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Japan auto companies triple Mexican pay rather than move to US
Asian Nikkei Review ^ | 07/06/2020 | SHUJI NAKAYAMA and RYO ASAYAMA

Posted on 07/06/2020 9:33:00 PM PDT by SeekAndFind

The new North American free trade agreement that goes into effect Wednesday was touted by U.S. President Donald Trump as an engine of American job creation. But Japan's automakers are largely opting instead to keep operations in place and pay Mexican workers more or even just pay tariffs.

The US-Mexico-Canada Agreement requires 40% or more of parts for each passenger vehicle be manufactured by workers who are paid at least $16 per hour as a condition to make them tariff free in the region. Trump hailed that feature as a way to boost production in the U.S., which has a higher hourly rate than Mexico.

However, this looks to be wishful thinking. The ratio of US-Canada parts among Mexican-assembled vehicles sold in the U.S. was 13.5% in 2018, according to the U.S. Department of Transportation Highway Traffic Safety Administration. Trump's theory was that U.S. production would inevitably increase to meet the 40% requirement, but Japanese automakers, which had already positioned their production bases according to the old NAFTA regime, are not simply willing to pull up stakes and redeploy.

One reason is the cost of moving production. Honda Motor-affiliated parts maker Keihin will raise the hourly wage of employees at a factory in Mexico to $16 by next month -- triple the average rate of a parts factory in Mexico, but still cheaper than making a move. Because the pandemic has hurt earnings, the cost of the moving production will likely be too burdensome over the foreseeable future.

Auto component maker Piolax, will also raise the hourly wage at its Mexican plant to $16 within the year. The company is also installing robots to mitigate rising labor costs, President Yukihiko Shimazu said.

(Excerpt) Read more at asia.nikkei.com ...


TOPICS: Business/Economy; Canada; Foreign Affairs; Japan; Mexico; News/Current Events
KEYWORDS: autocompanies; automotive; canada; japan; mexico; nafta; trade; usmca
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To: Sequoyah101
Would you move your operation to the US right now if you were doing well somewhere else and could stay while paying a less than US living wage? I wouldn’t.

Additionally, I'd guess a lot of companies are holding off making any major decisions until after the election: taking a chance on Biden winning and rolling back all of President Trump's job-creating measures.

21 posted on 07/06/2020 10:56:19 PM PDT by Drew68
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To: Sequoyah101

And have to deal with endless OSHA and EPA regulations? Nope.


22 posted on 07/06/2020 11:33:22 PM PDT by Clay Moore (Mega prayers, Rush)
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To: SeekAndFind

This is the intent of USMCA, to increase wages within the trade block. It is good that wages are rising in Mexico. It cuts down on migration, crime, and Mexico has more money to buy American products. A roserous Mexico also helps absorb migration from Central America, which has been a bigger problem than Mexico lately.


23 posted on 07/07/2020 12:12:20 AM PDT by Vince Ferrer
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To: SeekAndFind

The “purchase parity” value of 16 USA Dollars in Mexico is 16 X 2.053.

In other words, having $16 USD in Mexico would be the same as having $32.85 USD in America.

Of course, the Mexican government will confiscate half of that in taxes, and the Mexican gangs will extort the other half.


24 posted on 07/07/2020 12:31:11 AM PDT by zeestephen
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To: SeekAndFind

Japanese are highly intelligent refined people. Smart move. Despite the best efforts of a superb, strong man, the country as a whole seems on a very bad trajectory. And if democrats win a sweep in Nov...it’s over and the experiment failed.


25 posted on 07/07/2020 1:40:28 AM PDT by Bonemaker (invictus maneo)
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To: Sequoyah101
Would you move your operation to the US right now if you were doing well somewhere else and could stay while paying a less than US living wage? I wouldn’t.

You're right, especially since the 1994 version of NAFTA will be reinstated should Biden win, *and* most Americans could care less where things are made. This isn't how I think but it's prevalent nevertheless.

26 posted on 07/07/2020 2:09:09 AM PDT by JonPreston
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To: Fai Mao

You’d be almost near correct if it weren’t for all those Mexicans of working age that are hooked on illegal hallucinogens.
Their extra money will not lift them out of poverty.
It will allow them to continue their downward slide.


