If American car companies go under, will prices of Nissan and Toyota go up?

[kentuck]

If they have a monopoly on the American market, will they be inclined to raise their prices? Also, since they pay about $14-15 per hour, most of the profits would go back to Japan, would they not?

Is that not something the American consumer should think about before they throw GM and Ford under the bus? Just how much of a drain would this be on the American economy, if we could only buy foreign made cars?

How much would this increase our trade deficit? Can we really afford to let this happen??

[ingac70]

1. Perhaps,

since they use the same suppliers as the Big Three, and a good hunk of those suppliers will go under.

[madmom]

2. As I said before.. foreign cars are "walmarting" the big 3! They are doing to

the big 3 the exact same thing people on this board are bitching about walmart doing to mom&pop shops. EXACTLY!

[Sub Atomic]

5. How do you figure?

The foreign automakers are providing an alternative to shitty American cars. (Yes, I drive one)

They're not undercutting prices to drive other businesses out as Walmart does. They offer a superior product to what GM/Ford/Chrysler are producing. The Big 3 are having problems because they were too myopic about the huge profits they were making on giant SUVs instead of paying attention to the market and what people are buying.


Far from what Walmart has done to this country, but do keep peddling that particular line of bullshit. It makes your argument so much more believable.

:eyes:

[madmom]

12. "They are not undercutting prices" yeah right, the superior product foreign car that I

had the privilege to drive was totaled by a motorcycle and put my infant daughter in the hospital.The motorcycle was NOT totaled. If they are not what people want why is it that's all you see on the roads?People aren't buying because nobody has any money, sales have dropped for foreign cars as well .Foreign cars are designed for the short miles they drive over there,most of our states are bigger than their countries and we drive much longer distances. Cheaper is not always better.

[Sub Atomic]

21. Sorry about your accident but

who are you to say that the same wouldn't have happened if you were driving a Chevy?

Foreign cars are designed for short miles?

Do you have any facts or links to back up that ludicrous claim or are you just taking out your a55?

[madmom]

32. Call me naive, but when a car is hit head on by a motorcycle and the car looses, I think there is

something defiantly wrong with the design of the car! It was cheap uni-body construction and the entire frame was bent sideways.

[Bake]

74. Damn! What kind of bike was it?

Bake

[madmom]

76. 1100 Yamaha

[michreject]

33. But he wasn't driving a Chevy

So your comparison is shit.

Asian car makers are dumping their products.

American need to put the same tariff on Asian auto that match the tariff that Japan puts on American autos.

[SmileyRose]

14. It's EXACTLY the same

Walmart took over America by pushing the fact is was opening textile factories in North Carolina and delivering the best quality products at a better price than the mom and pops could offer. The big thing at Walmart was high quality mostly union made American goods. People felt good about shopping at Walmart and saving some money too. In those days Walmart workers made half decent wages.

The minute the competition was out of the way Walmart shifted it's suppliers off shore and started union busting as often as possible.

As far as shitty cars go - Ford and GM both outsell ToyotaisGod in the United States.

[Sub Atomic]

15. Gee, the last time I priced a Toyota is was several thousand dollars more than a comparable Saturn.

But you go on thinking that Toyota is the same as Walmart and they're cutting their prices to undercut American cars.

And I'll keep rolling my eyes at idiots like you.

:eyes:

[SmileyRose]

29. Toyota would not have ever gotten a foothold here without undercutting

it already happened...............

they got their foothold by opening US plants and selling for cheaper than American. They could do that because the plants here paid substantially less and their costs per worker worldwide were so much less thanks to socialized systems elsewhere.

I may or may not be an idiot - but if I am - I'm one who's been around the block a couple of times and not someone who thinks Toyota arrived yesterday.

[michreject]

34. Some people hate American products so much

that they wouldn't buy an American auto even if it had the highest quality rating available.

[SmileyRose]

39. I don't know about that.

I want to believe it's lack of experience, not hate.

