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Oh What a Feeling - Toyota Outsells Chevrolet
Our Buy American Mention of the Week!
by Roger Simmermaker
December 29, 2002

Should America be concerned that Toyota is now selling more cars in the U.S. than Chevy, or that they are about to outsell Ford next year? The short answer is "yes." Read on for the long answer.

First, American companies like Chevrolet pay more taxes to the U.S. Treasury, employ more American workers, support the livelihoods of more retirees' pensions and health care, and get more of their parts from domestic sources than Toyota.

Toyota has only been making cars here since 1987. For their first U.S. plant, Toyota was given 1,000 acres of free land. A special trade zone was established so they could import parts duty-free from Japan, and another special deal was made to allow Toyota to avoid paying over $100 million in taxes. The plant was built with Japanese steel by a Japanese steel company. Financing was handled by Mitsui Bank of Japan.

The first car hadn't even been built yet and American car companies, steel companies, banks, and their workers were already taking it on the chin.

Rarely do American companies get such generous deals offered to them. Since they are based here, they are expected to produce here. And produce here they do!

American companies GM and Ford (Chrysler is now a German company) have twice as many plants in the United States than all their foreign competitors combined - including Chrysler, Jeep, and Dodge.

As Toyota surges past Chevy, soon to pass Ford, and then Honda does the same as they are not far behind, American car companies will probably be forced to lay off more Americans and shutter more plants. As the news hits the papers, Americans will likely spew their venom at American companies for failing to "compete" and build better cars.

But few Americans realize that it costs American car companies about $1,300 more to build a car than it does their foreign rivals because not only do they support more retirees and pay higher union wages, but they also get fewer tax concessions from their own government.

I can almost guarantee you that if you and I both went into business to build widgets, and I had $1,300 more per unit to spend on research & development and design, etc., odds are that I will probably outsell you too.

Most Americans also don't realize that favoring Toyota will inevitably put them on the hook for higher taxes. Why? GM's pension fund is seriously under-funded because of the stock market downturn. The U.S. government has already taken over the pension funds for troubled U.S. steelmakers. Could U.S. carmakers be next? And we all know who ends up paying if that happens - the American taxpayer.

It was once said that what was good for America was good for General Motors, and vice versa. But it is unlikely that we'll ever see a day when whatever is good for Toyota is good for America. That's because Japanese-owned Toyota will always do what's best for their home country, and not their foreign subsidiaries. America would be wise to do the same.


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