If We Really Want to Save the US Auto Industry

[carman21]

If we really want to save the US auto industry then we got to do something bold.

1) Detroit has no independent market share above 1% in any East Asian market and as such we should kick out the Japanese and Koreans from the US and keep the Chinese and Malaysians out of our market.

2) Restrict all Foreign automakers to a 20% combined cap in market share.

3) Restrict all Foreign automobiles to be sold under $30,000 and above $150,000.

4) Restrict all sales of Foreign automobiles to those built in the US.

5) Work to force out the Asians throughout the Americas and all of Europe.

What will result from this radical departure in US policy?

-US Automakers are given at least an 80% share of their home market.

-US Automakers secure their 20% market share abroad in the EU, Russia, and India.

-US luxury brands regain 100% of their home market.

-Audi, BMW, Jaguar, and Maserati will cease operation in the US.

-Bentley, Mercedes-Benz, and Rolls Royce will be the only remaining European coachmakers in the US.

-Lamborghini, Ferrari, and Porsche will remain in the US.

-In addition to VW, we will get more EU auto brands like Peugeot, Citroen, Fiat, Seat, Skoda, and Renault.

-Cadillac pulls out of Britain, Germany, and Italy

-China ends its parasitic relationship with foreign automakers leading the the demise and isolation of the Chinese auto industry.

-Japan and Korea become regional players as US and EU automakers reassert their dominance in the global auto industry.

Alas, this is only a pipe dream and will never happen. Although its interesting to think about the possibilities.

Too bad the free market has been perverted so far that it merely means the constant erosion of US companies and industries until they are all gone.

Edited March 30, 2009 by carman21

[PurdueGuy]

Eh, I think competition is good for business, and such aggressive protection of the home industry would likely promote laziness on the part of the domestic automakers. What I DO support is a fair trade policy. Apply the same trade tariffs to cars coming to our country as are applied to our vehicles going to theirs. This would nail the Japanese pretty good, as they make it pretty non-viable to sell American cars in Japan. It gets a bit sticky when you consider the foreign-owned domestic factories, though.

[vonVeezelsnider]

This plan only works if you want to start a trade war... the way to make American Automakers successful is to make them competitive not killing the competition.

[Daryl Z71]

The only way to make America sucessful is to nuke everyone and take everything for our selves! lol!

[Drew Dowdell]

This plan only works if you want to start a trade war... the way to make American Automakers successful is to make them competitive not killing the competition.

To make American companies competative with the Asian's we'd have to:

1. Provide national healthcare.

2. Provide extremely low interest loans to the Big Three.

3. Provide massive grants to new technologies.

4. Instill a sense of national pride towards American designed/manufactured products.

5. Instill a WWII like loathing of all things imported.

6. Set tariffs equal to those imposed on our car makers.

7. Heavily tax all income headed towards the mother country.

8. Set up a testing/approval/licensing procedure for importing products such as it would make the I.R.S. look like a young, flexible, efficient start up company.

9. Require that a certain (high) percentage of products intended of U.S. consumption be produced in the U.S.

[carman21]

Eh, I think competition is good for business, and such aggressive protection of the home industry would likely promote laziness on the part of the domestic automakers. What I DO support is a fair trade policy. Apply the same trade tariffs to cars coming to our country as are applied to our vehicles going to theirs. This would nail the Japanese pretty good, as they make it pretty non-viable to sell American cars in Japan. It gets a bit sticky when you consider the foreign-owned domestic factories, though.

Yes, competition is a good thing, if the Detroit three fail to succeed in a domestic monopoly then some other U.S. automaker will take their roles. Anti-trust laws will ensure a domestic free market. Tariffs in manufacturing matter little to Toyota or Sony. If we impose high tariffs on their imported products, they will just build them in America and still destroy American companies. Only barring companies from nations that are hostile to foreign companies will help faciltate truely free markets both there and here. Japan, Korea, Chjina, and their ilk are highly protectionist of their domestic industries and hostile towards foreign industries. The Asians have occupied the West for decades, I think its time to Liberate the West.

This plan only works if you want to start a trade war... the way to make American Automakers successful is to make them competitive not killing the competition.

We already are in a trade war that we are losing. Japan, Korea, China, and their ilk are highly protectionist of their domestic industries and hostile towards foreign industries. The Asians have occupied the West for decades, I think its time to Liberate the West. Again competition should be stiff in the domestic market with limited incursions by European companies.