[michreject]

41. I'd like to believe that

But I think I'm too cynical.

[Sub Atomic]

66. I take that as a back-hand slap to me.

I drive a Saturn. It's a good car, on par with the Corolla that was the last car I had, and it was a lease.

[michreject]

70. How so?

You drive an American made car. Thanks for doing so.

[ingac70]

36. It costs...

60k to buy a Ford Mustang in Japan.

We should put the same tariff on every part, every vehicle. Fair trade, not free trade.


http://www.usatoday.com/money/autos/2008-11-24-ford-volvo-car-safety_N.htm

The ARE Wal-Marting us.

[madmom]

40. Exactly why can't we level the playing field the foreign car companies put so

many obstacles in the way of American companies it's ridiculous.Here's just one:

http://seekingalpha.com/article/26324-how-much-of-toyota-s-success-comes-from-the-weak-yen

[SmileyRose]

44. not to mention Japan playing with the yen to give their companies help

[ingac70]

45. If you are ever in the market for a new car...

I can arrange for you to get a "friends" discount through Ford.

[tridim]

8. Walmart products are made in China

Japanese cars are (mostly) made in America.

[madmom]

18. Well the profits still go to a foreign country. They are in right to work states

they are GIVEN land and many incentives to build there.They are non union, have inferior wages and benefits and are essentially only assembly plants. Contents are mostly made in foreign countries bringing them here to put together in highly automated plants and calling it an American made car. They are not called "the right to work for less" states for nothing.

[dipsydoodle]

28. Profits still go to a foreign country

just the same as profits of the USA's multinationals operating outside of the USA got back to the USA. You can't have it both ways so just deal with it.

[madmom]

46. American car manufactures build factories over there, they do not send sub assembled

parts and put them together over there, like the foreign manufacturers do here, and we do not have the high tariffs on theirs as they do on ours! So I think this might be something that you have to learn to deal with!

[JVS]

19. Yeah, GM and Ford are just other names for mom and pop.

:crazy:

[madmom]

20. A lot of mom and pops work there and they are AMERICAN!

[JVS]

23. A lot of moms and pops work at all the companies, and believe it or not some moms and pops are ...

even, brace yourself it might be hard to believe, Chinese.

[madmom]

27. Well aren't you cute! You're argument looses all credibility because the

same thing can be said of the workers for walmart.Or does it make it difference if they are Japanese or Chinese?

[JVS]

31. The person who compares GM and Ford to mom and pop is telling me about credibility

:rofl:

[madmom]

47. Comparing a foreign car companies business practices with that of Walmart is

comparing GM and Ford to mom & pop shops how?

[hendo]

59. you specifically referred to them as moms and pops.

your credibility went out the window as soon as you compared foreign auto companies to Wal-mart. The big three are in the problem they are in because they are making sh*tty products with bad fuel efficiency. They are clinging to the large auto market even in the face of people buying smaller vehicles.

They repeatedly made bad business decisions and now they want to be bailed out because of it. If they really want to make money, they need to make what the customers want.

[madmom]

62. I refer you to post #49, she said it much better than I could. Just

because YOU think a product is shitty doesn't mean it is. If people want the foreign cars so much more why then has Toyota sales declined 34% in Nov. and Ford only 31%. Seems to me everyone's sales are off and because unlike their foreign competitors American companies can't get credit because our economy is in the shitter.The foreign countries are propping up their companies while ours is being left to the whims of unscrupulous business deals on wall street. Why do you think the big 3 have always had "shut-down" this time of year, because no one buys cars in the winter, this is always a slow time for them and the financial debacle made it worse!

My crediblity is in tact but I'm skeptical of yours!

[hendo]

73. Because

as gas prices are going down, Americans are forgetting that high fuel efficiency is important. Americans have such horrible short term memory. We are a nation of amnesiacs.

