In a message dated 11/25/2001 4:58:59 PM Central Standard Time,
ransom@setel.com writes:
Well I'm confused then. Doesn't the majority of the cost of a vehicle
consist of labor?? If you purchase a vehicle that is made in the USA then
most of the cost goes to the labor force here. The 'profits' that go back
to the parent companies are not all that great for a given vehicle.
Basically when a $25K Kentucky built V6 Camry is sold; $10K dollars goes to
the USA workers, $7.5K goes toward parts/materials that came from the USA
economy, $2.5K goes to pay for the USA built and financed plant (plus some
overhead), $2.0K goes to the USA dealership, $0.5K goes toward
transportation AND $2.5K goes back to the parent company in Japan.
Cars/Trucks that are built outside of the USA borders are the same with only
10% of the vehicle cost coming back. So would you like to stimulate the
Mexican economy or the economy of the USA?
(BTW,Majority of the GM products are not made in the USA, mainly Mexico.)
I'm not sure where you got your numbers from, but they are exactly what
overseas companies and their stock holders would like everyone to believe.
Not included in your numbers are design, engineering, management, accounting,
financing, and many other 'overhead' costs that make up the real majority of
the cost.
Labor is not the major cost. Despite what you hear, you should consider most
plants can produce more cars per day then they have employees. Even though
these workers are well paid in this country, they don't make $10K per day,
therefore, labor costs cannot be that high.
The majority of the materials in your Kentucky built Camary come from
suppliers that are either owned overseas or supplied by overseas companies,
not from the US. Many components come as assembled packages from overseas
(IP, engine, transmission, etc.) and that labor is not included when the
price is broken down. Also, these companies may have an office or a small
plant here to avoid the Tariffs like Toyota does when building cars here.
Your numbers do not reflect any of this.
In the long run, more realistic numbers for a $25K Toyota are like $1 to $3K
stay here, the rest is gone. Don't let anyone fool you on this.
However, even if the majority of the cost were labor, and the majority of the
money stayed here, what good does that do our economy when the majority or
the workers buy foreign products as well. Last time I heard, the top selling
cars were not American. Have you tried to buy American electronics or
clothes? It is almost impossible.
In the long run, the companies overseas gain control of the market and we
loose out. The automotive industry is one of the largest employers in the
states, especially when you consider suppliers. If they go (remember, there
are only two now) the country would drop into a real depression. Do you
think the US benefited when Chrysler was given to the Germans? Do you think
the US benefited when the amount of foreign automobiles sold in the US was
greater than domestic autos sold? Without manufacturing, this country
becomes more dependent on others and is unable to stand on it's own.
For what it's worth, my truck was built in Michigan, from mostly American
parts. I did my homework on all of this before I spent a dime.
Wayne
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