To make American companies competative with the Asian's we'd have to:

1. Provide national healthcare.

2. Provide extremely low interest loans to the Big Three.

3. Provide massive grants to new technologies.

4. Instill a sense of national pride towards American designed/manufactured products.

5. Instill a WWII like loathing of all things imported.

6. Set tariffs equal to those imposed on our car makers.

7. Heavily tax all income headed towards the mother country.

8. Set up a testing/approval/licensing procedure for importing products such as it would make the I.R.S. look like a young, flexible, efficient start up company.

9. Require that a certain (high) percentage of products intended of U.S. consumption be produced in the U.S.

Unions stand to make a killing both in membership and in power if they stop supporting government help for the workers against their employers and provide their members with health benefits, retirement, disability, etc.

Health care and other benefits should not be provided by employers or the government.

Loaning money and giving out grants never work to fix long term problems or create real progress.

Instilling a renewed sense of Patriotism is fine as long as it works. It takes a while for people to regain their faith when its lost.

Being distracted by foreign companies imports 0nly secures their position when they decide to make them here. It still send money outside the US and anchors the enemy in our homeland.

[carman21]

Just to let you know, I support free trade as long as it is fair and equitable for all parties. Nations that refuse to play by the rules should be cut out of global trade and be left to whither and die.

Edited March 30, 2009 by carman21

[Drew Dowdell]

Yes, competition is a good thing, if the Detroit three fail to succeed in a domestic monopoly then some other U.S. automaker will take their roles. Anti-trust laws will ensure a domestic free market. Tariffs in manufacturing matter little to Toyota or Sony. If we impose high tariffs on their imported products, they will just build them in America and still destroy American companies. Only barring companies from nations that are hostile to foreign companies will help faciltate truely free markets both there and here. Japan, Korea, Chjina, and their ilk are highly protectionist of their domestic industries and hostile towards foreign industries. The Asians have occupied the West for decades, I think its time to Liberate the West.

We already are in a trade war that we are losing. Japan, Korea, China, and their ilk are highly protectionist of their domestic industries and hostile towards foreign industries. The Asians have occupied the West for decades, I think its time to Liberate the West. Again competition should be stiff in the domestic market with limited incursions by European companies.

Unions stand to make a killing both in membership and in power if they stop supporting government help for the workers against their employers and provide their members with health benefits, retirement, disability, etc.

Health care and other benefits should not be provided by employers or the government.

Loaning money and giving out grants never work to fix long term problems or create real progress.

Instilling a renewed sense of Patriotism is fine as long as it works. It takes a while for people to regain their faith when its lost.

Being distracted by foreign companies imports 0nly secures their position when they decide to make them here. It still send money outside the US and anchors the enemy in our homeland.

I'm not arguing the merits/demerits of any of those policies. I'm just pointing out that we'd need to do all of my list in order for things to be equal in terms of global trade. All of those things are what the asians do.

[siegen]

We should save the US Electronics industry first.

[balthazar]

>>"If we impose high tariffs on their imported products, they will just build them in America and still destroy American companies. "<<

That's a tax loophole.

Close it.

Gub'mint adds new taxes as a whim with no opposition. Add a 'business license' fee to all foreign corporations selling product here. Whether assembled here or there should not make a difference- they need the U.S..

[carman21]

I'm not arguing the merits/demerits of any of those policies. I'm just pointing out that we'd need to do all of my list in order for things to be equal in terms of global trade. All of those things are what the asians do.

Oh they were great suggestions, I really wish our leaders actually would touch the topic.

[carman21]

>>"If we impose high tariffs on their imported products, they will just build them in America and still destroy American companies. "<<

That's a tax loophole.

Close it.

Gub'mint adds new taxes as a whim with no opposition. Add a 'business license' fee to all foreign corporations selling product here. Whether assembled here or there should not make a difference- they need the U.S..

Great Idea, or we could eliminate the corporate tax on domestic companies and raise it for foreigners. 60% would be fair enough, heck 90%.

[Robert Hall]

Great Idea, or we could eliminate the corporate tax on domestic companies and raise it for foreigners. 60% would be fair enough, heck 90%.

Couldn't see that happening..all the Senators/Representatives from the states w/ import plants would block any kind of tax change like that.

[ShadowDog]

This would be an arbitrary decision supported by a minority since consumers have shown where they want to buy their cars from.