[madmom]

75. Oh never mind , I will not lower myself to say what I was going to, go

buy your foreign car and when you and yours are without a job because of all of the unscrupulous business deals driving our economy into third world status you can take pride in knowing you helped! Just like walmart!

[hendo]

77. Toyota and Honda

ARE NOT WAL-MART!

And my job is in no way tied to the American Auto Industry, and the stupid decisions that they have made in terms of which automobiles to manufacture.

Do I want anyone to lose their jobs? No, of course not. Maybe you should do some research on the Big 3 though and find out how many of their autos are made outside of the US.

I really hope that in all of your self-righteous tirades you do not buy any toys, or electronics. Wait, you are on a computer, aren't you? and you are using the internet? Most toys are made outside of this country. Every component in your computer was fabricated over seas. And the internet? Likely every single router and server and hub that you are using to access this website was fabricated through Cisco Systems, a company that does not actually manufacture anything in the US. Or maybe by IBM, another company that outsources all labor. I hope you enjoy supporting foreign workers, because you do it every day that you use your computer.

[madmom]

78. Yeah but you know what? I'm NOT one of the self-righteous

bastards on this board who scream and yell about walmart and then say I'll buy a foreign car because they have what I want and can afford., because that's why people shop at Walmart..because they have what they want and can afford THAT"S the point I'm trying to make and yes I do shop at Walmart and will continue to do so and I do buy domestic cars why? because I'm NOT a hypocrite! So you're barking up the wrong tree there bucko. Whether you thing your job is related to auto industry or not if that many people are put out of work it WILL affect you and everyone else in this country.Oh and by the way I didn't say honda and toyoda were walmart but they DO have the same business practices so maybe you should go catch up on some history! I'm done with you, you're beyond help!

[spoony]

80. Please don't turn this into some sinophobe crap

You know it isn't about that.

[lapfog_1]

3. Not right away...

If the big 3 go out of business, it throws another 3 million to as many as 10 million wage earners on the unemployment lines. Things like that tend to depress demand for new cars, any new cars.

If we ever get back on our feet, then yeah, monopolies tend to increase prices. But there has to be some demand first.

[Donnachaidh]

9. "monopolies tend to increase prices"

And the big three WERE a monopoly until the foreign cars hit the market.

My grandparents and others could NOT afford a new american-made car. It wasn't until their was an alternative with the cheaper foreign made cars that they could buy new.

It's amazing the twisting and turning of arguments made over companies that have been their OWN worst enemy economically. :eyes:

[brentspeak]

25. ???

Lower-priced foreign-made cars didn't materialize in the United States until the early 1970's. Before then, even Japanese cars were more expensive than American autos. Further, there was a boom in personal car ownership within the U.S. beginning back in the 1950's. Finally, domestic cars have been less expensive - by far - than practically every foreign model (other than the Yugos or the new Korean cars) starting in the mid-1980's.

So, unless you're saying that it wasn't until the 1970's that your grandparents weren't able to afford a new car, and that they were less-well-off than many teenagers who lived in the 1950's, your history is a bit-off.

[JVS]

30. I'm pretty sure that the VW beetle was one of the cheapest cars to be found in the late 1950's

The big wave of Japanese cars came later, but there was some import pressure on the economy car section.

[kentuck]

42. But few people wanted a VW beetle....

They looked like something out of a Crackerjack box. But, at those times, gas was cheap and cars were beautifully made, for the most part.

[lithiumbomb]

56. are you kidding?

They sold 21 million of the things worldwide, a few million of those in the united states.

[kentuck]

61. I only saw one...

From 1950 until 1958 ?? Maybe they just weren't popular in my part of the country? :-)

[Historic NY]

57. Them lower price foreign jobs fell apart quicker than cardboard..

Fiats, Datsuns, etc. they mostly were cheap throw-a-ways. Oh they did undercut the American car industry especially the trucks that paid much less import duties. Service was dismal and parts were few.

