're playing tug of war with people's wallets, by enforcing an American-only policy for consumption of goods.

I'd like to see an all-American car in my driveway, an American-built TV set in my living room, or an entirely American-constructed computer in my office. But it's not likely to happen, as consumers want a holy grail of quality, value, and cutting-edge technology...not to mention, we want it readily available, and the stockholders want to the product and corporation to be profitable in doing so.

It will be hard, although not impossible, for this to occur. Politicians are already enforcing this with taxes and other levies, but stuff like that "100% import tax" that thankfully failed at the last minute (back in '95), is a wrong-headed approach to economic isolationism, and a potential downward spiral of fortune for many more American workers in manufacturing and service industries.

 

[YSSMAN]

I really don't disagree with you, but it has been floating around for a while that Japan has been manipulating the Yen for Toyota and Honda, and I still find it odd that the Government had never really taken the time to pursue these issues... Particularly when we're in all of these fair-trade talks with the EU and China.

Either way, the most interesting part of this I thought was to counter-balance Toyota's Flag-Waving, saying that "If you don't buy our products, you aren't helping Americans."

...Obviously, that is only a slim, partial truth. Not buying American, generally speaking, is far-worse, but that being said, whole international game is coming into play these days, so a majority of stuff isn't going to be 100% Japanese, 100% American, 100% German, etc.

Still, some of the facts are important to consider, and quite frankly, its unfortunate that these figures haven't been made public outside of Detroit.