[balthazar]

>>"Couldn't see that happening..all the Senators/Representatives from the states w/ import plants would block any kind of tax change like that."<<

With the state of the economy --locally, nationally & world-wide-- this is a HUGE source of revenue going untapped. Those that politically oppose securing readily-available international funds instead of yet more taxation risk getting ousted in the next election.

Besides, don't forget; "we're changing the way Washington does business", remember ??

-- -- -- -- --

>>"This would be an arbitrary decision supported by a minority since consumers have shown where they want to buy their cars from. "<<

They'll adapt. :wink:

Edited March 31, 2009 by balthazar

[ShadowDog]

>>"This would be an arbitrary decision supported by a minority since consumers have shown where they want to buy their cars from. "<<

They'll adapt. :wink:

LOL - I'm laughing only because that sounds funny. Truth be told, I suppose if that were the case, many consumers would be forced to re-evaluate their position on just what makes an automobile a good automobile. I would suspect many would simply begin to see that there really isn't all that much different between domestic and foreign and do just as you said; however, the passionate few would never submit. That's the key word here, "submit", simply because this kind of thinking is exactly what hardcore American purists have been waving their flags and shouting for their freedom from government against. That's quite the irony.

[Teh Ricer Civic!]

To make American companies competative with the Asian's we'd have to:

1. Provide national healthcare.

No, merely reducing our corporate tax levels down to like 10% and eliminating most complexity in the tax code will provide more than enough additional money and time for Companies to be able to provide healthcare for their employees. It also will not appreciably lower tax revenues off of these companies since there will be very few loopholes to exploit in the first place and no special deductions other than business expenses of course.

This will eliminate any domestic tax planning activities (as there will be nothing to alter by the planning) which should lead to greater emphasis on core activities and overall increase profits... leading to more tax revenue & healthcare for more.

2. Provide extremely low interest loans to the Big Three.

Bankruptcy works just fine too, your best performance often comes under the highest of pressure.

4. Instill a sense of national pride towards American designed/manufactured products.

5. Instill a WWII like loathing of all things imported.

Both of these are fine as long as it doesn't appear that it is the government instilling this domestic pride because if it does it will spark a trade war.

[Drew Dowdell]

This would be an arbitrary decision supported by a minority since consumers have shown where they want to buy their cars from.

The playing field is not even. How "great" would the Accord be if Honda had to pay the healthcare and pension liabilities GM does?

Conversely, since the Malibu is now arguably on equal footing with the Accord and Camry, how much better over the imports could the Malibu have been if GM didn't have the healthcare issue?

[Drew Dowdell]

No, merely reducing our corporate tax levels down to like 10% and eliminating most complexity in the tax code will provide more than enough additional money and time for Companies to be able to provide healthcare for their employees. It also will not appreciably lower tax revenues off of these companies since there will be very few loopholes to exploit in the first place and no special deductions other than business expenses of course.

This will eliminate any domestic tax planning activities (as there will be nothing to alter by the planning) which should lead to greater emphasis on core activities and overall increase profits... leading to more tax revenue & healthcare for more.

Bankruptcy works just fine too, your best performance often comes under the highest of pressure.

Again, I'm not arguing the merits or demerits of any of these policies, merely stating what would have to happen to make the playing field level.

Both of these are fine as long as it doesn't appear that it is the government instilling this domestic pride because if it does it will spark a trade war.

Spark? The trade war is over 30 years old. We've been playing the part of France circa 1941. We put up some resistance here and there, but mostly we've just surrendered.

[redtruck]

Since the government is now involved it the American auto industry make all tax credits or breaks available on US cars only. This should not include a foreign car assembled in the US.

There always should have been a tariff on imports.

[Teh Ricer Civic!]

Since the government is now involved it the American auto industry make all tax credits or breaks available on US cars only. This should not include a foreign car assembled in the US.

There always should have been a tariff on imports.

Ugghhhh that would only serve to increase prices on ALL automobiles. The Domestics would realize that they can raise prices simply because the imports now have to charge higher prices as well. PLUS, it would severely reduce the Domestics incentive to substantially improve their products, after all they can simply now focus on cost cutting and if sales begin to sag, they can simply lower prices, its not like the Foreign cars will be able to do the same. The tax credits would only reinforce this position.

As for the tax breaks, you can expect governments of Germany, France, and Japan to retaliate severely, which would send us into a depression era trade war (and probably a Depression to boot).

Yeah, i'd rather not have either of those two.

[balthazar]

>>"The Domestics would realize that they can raise prices simply because the imports now have to charge higher prices as well.

