Toyota’s success in U.S. irks some on Capitol Hill

The Columbus Dispatch ^ | Ken Thomas

[LdSentinal]

WASHINGTON — From a high-school auditorium near the birthplace of Elvis, Toyota was greeted like a hometown hero last week when it announced its eighth vehicle assembly plant in North America.

Students cheered as the automaker showed off a Highlander sport-utility vehicle that will be built starting in 2010 at the $1.3 billion plant near Tupelo, Miss. Gov. Haley Barbour called Toyota Motor Corp. the "world’s premiere auto manufacturer," and Sen. Trent Lott, the Senate’s No. 2 Republican, promised, "When you are in our constituency, we are warriors on your behalf."

Toyota’s choice of Mississippi for a new plant should give it more clout on Capitol Hill. With Michigan-based automakers facing hardships, a few more members of Congress on its side helps as Toyota takes on some lawmakers who openly question whether what’s good for Toyota and other Japanese automakers is good for America.

"They’re manipulating the yen and it creates big differences in what they can sell their automobiles for," said Sen. Debbie Stabenow, DMich., who represents thousands of Detroit-based autoworkers.

Stabenow and other lawmakers representing manufacturing states complain that the Japanese government has kept the yen artificially low, allowing their auto producers to undercut competitors and reap huge profits in the United States. They note that 46 percent of Toyota’s U.S. sales in 2006 came from vehicles imported from Japan, even as the company highlights its American work force and assembly plants in advertising.

Toyota could surpass General Motors Corp. as the world’s No. 1 automaker next year, but the company has downplayed the significance, saying it’s more concerned with its customers and maintaining quality.

In U.S. sales released Thursday, the company had its best February ever, posting sales increases of more than 12 percent.

Privately, Toyota officials acknowledge the potential pitfalls of growing rapidly in the U.S. during a period of job cuts and plant closings for GM, Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group.

Seiichi "Sean" Sudo, president of Toyota Engineering and Manufacturing in North America, warned in a recent presentation that the automaker could become "a scapegoat" as its Detroitbased competitors work through turnaround plans.

Toyota has opened a major advertising campaign, touting its job creation in America. Toyota has 10 plants in eight states and will start producing Camrys at a Subaru plant in Indiana this year. It also has a research-and-design center in Ann Arbor, Mich., it plans to expand.

The company has many allies in Congress, from members of the California delegation to Sen. Mitch McConnell, R-Ky., and Sen. Jay Rockefeller, D-W.Va., who helped bring an engine plant to his state.

But some members of Congress and advocacy groups question whether Toyota is unfairly benefiting at the expense of U.S. automakers, which face large health-care and retiree costs they say are exacerbated by Japan’s currency practices. The weak yen puts domestics at a price disadvantage of several thousand dollars per vehicle, they argue.

In a letter last month to Treasury Secretary Henry Paulson, four House Democrats said the weakened yen had allowed Japanese automakers to increase their exports to the United States by more than 30 percent in 2006.

The Bush administration has been cool to a protectionist approach. Paulson, in a speech Thursday, said erecting barriers would hurt the economy and lead to "lost jobs and lost opportunity."

Members of Congress who support domestic automakers concede that they face major hurdles. Rep. Mike Rogers, R-Mich., said that "you can’t swing a dead cat in the parking lot (on Capitol Hill) without hitting a Toyota or Honda or a Mitsubishi. I don’t believe it’s a political problem."

The Camry, after all, remains the nation’s top-selling passenger car. Rogers, who grew up in the rural outskirts of Detroit, said he remembered the days when "you did not consider buying a foreign car. Now, I think the attitude of America has changed."

[raj bhatia]

Thats the point most of these protectionists flat earth types hide. Toyota's cars in every category are priced higher than the big three. Yet Toyota outsells them. Put another way, if the big three can charge the same price that Toyota does, none would be running at a loss. The question then is, why can't they do it? The answers are obvious and bring home the uncomfortable truths.

[Fan of Fiat]

Hyundai;

Another car company that can build a quality, competitive car in the U.S.

[Beagle8U]

Michigan is doomed unless it becomes a RTW state. Nobody will start a business here with the threat of the communist unions hanging over their head.

Toyota, Honda, and all the rest would be fighting to get in here for the skilled work force if not for the unions.

[bkepley]

I drive a Ford truck and it's my second one. They have annoying little problems but seem to last pretty well. This is going to sound stupid but I don't understand why GM puts GMAC on the front of their trucks rather than a symbol. GMAC on the front just looks cheesy to me.

[KarlInOhio]

The fact that many US trucks run so well proves that Detroit CAN produce good, reliable vehicles. Now the question is why DON'T they for their whole product line.

I've have two theories -

1. Short term accounting which gives design managers incentives to cut a couple of hundred dollars off the "little things" which saves money now but leads to bigger repair bills and shorter lives, thus giving the cars bad reputations and fewer repeat buyers. By then the manager has been promoted and it isn't his problem any more.