[kentuck]

63. Most folks would take a shortcut over the old rocky road...

just so they could buy one of them new foreign cars, and drive them back on the highway. They always babied them because they were always afraid they couldn't stand up to the same beating their old Ford would take. And by taking care of them, they would run forever. :-)

[KoKo]

4. We had to trade in our ten year old Mini-Van.. Toyota gave better price than Chrysler.

Chrysler dealer said they'd give us a "Lifetime Warrenty" and that Toyota couldn't offer that to us. Hubby and I had hard time not going ballistic at the salesman wondering why he didn't know that Chrysler was up on the Hill begging for money so they wouldn't be bankrupt and that Cerebus (VC who owns Chrysler) is looking for a buyer for Chrysler.

Yeah...I'd buy a Chrysler with a "Lifetime Guarantee." Sure........

We got a better deal on the Toyota. We didn't do the Prius. This is our "haul van" and we don't know what's going to happen with Prius and they are very expensive even for the Highlander. We are attached to MiniVans..

Toyota is offering "ZERO % FINANCING" for first year...

[mudesi]

6. Short answer: Yes

Dramatic drop in supply equals raise in price.

[doc03]

7. Why wouldn't they? Another thing

if the Big 3 go bankrupt the first thing that goes is the Union contract. If you don't have a UAW the Japanese will be free to lower their workers wages and benefits since they don't have to pay competitive wages any more. That will trickle down to every job in this country, every Unionized industry in the country will then demand concessions from their workers. If you all don't work in a Union shop it will affect you too don't think it won't. When Chrysler got their bailout back in the 70s they demanded concessions from the Union and those concessions trickled down to every Union job in the nation. I work in the steel industry and it wasn't more than a few months after the UAW took concessions the steel industry wanted them too. Then once that SOB Reagan broke the air traffic controllers Union and the Big Unions failed to back them it has been a race to the bottom ever since.

[Greyhound]

37. Of course they will, you are 100% correct.

Well said.
:fistbump:

[moondust]

54. Exactly right.

:fistbump:

[Speck Tater]

10. Their inventories of unsold cars is stacking WAY up. They will need to cut prices to sell ANYTHING.

[JVS]

26. All car prices are going to need to be drastically cut if every company keeps generating more cars.

[wuushew]

11. There are dozens of makes and brands sold in the United States today

I can't see how competition would be less than when the Big Three dominated the domestic market prior to the 1970s.

[doc03]

13. It simply amazes me how many on DU are

against Unions when Unions have been the backbone of the party for a century. Where was all this anger when Paulson just gave hundreds of billions to the financial industry with no strings attached? The Auto industry is one of the last remnants of manufacturing left and they pay good wages and benefits. If the Auto industry goes there will be countless supporting industries that will suffer. The steel industry is now working at only 50% of capacity because of the slump in Autos every week another steel plant lays people off or shuts down.

[kentuck]

17. And they call themselves "Democrats"?

My ass!

[hendo]

60. anti-union no

but it is important to note that unions, or rather union representatives, are not always right.

[kentuck]

64. And they will usually admit when they are wrong...

Where do you think they are wrong?

[SammyWinstonJack]

71. !!!

:thumbsup: x3

[JVS]

16. possibly in the short term due to a shortage before they would ramp up production.

But to claim that the big 3 are the only thing preventing an oligopoly is very perverse logic. With or without the big 3 there is already an oligopoly.

[MazeRat7]

22. Yes and no... (Don't you just love a "comitted response) *LOL

In the unlikely event there were no more American auto manufactures (which I don't think will happen- at least not right away), yes I think the foreign companies would increase their "distributor" prices in order to increase margin which would translate to higher consumer prices.

They do have a big advantage by actually having plants in the US, avoids any loss from future tariffs, etc. Many US companies enjoy this same advantage.