27 posted on 07/07/2020 2:23:10 AM PDT by Cletus.D.Yokel (When we look to government to solve our problems, our "rights" become reduced to "privileges".)
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To: Bonemaker

Japanese business executives are always planning 10...or even 20...years out.Ours are planning 3 months out.


28 posted on 07/07/2020 3:14:05 AM PDT by Gay State Conservative (The Rats Just Can't Get Over The Fact That They Lost A Rigged Election!)
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To: Spktyr

More importantly, would you move your operation to the US if you had to pay the “diversity tax” (x% of employees, y% of managers, and z% of board members, need to belong to certain groups) - and you have to pay all of the bills for the nearest welfare hives?


29 posted on 07/07/2020 3:38:55 AM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: Dr. Sivana
I read down before posting a similar comment as yours.

If Mexicans are making more money, maybe they'll get more involved (because it WAS a direct result of President Trump's efforts) to figure out what's wrong with their own nation and fix it.

30 posted on 07/07/2020 3:40:09 AM PDT by knarf
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To: rlmorel

I agree.
Why would anyone post this garbage propaganda?

Another lefty troll?


31 posted on 07/07/2020 3:59:26 AM PDT by ZULU (Impeach John Roberts for corruption. SOROS IS "SPARTACUS" BOOKER'S LANISTA.)
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To: SeekAndFind

Maybe now Mexicans will get jobs in Mexico rather than sneaking across our border.


32 posted on 07/07/2020 4:10:24 AM PDT by ShadowAce (Linux - The Ultimate Windows Service Pack)
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To: SeekAndFind
The center also said U.S. car sales will drop by up to 1.3 million units annually due to the Trump administration’s trade policy — including sanctions on China. It estimates that 70,000 to 360,000 jobs will be lost, leading to a $6 billion to $30.4 billion reduction in gross domestic product.

Lies and propaganda. We need to raise the tariff.

33 posted on 07/07/2020 4:18:28 AM PDT by central_va (I won't be reconstructed and I do not give a damn...)
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To: Sequoyah101
I wouldn’t.

We know anti American globalist Free Traitors™ and what they are all about so this why we need very high protective tariffs.

34 posted on 07/07/2020 4:20:31 AM PDT by central_va (I won't be reconstructed and I do not give a damn...)
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To: Sparticus

The USA can and should be completely self sufficient in every single thing the USA consumes. EVERYTHING.


35 posted on 07/07/2020 4:22:07 AM PDT by central_va (I won't be reconstructed and I do not give a damn...)
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To: Fai Mao

I guess this thread proves that the globalist Free Traitor™ that call themselves “Conservative” will need to die off if the USA is to save herself and to restore economic viability to re industrialize. MORE TARIFFS!!!!


36 posted on 07/07/2020 4:26:05 AM PDT by central_va (I won't be reconstructed and I do not give a damn...)
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To: ShadowAce
Maybe now Mexicans will get jobs in Mexico rather than sneaking across our border.

Or maybe one day an unemployed US anarchist will kill one of your family members?

37 posted on 07/07/2020 4:27:35 AM PDT by central_va (I won't be reconstructed and I do not give a damn...)
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To: central_va

The leap of logic you must’ve taken to arrive at that scenario boggles the mind.


38 posted on 07/07/2020 4:45:20 AM PDT by ShadowAce (Linux - The Ultimate Windows Service Pack)
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To: WKUHilltopper; Olog-hai; ZULU

When I read the “summary” further up the thread, it had the stink of Leftism. I can’t put my finger on it exactly, and I am sympathetic to people combating the globalist BS, but this smelled more like union folks and such against Trump.

I guess it was the “Tariff” six letter word inserted in there so many times.

I tried to look at the board of directors for this (because that is often revealing) the trail went cold. I suppose one could drill down on each one of them and look at their affiliations...

I’d rather have a cold beer.


39 posted on 07/07/2020 5:07:51 AM PDT by rlmorel ("Truth is Treason in the Empire of Lies"- George Orwell)
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To: SeekAndFind

So with this emphasis, the job losses will be in Mexico?


40 posted on 07/07/2020 5:29:54 AM PDT by ConservativeMind (Trump: Befuddling Democrats, Republicans, and the Media for the benefit of the US and all mankind.)
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