Yen rate gives Japanese automakers unfair advantage, Chrysler's LaSorda says
At the Mackinac Policy Conference in Michigan on Thursday, Chrysler president and CEO Tom LaSorda said he plans to call on George W. Bush to confront Japan about an artificially low yen rate that he maintains unfairly allows Japanese automakers up to a $3,000 advantage per vehicle over their American counterparts. LaSorda said that he, Rick Wagoner and Bill Ford plan to raise this topic, along with health care and energy policy, with President Bush in a meeting scheduled for later this month.
LaSorda drew attention to the 1.8 million Japanese vehicles that are still being imported into the United States, and although this number has decreased since years past, parts imported from Japan continue to exacerbate the issue.
[Source: Reuters]
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Reader Comments (Page 1 of 4)
Rene Curry 3:27PM (6/03/2006)
YES, YES, & YES! and to everyone that always says it doesn't matter, fix the problem anyway and we will see if it doesn't matter.
The Japanese did not set up manufacturing here because they love us, it was because of currency exchange rates.
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Michael Karesh 3:47PM (6/03/2006)
Rene, if the yen is so favorable, then setting up assembly plants in the US would NOT make sense. And the higher the North American content in a a Japanese car, the less impact the exchange rate has.
For decades after WWII the yen was fixed at 360 to the dollar. At some point in the 1970s it was allowed to float, and the long-term trend has been for it to gain ground against the dollar. Recently it's under 120 to the dollar, three times as strong as it used to be.
Somehow the Japanese manufacturers have adjusted to a 200% appreciation in their currency. And the European manufacturers have adjusted to a 50% appreciation in the Euro over a much shorter three-year period.
Yet Detroit likes to whine that the dollar, pathetically weak as it has been in these last few years of massive federal deficits, is always stronger than they'd like it to be. The yen is always 15-20% weaker than they think it should be.
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Carlos 4:05PM (6/03/2006)
My understanding is that the Feds keep the dollar the way it is because we need all of our non-automotive imports to stay cheap. If that changes, the general public's consuming power drops too much.
It's not all about cars, Detroit.
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Ducatti 4:22PM (6/03/2006)
Deal with it, it's a global market now. Stop whining and make better cars you stupid ass Larsodork! G.W. Bush is not going to do Sh&t but tell u to F off lol.
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dave 4:29PM (6/03/2006)
no, it's not all about cars. we have lost the steel industry, furniture, clothing, shoes, tv's, stereos, toys, computers, and the list goes on and on and on. all because of an extremly unfair trade imbalance on all segments of imports. the tarriffs on goods from the us to asia is so high, we will never recover. only when we get a president that cares about the working man in the us, and not about making his good old boy network filthy rich, will we maybe see a turnaround.
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iQuack 4:58PM (6/03/2006)
Blah, blah, blah, blah!
Always something other than making better cars which are now so global that it's hard to keep track of where they're from.
When I was in Japan 7 months ago, I didn't think most items I priced were so cheap at all. Sushi might have been a bargain, but that's what you'd expect.
And most high-volume Japanese cars are made in the U.S. in factories that were built here to eliminate much of the currency fluctuation problem.
The Euro was expensive last time I looked. La Sorda surely wouldn't complain about a lower euro that would make German hardware less costly here, would he?
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Paulo Becker 5:09PM (6/03/2006)
That's competition for ya. If the Japanese can sell cheaper, it means that they have a better manufacturing process, or are just downright more competent. If Detroit can't keep up with Japan, then it's time for some introspective looking, NOT for World War 3. So please don't get Bush involved.
And exchange rates have nothing to do with it. If the issue depended solely on exchange rates, then everything Japan has to IMport would break their economical balance, since their currency would have to be so weak.
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Aki 5:22PM (6/03/2006)
Typical whining from loser US auto execs. The "trade deficit" was a sham back in the 80s and 90s (tariffs went both ways), and since they've lost that pathetic battle now they're bringing up currency.
The top selling cars in the US are Toyota Camry and Honda Accord, both made in the US. Whoops. How do you account for that one LaSorda? Maybe the $3 grand comes from spiralling healthcare costs and less efficient factory processes? But you know, that'd require the execs to get off their lazy butts and actually do something. The big 2.5 have been so used to their cushy monopoly for decades that they've lost the ability to work as a competitive business. Instead, they've lowered themselves to whine that somehow their billion dollar companies have become the pity-party underdog.
I'm sure the "weak" yen is 100% due to cars, because the strength of currency is only dependent on one industry, you know. Has nothing to do with exports, nosiree.
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Shawn 6:14PM (6/03/2006)
If you guys think currency valuation has nothing to do with the problems faced by American industries, then let's just equalize the currency. Why is JPY valued less than CNY? 1 China Yuan Renminbi=13.9 Japan Yen. You don't think that is f'd up?
Japan and everyone else has restrictive trade policies against US goods & services. All we need to do is balance trade. You are completely insane if you think the billions of dollars of trade deficit is fair.