Additionally, I would be willing to "guess" that they would open additional plants (possibly picking up ex-big3 workers) since the demand in the US is unlikely to decrease.

As to the point of their profits going directly back to Asia, that is a shell game. While I don't know anything about foreign business rules, I know for fact that global US companies engage in the game all the time to avoid paying taxes on their products that are ultimately sold in the US. Different slightly, but telling.

Peace,
MZr7

[ContinentalOp]

24. Who cares where the profits go? It's the jobs that matter.

You think the assholes in charge of the Big 3 are doing anything with their massive incomes to help America? Besides, aren't all of these companies public anyway?

[SmileyRose]

35. "public" is in the eye of the beholder - Link to who owns Toyota

http://www.toyota.co.jp/en/ir/stock/outline.html

A little further checking shows nearly all the shares held by the top 10 shareholders are actually being held in trust for 15 Japanese people - all related to the founder of Toyota.


Ford Motor Co's ownership is similar. Nearly 70% of Ford Stock is owned by relatives of Henry Ford.

[Greyhound]

38. Bingo! n/t

[ContinentalOp]

48. OK, so why do I care if my money is going to some rich japanese people or Ford's rich offspring? -nt

[SmileyRose]

49. You shouldn't

what you should care about is that auto workers until recently were making 4-6 times minimum wage and no one was complaining. Now that Toyota is getting people to work for 2 times minimum wage to do the same work........

The fact is the UAW was forced to sell out workers because the people who owned the few shares of Toyota stock available to the public were getting huge dividends while Ford's costs were cutting into huge dividends. People yanked money out of Ford and GM and took it where they could get huge quick money.

So go ahead, buy a car made with $14 an hour labor as opposed to $24 an hour labor. It worked for Walmart............

[madmom]

51. Thank you for making my point more eloquently than I could.

[kentuck]

53. And people shouldn't forget their history....not just recent history...

When you cut the average auto worker's wage from 28.00 per hour to 14.00 per hour, it can't but help affect the middle class. Since the days of Henry Ford, when he decided to pay his workers enough money to buy the same cars that they made, after housing and food, the autoworkers have been the building block for the middle-class in this country. Do we really want to lose that? Think about it.

[ContinentalOp]

67. So why not unionize American Toyota plants? -nt-

[SmileyRose]

68. Why not indeed.

It's not by accident they have been a major force behind right to work laws.............

[madmom]

79. Were it that simple.. yes it would be nice if they could.

[OhioChick]

43. Of course they will. (Price inflation)

The "haves" will still be able to afford vehicles, while the "have nots" will not.

[madmom]

50. In 1989 ...

a Yugo (a remade Fiat, who's subsidiaries are Ferrari and Maserati) blew off the Mackinaw Bridge in Michigan. Yeah this is exactly the kind of car I want to drive.

[DainBramaged]

52. The American consumer doesn't give a shit

They buy Toyota Camry because they THINK they get great gas millage until they figure out they get less than 20 MPG around town, and the 'scheduled' maintenance is more costly than the GM or Ford product they used to own. Oh, and when they see their insurance premium go up because the Camry is hot on the list for most stolen cars, they don't get that either.


Most of the people here on DU who beat GM and Ford to death can't afford a new car, yet their task in life is to degrade a product they could never own new anyway. And probably not used either. And probably don't even have a license yet. Or got their parent's beater passed down to them, and of course, their parents never did a shred of maintenance to the beater, so it's ALWAYS in the shop.


And GM makes crap. I'd like to see them turn down a brand new car from GM. THAT would be the ultimate 'more import correct than thou".

[OhioChick]

55. Well Said.

I've only owned Fords and GMs all of my life and have always been pleased. I've never purchased a foreign car, nor do I ever care to.