....it would severely reduce the Domestics incentive to substantially improve their products..."<<

Maybe down the road, once a Return To Prosperity is realized, but not now- they need 1. profit, and 2. volume (in that order). TO clarify- they SHOULDN'T do these things; one would hope the lessons have been learned by now.

>>"As for the tax breaks, you can expect governments of Germany, France, and Japan to retaliate severely, which would send us into a depression era trade war (and probably a Depression to boot)."<<

Can anyone verify that any worldwide trade partner to the U.S. has any concern that 'the U.S. will retaliate' ???

It always seems to me (not based on anything tangible, mind you) that everyone else is snickering up their sleeve at us....

[Teh Ricer Civic!]

Can anyone verify that any worldwide trade partner to the U.S. has any concern that 'the U.S. will retaliate' ???

It always seems to me (not based on anything tangible, mind you) that everyone else is snickering up their sleeve at us....

Well if tomorrow France/Japan/Germany decided to impose a 50% tariff on any non-french/japanese/german made car, i do believe the US would retaliate.

[CaddyXLR-V]

Well if tomorrow France/Japan/Germany decided to impose a 50% tariff on any non-french/japanese/german made car, i do believe the US would retaliate.

I agree. And if we have been in a trade war for decades, how has it harmed us? We are still the largest economy by far. Do we really want the rest of the world to be much poorer than us? Look at our southern border and the drug wars going on down there. Is that desirable?

[G. David Felt]

Interesting theory, but would never work as all other counteries would retaliate in same and you end up with protectionism that will lead to world wide economic decline.

Better to keep free trade and force the American companies to start thinking long term with quality products and then you gain market growth.

[CaddyXLR-V]

Interesting theory, but would never work as all other counteries would retaliate in same and you end up with protectionism that will lead to world wide economic decline.

Better to keep free trade and force the American companies to start thinking long term with quality products and then you gain market growth.

The bottom line is that American companies need to innovate, and find a way to make it work in the system they play in, not try to change the system.

[Drew Dowdell]

I agree. And if we have been in a trade war for decades, how has it harmed us? We are still the largest consumer of foreign made goods by far. Do we really want the rest of the world to be much poorer than us? Look at our southern border and the drug wars going on down there. Is that desirable?

Fixed that up there for ya....

It has harmed us because we have been unable to export our goods at the same rate that other countries do.

Now I don't expect Japan to have as big a market as the U.S., but GM should be able to have more than a .5% market share there. GM didn't even bother because of the draconian import laws the Japanese have that are disguised as safety inspections.

China is another great example. They limit the amount of imports they'll accept. You wonder why GM builds things in China? It's not just the cheap labor.... it has to be built there to sell there in any great number.

We became the powerful nation we are because of our ability to build ANYTHING. We've sold that power in order to have low low prices at Big Box Mart.

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[Drew Dowdell]

Interesting theory, but would never work as all other counteries would retaliate in same and you end up with protectionism that will lead to world wide economic decline.

Better to keep free trade and force the American companies to start thinking long term with quality products and then you gain market growth.

Keep free trade? What is your definition of free trade? Trade hasn't been free for a long time. Oh sure Japan, Korea, and China can dump product here all they want with relatively minimal regulation or taxation. Watch what happens when the US tries to export to those countries.

If the U.S. imposed the same restrictions Asian imports that the Asians have on U.S. imports, Japan, China, and Korea would declare war.

[Teh Ricer Civic!]

Now I don't expect Japan to have as big a market as the U.S., but GM should be able to have more than a .5% market share there. GM didn't even bother because of the draconian import laws the Japanese have that are disguised as safety inspections.

And you don't think our EPA/CAFE/Safety laws are any different?? Please!

[CaddyXLR-V]

Fixed that up there for ya....

It has harmed us because we have been unable to export our goods at the same rate that other countries do.

Now I don't expect Japan to have as big a market as the U.S., but GM should be able to have more than a .5% market share there. GM didn't even bother because of the draconian import laws the Japanese have that are disguised as safety inspections.

China is another great example. They limit the amount of imports they'll accept. You wonder why GM builds things in China? It's not just the cheap labor.... it has to be built there to sell there in any great number.

We became the powerful nation we are because of our ability to build ANYTHING. We've sold that power in order to have low low prices at Big Box Mart.

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Does GM make cube shaped mini vehicles that fit the Japanese market? Also, GM is at a competitive disadvantage because they pay for healthcare where most other countries that's paid by the govt. Your not proposing turning the US into Japan are you?