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Gardiner Westbound 7:04PM (6/03/2006)
It's deja vu all over again! In the 1980s, instead of producing relevant quality automobiles, U.S. automakers persuaded the government to restrict the numbers of imported Japanese cars. The Japanese preserved their profit margins by importing the same numbers of larger upscale cars, wreaking havoc on the domestics' mainstream products. When will the domestic automakers learn market interference is not a helpful substitute for products consumers will buy at prices that yield a profit?
The chief bellyacher, the guy who’s going to call Dubya, is Tom LaSorda of Daimler Chrysler, a German automaker. Why should LaSorda’s foreign automaker be given more favorable treatment than the Japanese?
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not important 7:22PM (6/03/2006)
china, japan, korea ect buy us treasury bonds at a loss(the inrest does not keep up with inflation) they do this to back up thier currency with the us dollar so that their exports make money. with the war in iraq esclating, katrina rebuilding and bushs tax cuts, this will not end any time soon. its a fact of global trade.
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Rene Curry 8:29PM (6/03/2006)
To Michael Karesh,
The first big push for Japanese automakers to set-up shop in the states was back when the Yen was around 83 to a dollar.
In todays world, the Japanese government continues to intervene to keep the Yen weak. Long term it will be a losing battle because the trade deficit is so large.
Toyota, Honda, & Japan Inc knows this and has been investing heavily in North American production for this reason. This is a good thing except that delaying the true valuation buys them time to be competitive when that day comes.
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sp 9:16PM (6/03/2006)
Rene - same as US govt maintains weak dollar to the point of collapsing the currency completly.
It is pretty ridicilous for US company to complain about currency, when dollar dropped 30%-35% since Clinton was in power.
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Paulo Becker 9:44PM (6/03/2006)
You know Shawn, a "balanced trade" is probably the last thing that the U.S.A. will ever do. Up to a few years ago, the US was interested in increasing trade activities with Brazil. It would be all well and good if it was a two way program, but guess what, while the north-americans were crazy to sell us all kinds of cars and high-tech stuff, they were not too interested in importing our orange juice and steel. And it's not because of quality issues: if it were, the U.S. government would not have to overtax (which they do) these two products in a clearly protectionist measure.
Now don't get me wrong: I would love nothing more than to have the north-american car industry busting up the useless Brazilian automakers and selling some quality cars over here. But to accept that, the north-americans must be willing to have a truly "balanced trade".
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Desmond 9:57PM (6/03/2006)
Hey Rene, did you just read what Paulo typed. Now take that you piece of turd.
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aw 10:24PM (6/03/2006)
"Why is JPY valued less than CNY? 1 China Yuan Renminbi=13.9 Japan Yen"
AHAHAHHAHA. The oversight in this sentence is so far out..... I don't know whether to laugh or cry. Are there really Americans that stupid as they say about international matters? Shawn, are you STUPID?
By your infantile logic, Indonesia must be in REALLY deep moose kaka, because it's US$1 = 15,000 Indonesian rupiah at one time.
5 yuan can buy a burger, but it prob takes 500 yen for one in Japan. Comprende, idiota?
Yeah, Americans bully their way into other people's markets through double standards and manipulating the IMF. Sure, 3000 of Americans died during 9/11, but how many people did the US kill over the years in Afghanistan and Iraq?
Bloody bunch of murderers and mathematical idiots.
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SL600 10:26PM (6/03/2006)
They aren't talking about sales, they are talking about the currency. People here are so quick to jump to the "US makers are out of touch etc" debate. BTW the American Honda/Toyotas have much of their parts from outside as it is said in the article but people seem to have selective reading.
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aw 10:27PM (6/03/2006)
"Why is JPY valued less than CNY? 1 China Yuan Renminbi=13.9 Japan Yen. You don't think that is f'd up?"
That is the most stupid comment I've read this week. Kevin Federline, stop posting on autoblog! (And ask Britney for $10,000 to convert into 100 million Indonesian rupiah so you can buy millions of your own records)
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Mehool! 10:27PM (6/03/2006)
"Always something other than making better cars which are now so global that it's hard to keep track of where they're from."
I guess looking at the parts content sticker is "hard" then?
"And most high-volume Japanese cars are made in the U.S. in factories that were built here to eliminate much of the currency fluctuation problem."
They were built here to eliminate currency fluctuation problems? Man, those Japanese do whatever the U.S. tells them don't they. The factories couldn't be here because it reduces/eliminates any import tax on full vehicles shipped here, labor rates being cheaper in parts of the U.S. than in Japan or to help win over buyers who look for "made in U.S.A.". The only problem is that the Japanese didn't/don't use unions (OK, except for what the NUMMI joint venture) so the playing field isn't level.
WAIT, DIDN'T WE SEE A WEEK OR TWO AGO THAT TOYOTA MADE NEARLY $3 BILLION OFF OF THE EXCHANGE RATE? And if that is blah, blah, blah? I'll take blah, blah, blah any day of the week and twice on Sunday.
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aw 10:30PM (6/03/2006)
Yes, read what Paulo said. You're the ones not playing fair, and now you whine about it.
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