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Foreign Car Makers Concerned U.S. Government supports American Carmakers

Mike Biras

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The United States has been in an economic downturn which has affected all Americans. We have all held our breath watching the ups and downs in this negative economic climate while the American car makers and the U.S. government have gone through a difficult "economic tussle" for several months to make our domestic automobile industry economically viable for the country.

The American car industry is important to the country! It is not only the $60 Trillion equation building Main Street according to Detroit News, but it is the premier National Defense Industry for the county.

Now the foreign car makers have the nerve to complain about the relationship of the car makers and the U.S. government. Why shouldn't the government help Detroit and the car industry?

The Wall Street Journal recently ran an article "Foreign Car Makers Fear a Detroit Bias in Washington". The article stated, "Foreign based car makers are growing increasingly leery of the U.S. government's bailout of General Motors Co. and Chrysler Group LLC as Washington pushes moves that seem aimed at boosting Detroit car makers". The foreign car maker’s general complaint is "For years, the U.S. complained that other countries boosted their domestic auto industries through subsidies and special favors: Now the tables have turned."

The article quoted the President of Volkswagen that "It is a threat of the potential conflict of interest posed by the government's ownership stakes. He said his company plans "to watch carefully” whether that "leads to discrimination against manufacturers who aren't getting support from the taxpayers."

Japan's Toyota Motor Co. spokesman, Cindy Knight, was quoted that "The House provision restricting fleet-vehicle purchases by certain federal agencies to the three Detroit makers raised a red flag. It's unprecedented."

Contrary to what the Chairman claimed, the tables have not turned with subsidies. This is an economic emergency with the government helping to save the American auto industry. Now the companies are on their own and have to pay back the government for the loan or help.

The foreign car makers complaining have not only government ownership in some form but they are also subsidized by the American taxpayer through tax abatements. Nissan, Toyota Motor Co and Honda all received weakened yen checks from the Japanese government as well as tax abatements from the American people to help them run their plants.

Nissan has a tax exemption which runs 25 to 30 years and they also included their suppliers in this generosity. So we are subsidizing many foreign companies around the foreign car makers against American companies not in business with the foreign carmaker.

The Japanese auto industry relies on the United States for a profitable market for them. In fact, the Japanese industry according Koji Endo, an analyst at Credit Suisse, who explained how dependent the Japanese companies are on American for the success of their companies. Endo said, Toyota earns about 60 percent of its operating profit, or sales minus expenses and the cost of goods sold in North America , Honda gets about 70 percent and Nissan 74 percent). (Approximately 2/3rds is from the U.S.)

The American market has been essential for the profitability of Japanese auto industry for a long time.

Every time one of the foreign car maker companies move to the state to build a plant they receive tax abatements from the American tax payers. Nissan not only has abatements to build a plant, but tax abatements which run from 25 to 30 years. This can vary with companies but the abatements are very generous, but they must comply with the laws.

To receive these abatements the companies are required to sign an Agreement with the States that says: The Memorandum Of Understanding (MOU) between the State of ( ) and (the company) to be in compliance with laws and ordinances. It stated, "this is required under federal law that a tenant, at its expense, will comply with all material, federal, state, county and city laws, ordinances and regulations of any duly constituted authority affecting this site. This covers all laws as well as environmental and hazardous laws of the U.S. and the State.

Now we have a foreign car maker, Toyota Motor Corp, complaining about the government bailout of GM and Chrysler because Toyota wants a share of the American market. Perhaps we should consider Toyota is being sued for rollovers of their vehicles which has involved deaths.

In addition, Toyota infringed on technology of Paice Corp of McLean and now Toyota has to pay them $4.3 million plus a fee for new cars. Nissan took TALF funds from the Federal Reserve and will work with Federal laboratories to complete the work on a hybrid car. The Japanese government paid for 100% of the development of the battery and hybrid system that went into the Toyota Prius., according to Jim Press, former Chairman of Toyota.

We must not forget that Nissan Motor Corp retitled over 50 cars in a fleet, rolled back the odometers, and put them back in commerce in 16 states, so committed interstate fraud, SEC fraud, bank fraud, wire fraud, mail fraud as a beginning in a long list of frauds. The company attorney said on letterhead that this is standard. He was referring to rolling back the odometers and retitling the cars. There is much more on this issue so watch for details.

It is time the foreign car makers learn that they are in the United States at the generosity of the American people and the government. We Americans cannot and must not forget the American automobile industry which saved the country in WWII. The executives of the auto industry with their knowledge, intelligence, and foresight spent many sleepless nights turning out guns, ammunition, planes, bombs and vehicles for the war effort. The American people and the military will not forget the industry.

Americans will remember, this is the American automobile industry we support. Any slights and threats from the foreign car makers will help us to remember what the American industry did for the United States in World War II. We will remember the foreign companies who in effect "thumb their nose" at obeying American laws and cheating American investors. Those companies should step lightly. Americans are in no mood not to support everything American!!

mbiras64862@mypacks.net