[EOTE]

72. My folks come to me when they need a new car.

In 1997, I had my dad pick up a then new '97 V6 Malibu. Prior to that, he had a Toyota Tercel which was a constant pain in the ass. Aside from some slight brake issues, it's been running solid for over 11 years and over 130k miles (and my dad is VERY tough on his vehicles). My mom needed something a bit more utilitarian, but didn't want the fuel economy associated with larger SUVs, so I had her pick up a Pontiac Aztek. We all agree the Aztek is a bit fugly, but the thing is built like a tank. She's averaged around 25mpg (with AWD), and aside from some dash lights going out, there hasn't been a thing wrong with it and it still runs just like new at over 100k miles. Both have been fantastic vehicles and I'm really glad my mom got the Aztek instead of a CR-V, she's hauled so much stuff with the Aztek that she simply wouldn't have been able to fit in the CR-V. And my mom wanted my dad to get an Accord instead of his Malibu. My dad wouldn't miss the slightly nicer interior that the Accord would have provided, but he sure does like having the many thousands he saved by getting a Malibu instead.

[lithiumbomb]

58. possibly

Toyota, Honda, and Nissan have fairly large US operations, with US employees, US production, and US suppliers. Their suppliers are often the same suppliers who supply the big three. In a worst case scenario with the big three going under, the suppliers go under as well, which will increase the cost of making cars in the united states and could very well shift production elsewhere.

[MasonJar]

65. I personally am convinced that the US automakers brought this on

themselves by refusing to build and market reasonably environmentally sound automobiles. They should have seen this coming, but either were too stupid to do so or too encouraged by the Bushistas and the GOPers to be stupid that they deserve to fold. However, if they will retool and build the cars which we need in the future, I think for the workers' sake the country should give them one more chance. One more is it!

[SmileyRose]

69. Er - GM builds more hybrid models than Toyota. ALSO

Ford and GM vehicles get better in class MPG than their Toyota or Honda counterparts - pretty much across the board. Considering this fact, how can you justify the claim Ford and GM didn't bother but supposedly Toyota did?

Toyota was first out of the gate, but they were left behind gas mileage wise quite a few years ago. Just compare in class mileage.........

[doc03]

81. Don't confuse the American labor haters with facts.

I have a 2006 Toyota Tacoma pickup, the reason I bought it was I needed the smaller pickup because the full size ones wouldn't fit in my garage. The Big 3 make excellent full size pickups but I just didn't care for the mid-size ones. When you compare the gas mileage on the pickups the Toyota doesn't do any better than the Big 3. I also have a 1999 Mercury Tracer it gets 30 MPG around home and 35-38 on the highway. The Big 3 all make small cars but they didn't sell until the gas prices recently went through the roof. There was a story in Sunday's paper about GM taking the 3rd shift off at their Lordstown plant, that's where they make the Cobalt. They had just added the 3rd shift a few months ago because people suddenly started wanting the Cobalt instead of the big SUVs because of gas prices. The American public was demanding bigger and bigger SUVs and pickups so that's what they built. One reason the Japanese have more smaller cars is they haven't really established themselves in the truck market. Truck buyers are very brand loyal and it took Toyota decades before they even broke into the mid-size market. Toyota and Nissan have just recently made full size trucks. So don't tell me the the Big 3 don't make what people want, they made big vehicles because that's what sold. When you get get right down to it I think most of these people are jealous because an auto worker has a Union and get paid well and have good benefits. I have seen 10 times more threads here opposing the Big 3 than I ever seen when they were giving 100s of billions to the banks. Bottom line I think they are opposed to it fot the same reason as the Republicans because of labor.

[SmileyRose]

82. It boggles my mind

I fail to understand how taking half their salary, all their medical benefits leaving UAW workers with no retirement makes like better for the DUers doing the bitching. Never in a gazzillion years would I dream "progressives" would be screaming for blue collar workers to suffer more.

[doc03]

83. The only explanation I can come up with

is many of these people are the "Latte Liberals" we hear about. They drive their Volvo's and BMW's and look down on us working Democrats that take a shower after work instead of before.