[FAPTurbo]

We should save the US Electronics industry first.

We have one of those?!

[Drew Dowdell]

And you don't think our EPA/CAFE/Safety laws are any different?? Please!

Those laws apply equally to both Toyota and General Motors.

Cars manufactured in Japan, by Toyota, for Japanese consumption do not have to go through the inspection process (and associated fees) that cars manufactured in the US, by General Motors, for Japanese consumption do.

Japan has the second largest automotive market in the world. You think GM is selling in Europe, China, and the Middle East but not Japan because they just didn't get around to it yet? You think that Opel and GMDAT couldn't have scrounged up enough Aveos, Agilas, Corsas, Astras, Merivas, Vivaros, and Zafiras to at least make a go at it? Please!!

[Drew Dowdell]

Does GM make cube shaped mini vehicles that fit the Japanese market? Also, GM is at a competitive disadvantage because they pay for healthcare where most other countries that's paid by the govt. Your not proposing turning the US into Japan are you?

Aveo, Agila, Corsa, Astra, Meriva, Vivaro, and Zafira

Hyperbole aside, the government healthcare amounts to a huge subsidy for these foreign companies.

Airbus is a wonderful example of this. They receive huge subsidies from the EU membership not just in healthcare, but in grants, low interest loans, etc. just to compete with Boeing.

For now, Boeing is still the leader, but how long can they compete like that?

And more to the greater argument, how is this situation anything resembling free trade?

My point is, we haven't had free trade for a very very long time.

[redtruck]

Ugghhhh that would only serve to increase prices on ALL automobiles. The Domestics would realize that they can raise prices simply because the imports now have to charge higher prices as well. PLUS, it would severely reduce the Domestics incentive to substantially improve their products, after all they can simply now focus on cost cutting and if sales begin to sag, they can simply lower prices, its not like the Foreign cars will be able to do the same. The tax credits would only reinforce this position.

As for the tax breaks, you can expect governments of Germany, France, and Japan to retaliate severely, which would send us into a depression era trade war (and probably a Depression to boot).

Yeah, i'd rather not have either of those two.

I would have to search and find a link but I recall reading that US auto companies pay high tariffs to bring cars into other countries yet the US doesn't do the same to cars coming to the US.

The tax breaks I am referring to are the ones for the hybrids. Since the US auto companies were slow to the hybrid scene the tax breaks benefited the companies like Toyota and hurt the Big 3.

With the current financial status of GM, Chrysler and Ford they need to concentrate on making quality vehicles at a fair price. I also would not want them to get greedy and abuse us all with higher prices. I always buy domestic pickups for myself.

[balthazar]

>>"My point is, we haven't had free trade for a very very long time."<<

Agreed. Over the years, I too have read snippets of the amazing requirements to enter -say- the japanese market with U.S. goods. I recall one safety test of imported rowboats- fill them to the brim with rock & see if they still float. Japanese-company boats subjected to the same test ?? Of course not. This is called a 'safety test', but it's only a protectionism law for a closed market. Yet most armchair critics - oblivious to the type of hoops importers have to jump thru - assume merely than the product is inferior. It's bullsh!t, and it's certainly not "free trade".

[Jazzhead]

My own pipe dream to revive our industrial base is to bring back tariffs. But not tariffs like back in the thirties, based on politics and aimed at disfavored countries. Rather, tariffs that are objectively determined based solely on a country's wage/benefit levels as compared to our own. Autoworkers making twenty bucks an hour can't compete with foreign workers making two bucks an hour. So use a formula-driven tariff to raise the labor cost of imported manufactured goods to, say, 75% of American wage/benefit levels. That still leaves margin to keep U.S. manufacturers from growing fat and lazy. But we (meaning our hard-working middle class) shouldn't have to face unfair competition from low-wage countries. Until those countries raise their wage/benefit levels to within 75% of our own, tax the difference.

And use the tariffs, perhaps, to shoulder the legacy costs of American companies for things like retiree medical benefits that are only a pipe dream for workers just starting out. The so-called "world economy" has yielded benefits for some, but it has devasted the middle class in this country that works with its hands. It's time to bring back an old idea with a new twist - apolitical tariffs.

Edited April 16, 2009 by Jazzhead

[Robert Hall]

We have one of those?!

Semiconductor manufacturing? I think we still have some of that with Intel and other companies...