• Mar 8, 2006

OK, so maybe that's a contender for "Most Obvious Headline of the Year", but unfortunately, this simply points to how true it is. In 2005, auto parts contributed over $37B to the United States' trade deficit, which was up 20% from one year ago. On behalf of all of those in this country's auto industry, we say "ouch!"

Disappointingly, the increasing production of vehicles in the US by "transplants" (foreign manufacturers) resulted in a spike in the number of parts purchased from Japan during the past two years. To no one's surprise, there was also a substantial increase in the dollar value of components obtained from China, Korea, and Mexico... and it would appear that we blame for that trend should be spread pretty evenly among all the OEMs that manufacture cars in the US.

Barriers to entry in foreign markets - primarily tariffs - are said to be significant contributors to this particular problem. There's certainly a huge difference between so-called "free trade" and what any sane person would consider as "fair trade" when it comes to America's trade policy with some of the countries that contribute to this gap.

[Source: Automotive News]



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    • 1 Second Ago
  • 17 Comments
      • 8 Years Ago
      There is always a price to be paid for "cheap"

      Trade defecit
      Overall Defecit
      Deeper Foreign bond purchases to cover our defecit
      Lost jobs
      Downward economic spiral in areas affected by closings
      Aftermarket body parts from other than US suppliers that don't fit but insurance companies (marketed as like and kind) yet your insurance does not go down.

      Just to name a few

      And Paul, once again who do you work for? I'm sure if you work for an American company they'd love to hear your comments.

      The fault is ours, look in the mirror, we are a culture obsessed with price. Why? Because the squeeze is on our wages and our spending habits, from government right through to ourselves. We demand more content at the same price level.

      And worse, many believe we need to adjust our wages to compete with countries that as our leader says are "Good trading partners" Uh, except it's really pretty much one way trade, otherwise there would not be a deficit.

      Pauls comments are also pretty laughable, American companies provide many of the parts to the imports, Delphi, Viseton, Lear, Dana, Tower and plenty of others.

      Then you have to ask yourselves, how accurate is this figure and what does it REALLY mean when you open an American box from these companies and the part says, "Made in China" Where is that extra profit going? Based on recent performance, the CEO and guys at the top it would seem
      • 8 Years Ago
      I think I can point out Blair, Berlusconi, Bush, Koizumi, Putin, but which one's Chirac?

      http://www.automobilesdeluxe.blogspot.com
      Paul
      • 8 Years Ago
      maybe it is because the american workers and designers are not capable of producing quality parts. a car is only as good as the sum of its parts. maybe that is why american cars have improved is because the parts are not american.
      • 8 Years Ago
      Joey - (Kev) "Seems that while Toyota, Honda etc. ASSEMBLE the cars here the parts still come from Japan."

      I've toured a few of the Japanese plants. They have stamping departments, plastic departments, welding departments and paint departments, as well as Engine Plants: not just ASSEMBLY departments. Parts do come from other plants and countries, but they just don't snap the car together here in the US. Also
      • 8 Years Ago
      what do you mean chirac is there

      from left to right (i believe)

      Putin, Chirac, shroader,blair, bush, chretien, that japanese guy hahaha
      • 8 Years Ago
      Every decision you make has consequences, some intended, some not, that affect far more people than yourself. Like that crazy story about the butterfly that flaps it's wings and causes a hurricane half way around the globe, when you buy that Chinese made futchamacallit instead of that American made futchamacallit you set off a series of transactions that effect things on a dramatic, worldwide scale. Some are good, some are bad, but be aware of the results of your actions, both short term and long, before just deciding to do whatever selfishly appears to work out best for you today.
      Paul
      • 8 Years Ago
      #9
      I agree, besides gm and ford deserve to fail. they have taken advantage of their customers for too long. its time for people to trust the japanese, koreans and chinese.
      • 8 Years Ago
      Without a doubt free trade is a good thing. Everybody should do what he is best at. Would America go down the closet without GM and Ford? Sure not. The US dominates the financial markets and large parts of the internet industry. One could say that the US has moved one step forward alongside Britain and perhaps the Netherlands. GM and Ford will fail if they don't make good use of their opportunities. But the fact is that IF GM and Ford were making a better product and being competitive on the American market Japan would still remain the same hard turf for them as it is now.
      Free trade is great, but free and fair trade is even better.
      • 8 Years Ago
      > its time for people to trust the japanese, koreans and chinese.

      Nonsense, #10. Besides, what does trust have to do with it? Lord knows that the Japanese sure don't trust the Koreans or the Chinese, and vice versa. I'm simply saying that it makes sense to buy the best car for your own purposes, and who cares where it's made? Some people blindly adopt a "Buy American" policy, forgetting that Americans benefit hugely from global commerce. You, Paul, blindly espouse a "Buy Asian policy", which is just as ridiculous.
      • 8 Years Ago
      We always hear that the trade deficit is BAD. Ok, for $100, can anyone tell me WHY it is bad and what is a trade deficit?

      I used to think the same way, but then I actually spent some time researching it and trust me it is NOT a bad thing. the deficit does not matter... one of the few things I find myself agreeing with Cheney, gak, I almost threw up saying that, but believe me, it does not matter. Research it for yourself before spewing out the same fears you hear on the news.
      • 8 Years Ago
      RE: "maybe it is because the american workers and designers are not capable of producing quality parts. maybe that is why american cars have improved is because the parts are not american."

      I wonder why so many American's (assuming Paul is an American) are so giddy about seeing the domestic automakers fail? As previously mentioned, the ramifications are far reaching and not limited to the poor schmucks bolting on car doors. It's like wishing misfortune on yourself and your own community. Maybe one day that light bulb in their head will flicker on for a brief moment and they'll realize that kicking themselves in the head hurts.
      • 8 Years Ago
      Guess what? If Americans didn't buy cars with Chinese, Korean, or Mexican parts, there would be no reason to bring them here. I totally agree that our trade policies are failing, but some of the responsibility has to fall on the American consumer. If we said we are only going to buy cars that are built in America, and be willing to pay the premium, then the manufacturers would have no choice but to build and produce thier cars here.
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