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."

[hsalaw]

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."

Maybe it's attitude. I think it's price and quality. Detroit unfortunately caved to unrealistic, unsustainable union demands, and tried to pass the costs to the consumer, when Toyota and the other foreign makers could sell their cars for less.

[Fan of Fiat]

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

Fixed it.

[gathersnomoss]

..."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."

Liberals and the unions, along with the complacent US automakers are to blame, not the yen. Thank you, Debbie Stab-me-now DMich.

[Wally_Kalbacken]

Stabbenow... sheesh!

[RightWhale]

They’re manipulating the yen and it creates big differences in what they can sell their automobiles for

The Highlander is not a giveaway. They charge well for it. All the same, it is well done and well finished which is not what you see when you lift the hood of a Durango.

[Fan of Fiat]

"They’re manipulating the yen and it creates big differences in what they can sell their automobiles for,"

LOL!

[goldstategop]

If Detroit made great cars for a decent price, people would buy them. But people don't don't want to be manipulated into buying high priced junk just because its made in America. Toyota has built high quality motor vehicles at an affordable price. Instead of finding ways to shut Toyota out of the marketplace, American automakers should try to learn from Toyota's success and build cars Americans want. That's how the free market is supposed to work.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[snowsislander]

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.

Actually, it's been quite a while since the Bank of Japan made any direct intervention in the currency markets, and even then that was back when the yen was around 103, not the current 117.

If it is any comfort to our Congress, as interest rates creep up in Japan, you will probably see the yen grow stronger.

[psjones]

MY first car was a brand new Buick Skyhawk, it was a POS. We replaced with a Nissan van, had no problems with it. Our husbannd's ford mustang didn't last that long, replaced with a camry. When we replaced the van, we got a Ford, it lasted 8 years with about 140,000 miles (we had to be towed in to Vegas) while the Camry was still going strong and it was older.
We now have 3 Toyotas.

[Disambiguator]

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

Toyota may be benefiting from the US maker's woes, but it's not unfair.

They made their bed (agreements with the UAW), now they're sleeping in it.

Toyota has a more efficient business model, which is why they are doing well.

[goldstategop]

Liberals think bailing out the U.S auto industry or shielding it from foreign competition will turn it around? Yeah, when Japan sinks in the Pacific.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Yorlik803]

Well, I had a 1990 Chevy S10 Pickup. It ran like a champ. The 4.3 Liter engine was a rocket and the price was decent. I had it for 14 years, and finally had to get rid of it after it started shedding body parts and the radio conked out.
My buddy has aToyota Tundra. It is a good truck, but not as well build as Chevy,s trucks. It has a bunch of noises and for some reason eats brakes.
I Love Chevy trucks.

[Cobra64]

You nailed it. The government does not understand world markets, or capitalism or free enterprise.

Those jack-asses should take a few economics and accounting classes, and study history.

US steel industry went down the tubes when we were rebulding Japan's steel mills after WWII, while mgmt. allowed our mills to decay and allowed labor's demands to run roughshod. All the while politicians were supporting labor just to get votes.

Today, thousands of auto workers are being paid to sit and read newspapers. Costs remain the same, lost productivity and crappy quality.

GM's money maker is GMAC. Well that only works if you're selling vehicles that the consumers want to buy and finance through GMAC. No sales, no GMAC financing. Duh.

Therefore the fiancial statements look like sh!t.

"Surprise ... Surprise"

[padre35]

Toyota has a more efficient business model, which is why they are doing well.

That is my opinion as well, I find it funny that a weak yen is blamed when the Toytoas are built in America, that would mean that the Japan is being paid in stronger US dollars at a time when the US dollar is weak.

With so much production occuring inside the US, it is hard to blame Japanese currency policy, look at where the Japanese are locating their plants, outside of Unionized areas and they are just as productive building a better product at a hefty price.

IE this is't Walmart flooding the market with chinese rubbermaid goods.

[Yorlik803]

The UAW is killing the auto makers like the USWA killed the steel makers.
The so called job bank is one of many thing s that is dragging the Big three under.
You cant have things like that anymore and hope to keep up to the Japs.

[dhs12345]

No, I think you hit the nail on the head.

Will some more comments to your statement...

For the longest time, American car manufacturers used American patriotism as a tool to take advantage of their American customers.

They could cut corners here and there and Americans would continue to buy. This changed for me in the 80s. I finally got tired of the crap that GM made and bought Toyota.

Now, if I buy American (only Chrysler), I don't spend a lot of money. Because the car will pretty much be "throw away" after 100K Miles, anyway. As it is designed to be -- throw away after the warranty expires.

[psjones]

I swore off GM after my horrible experience with the Buick, the car was not even 6 months old when I had transmission problems with it. It was all downhill after that, it started burning too much oil,etc,., eventually it got to the point where we were making payments to the mechanic almost every month. Maybe the trucks are better built, but we're not interested in buying any pick up trucks.

[GeorgefromGeorgia]

Ditto, I got sick of lemons and bought a Mercedes 190D. I had it 18 years. In 2004, I replaced it with a Ford Taurus that has worked out well for me. I won't be GM due to my past experience with them. If foreign works for me, I will buy it. Competition has made the US manufactures better, but the Union agreements are dragging them down.

[proudofthesouth]

I bought my first new car ever several weeks ago. Its a Hyundai.

I bought foreign for:

The price
The gas mileage
The quality
The GREAT extended warranty

I didn't buy American cause of:

The price
The quality
Lousy warranty