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To: VRWCmember

Are you assuming that the foreign plant assembles with imported parts, or sources its parts domestically?


90 posted on 11/13/2008 6:43:00 AM PST by 1rudeboy
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To: 1rudeboy

I’m not assuming either, and it isn’t germane to the reasons for operating abroad. The reality is usually a combination of both. A “japanese” vehicle assembled in a US factory probably has anywhere from 20% to 40% domestic US content and the remainder is “imported” content. So for the Japanese parent company there is currency exchange activity related to the timing of the transfer of the imported content, and there is currency exchange activity related to the flow of funds from the American affiliate back to the parent company and there is currency exchange activity related to the translation of the financial statements (income statement, balance sheet, etc) from dollars back to yen for the consolidated financial statements of the parent company.


91 posted on 11/13/2008 6:49:20 AM PST by VRWCmember
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