This philosophy originated with Saburo Okita and his team who crafted the economy for post-war Japan.  Okita began pushing this philosophy as he made a 5 month round the world trip to 23 countries in 1956.  They pushed this philosophy in every international meeting that he and his team attended over the years.  The purpose behind it was to build a developing world where Japan could access countries for food and supplies.  They did not want to rely on the U.S. because of a scare due to weather in the U.S. and a shortage of oil during the seventies.

This philosophy showed up again in the 2005 Report on the U.S.-Japan Economic Partnership for Growth:  U.S.-Japan Initiative.  It stated, "in light of the increasingly globalized nature of U.S. and Japanese corporate activities, the "nationality" of companies is losing its significance and cross-border activities are contributing to the development and stabilization of the world economy as a whole as well as to the strong ties between the two countries."

It continued, "The interdependence between the U.S. and Japan can easily be grasped when we look at the automobile industry, once the focus of U.S.-Japan trade friction.  In the increasingly borderless international economy Japanese automobile manufacturers have expanded production overseas, particularly in the United States.  As a result, 67 per cent of the automobiles sold by Japanese manufacturers in the United States are now produced in North America.  Similarly, foreign companies, including U.S. firms, have acquired six of the eight main Japanese automobile manufacturers.  Such operational partnerships in the automobile sector are spreading to other industries; bringing benefits in terms of improved business management and technological development."

This is a "fancy way" of drawing your eyes to something else while the Japanese car companies attack the U.S. auto industry.  An old speech from 1992 in the files tells the story for us.  It referred to the American government attacking the American automobile industry with a bad ruling that could lead to the demise of the industry in America.

The International Trade Commission (ITC) ruled that the American auto industry had not suffered significant harm from Japanese mini-vans which were shipped in as cars instead of vans and, by their ruling effectively stopped the Commerce Department from imposing additional tariffs on the foreign vans.

This decision is called a "landmark" decision in American trade policy.  It is possible this "landmark" decision for the auto industry could be like the Treasury decision on Zenith television which ultimately wiped out our television industry.  In eight years the United States went from 28 to six American-owned manufacturers in business.

The demise of the industry was helped along by a series of rulings from the American government unfavorable to our industry but favoring the Japanese including a secret side letter with the Japanese that limited the International Trade Commission (ITC) investigations of "predatory" pricing.

The American government's actions in both the television and automobile industry did not favor the American industry, but the Japanese.

The Washington Times at that time reported that Thomas Hanna, president and Chief Executive Officer of the Motor Vehicle Manufacturer's Association of the United States stated, "they've been told by this agency that you can dump in this market and get away with it.  Essentially we've been told by the U.S. government to drop dead" he said.

At that time, according to the Washington Times a joint U.S.-Canadian panel said, "the North American auto industry faces possible extinction in the coming decades unless the government and manufacturers take measures to improve its competitiveness with Japan.

The panel suggested the U.S. government take immediate steps to cut the $42 billion trade deficit with Japan of which 75 percent is auto related.  The Report pointed out that U.S. risks losing 100,000 jobs within five years if we do not move quickly to help the industry.

The Vice Chairman of the panel, Mr. Joseph Gorman, Chairman and Chief Executive Officer of TRW said, "The Japanese fundamentally have a different system of trade and competition, which is historically based on protectionism".  Gorman also issued a warning, "the decline of the industry parallels the decline, the erosion of the North American industrial base".

Mr. Gorman was right.  At that time the automobile industry was an industrial giant for the United States.  Other industries supply vehicle manufacturing with everything from rubber to steel that goes into a car or truck, including 40 percent of all the machine tools, 25 percent of all the glass and 20 percent of all the semiconductors sold in America.  The auto industry accounted for 4.5 percent of all the goods and services sold in the country.

One out of every seven jobs is tied to the motor vehicle industry, and more than 1.4 million Americans worked in 4,400 plants and facilities in 49 states.  The people who worked in the industry pay one of every eight federal state and local tax dollars.

It was during this time that the Japanese were dumping machine tools and dumped 5.5 million tons of steel in the U.S. to affect our steel industry.  They were also working to control the U.S. polymer industry.  All of these actions affected the U.S. car industry as well as they were and still are attacking the U.S. patent system.