2. Too many name brands which leads to artificial quality reductions on the lower end. The Caddy has to be better than the Olds which has to be better than the Buick which has to be better than the Pontiac which has to be better than the Chevy. One way to do this (other than the obvious size and features) is to just build the lower name brands at a lower quality standard than the higher brands. GM doesn't want people buying Chevies because they are just as good as a Cadillac. I'm glad GM is dumping some of the brands so they don't have nearly as many steps down from the Cadillac to the Chevrolet.

I was (and still am somewhat) worried for the Japanese makers starting to separate their luxury brands from their standard brands, although this might be not be done so much because the non-luxury brand is the main company named brand. If they start coming up with lower end brands with a separate nameplate from their parent company, watch the quality on them drop.

Note, neither of these theories have anything to do with unionization. The average union worker is just as willing and able to put on a 10 cent seal as a 1 dollar seal, even if the 10 cent seal will last three years less time. That parts choice is entirely management's decision.

[cowtowney]

I wish someone in Wash DC would protect me from low priced, well-engineered and beautiful cars from Toyota. /s

"I'm from the government, I'm here to help".

[vetvetdoug]

The arrogant Unionized automakers and politicians of the Detroit area can't stand the deal for another reason, the new plant is in Mississippi...where Unions haven't got an edge from politicians and bureaucrats. The new plant is going to affect me directly...and my property values...I just hope taxes don't follow...

[Spktyr]

I was at a dyno day yesterday, and there was a near new F-350 Powerstroke 6L diesel truck there. I happened to know the owner, and he pointed out something that just blew my mind. Notice the cut and taped wires with NO SEALANT OR COVERING OVER THE CUT ENDS!!!

Larger version: http://www.dallasdrivers.org/albums/album286/IMG_1111.jpg - note that this is a large pic and slow to load.

It came like this from the factory. Someone in the audience went and checked his 05, and sure enough, it has the same cut and exposed wires there. Also notice all the rust on metal surfaces on a *Texas* truck that's never been off road and has under 20,000 miles.

Meanwhile, there was a three year old Tundra there with 120K on the clock, and the engine bay, while a bit dirty, still looked like new. What was that about "domestics having equal quality with the import names" again?

[Brilliant]

They can't believe that a nonunion shop could outcompete a union shop. They are clueless.

[Brilliant]

"They’re manipulating the yen..."



I thought the lib mantra was that Bush was causing the dollar to fall. I guess that the lib mantra changes faster than the weather.

[RayChuang88]

If they're griping about Toyota, just wait till they start griping about the likes of Hyundai/Kia when they start expanding their production in the USA over the next ten years.

Anyway, consider the Toyota Avalon, a larger family sedan that GM wished it could build. The Avalon is way better built, has very performance, and has the type of fuel efficiency that even GM would envy for such a big vehicle.

[Brilliant]

"complain that the Japanese government has kept the yen artificially low, allowing their auto producers to undercut competitors and reap huge profits in the United States."




Seems like only yesterday that they were complaining that the dollar is too low.

[nascarnation]

Enjoy your Toyota or Hyundai, that's the American economic freedom of choice. Dance on the UAWs grave, Lord knows they deserve the pounding they're taking.
But don't cry when Hillary or Obammy takes Ohio, Indiana, and Michigan and the Presidency in 08.
All those Reagan Democrats getting flushed in this process proved in 06 they're done voting Republican.

[LdSentinal]

Indiana will not vote for Hillary or HUSSEIN Obama in 2008.

[bkepley]

don't cry when Hillary or Obammy takes Ohio, Indiana, and Michigan and the Presidency in 08.

Well what are we supposed to do, protect their incompetence. Corporate welfare? I believe that the right to fail is as imporant as the right to succeed.

[hsalaw]

The only American-made car I've ever owned was a 1990 Ford Mustang convertible with the great, big V-8 engine. I loved that car and put 150,000 miles on it with no problems, then gave it to my brother-in-law who put another 50,000 on it. My first car was a 1964 MG-B (high school graduation), which was possibly the most unreliable car in the world, but I was a kid, so what did I know? Since then I've owned Volvos - each one had nearly 200,000 miles on it when I traded it in on the next.

[Brilliant]

They took Michigan last time. Almost took Ohio. They will probably take all 3 irrespective this time. On the other hand, those states don't pack the clout they did 30 years ago.

They pretty much slit their own throats. I am myself a refugee from Michigan. I could see where it was headed in the early 80s.

[cinives]

While I'm sure you're right about the quality (rust et al) under the hood, the Tundra, to the best of my knowledge, does not have the pulling power of an F-350. Nor does Toyota produce anything near the F-450, F-550 and so on.

When you're pulling 26K or better, the minimum you need is the F-350.

[LukeL]

I agree that Detroit knows how to build trucks an d SUVs but when it comes to cars Japan has us beat.

[MamaB]

I have been driving a Honda Accord since my first one in 1992. The one I am driving now is a 1996 with a little over 44,000 miles on it. I would not drive any other kind. I am short and this is the perfect car for me. My granddaughter wants me to get a new one and let her have this one. She loves to drive it. Guess I will just have to wait and see.