The question is, if Mr. Gorman's warning is correct, and the U.S.-Canadian panel is right, and the auto industry could be extinct then what happens to the people employed in the industry--and what happens to other industries supplying the auto industry?

Just a few years ago the Big Three dominated our car and truck market.  Today foreign auto companies control more than 1/3rd of the U.S. market (that was in 1992).  Recent information from the Chrysler Corporation states that "if foreign penetration continues at the same pace as the last 20 years, there will be no domestic auto industry in this country by the year 2010.  That is the same thing Mr. Gorman and the joint U.S.-Canadian panel said.

What the International Trade Commission (ITC) ignored is the fact that the Japanese auto manufacturers have lost $11.5 billion in the U.S. in the last few years in an attempt to buy the American market share.  Japan, Inc. has targeted our automobile industry since the 1930's and we Americans were only too kind to teach the Japanese the automobile business.

What is important to remember is the U.S. has one quarter billion registered vehicles (cars and trucks) and we must have a system of keeping track of them, as well as they are a mighty force in creating our economy and our job base.  We lose this industry and we lose control of the country.  The businesses which are foreign will dictate much of what we do and control our government.

How did we get to this point?  The most recent event was with GMAC which Cerberus bought from GM in 2006 and had a 51 percent interest in the company.  Cerberus includes a Japanese Bank, Aozoro which former Vice President represents Cerberus on the Board and also includes former Secretary of the Treasury, John Snowe as CEO of Cerberus.  GMAC financed 75 percent of GM's dealerships (6,420) worldwide. 

Though Cerberus had agreed to sell GMAC back to GM within three years the Chairman of Cerberus, Steve Feinberg, founder of Cerberus,  ran the leasing costs up so high that people could not lease cars and by 2008 GM was forced into bankruptcy.  The article reporting the story said "they took away a big chunk of GM's business.   This was reported in 2008 and it was just this week the Financial Times reported that GM was back in the leasing business as of last September.  "Almost 10 percent of its U.S. sales volumes are now financed by leases including more than a quarter of Cadillac sales.

With the Cerberus actions Toyota then became the Number One car dealer in the world and Nissan claimed to be Number Two. 

(That after Nissan ignored our title and odometer laws and put cars back into commerce which were illegally titled with false odometer readings.  Their lawyer said on letterhead last year that it was common practice at the time.)  Is this one way the U.S. has lost market share is with dumping and illegally titling cars.  We should have a hearing on this before Congress.    

Another way of weakening the American industry is best illustrated by Nissan's Canton plant in Mississippi.  That plant was set up at American taxpayer's expense and the contract spelled out exemptions for Nissan, including paying only 1/3rd of the ad valorem taxes due the schools.  Nissan even gets a 4 percent take of all the taxes paid by the workers in the plant to the State.  What was stated earlier in this piece is the auto workers pay one out of every eight dollar Federal, State and local dollars.  So if Nissan can take a 4 percent cut directly for the company after paying administrative costs then they are directly weakening our forms of government.

The Japanese government also provides a "weakened" yen check to Nissan, Toyota and Honda.  Nissan must make 74 percent of its worldwide profits from the U.S., Toyota 60 percent and Honda 70 percent.  With that need the company cuts the taxes on equipment and every function possible to increase their take from the American taxpayers and the government. Some Things Never Change

At the same time Nissan was the first in line for the TALF funding from the Federal Reserve and for the Clean Fuel funding from the Department of Energy and then it ran to our Federal labs for help in developing their environmental car.  So once again, the U.S. taxpayers are financing the foreign companies against the best interests of the country.  Remember, the powers of the industries are directly tied to the government.  The Japanese government does not allow this type of access in Japan because they have an agenda, a philosophy of government and intend to maintain it.

General Motors, Chrysler, and Ford were our National Defense Industry to help the military and provide security for the U.S.  That also included the heavy construction industry which put in the airbases for the Federal government out of their own pocket in WWII because the Government did not have the money to pay for them.

Given the economic conditions which have recently occurred and may occur again, we should maintain our National Defense Industry.  Our future and freedom could depend on it.  Our form of government and freedoms are not just "business as usual".  They are our freedom and the American auto industry with the Americans who have run them have proven themselves to the American people.  It is time for us to tighten up the laws and restore the American companies.  It is our country at stake.

Mike Biras

mbiras64862@mypacks.com

May 1,2010