2 comments December 15th, 2008at 10:05pm Posted by Eli

Now, do you suppose maybe they could have a word with Corker, Shelby, and all the other foreign-car-state senators?

Detroit’s Big Three aren’t the only automotive companies that want to see the government step in with some much needed financial help.

Overseas automakers, most notably Toyota Motor, all endorse some form of federal aid to keep General Motors, Chrysler LLC and possibly Ford Motor out of bankruptcy.


“We support measures to help the industry,” said Toyota Motor spokeswoman Mira Sleilati. “We just want a strong, competitive healthy industry.”

This may seem surprising at first, especially when you consider that much of the opposition to the auto bailout was from senators from Southern states home to auto plants operated by Asian auto companies, such as Alabama and South Carolina. But the Asian automakers insist they never lobbied against such help for the Big Three.


The overseas automakers, who between them produce more than 3 million vehicles a year at U.S. plants, all worry their production would be hurt if one of the U.S. automakers went under. That’s because a Big Three failure would likely lead to widespread bankruptcies in the auto parts supplier industry.

Erich Merkle, lead auto analyst with the consulting firm Crowe Horwath LLP, said there is much overlap between the automakers’ suppliers. Since most parts in an automobile have only a single supplier producing them, the disruptions in production will be severe and prolonged.

“It could take months for a Toyota to work through that and resume normal production,” he said.

Merkle said the current network of auto suppliers, manufacturers and dealerships have worked well for the overseas automakers, who have posted steady gains in their U.S. market share during the past few years.

Besides sharing suppliers, many dealers sell both U.S. and overseas brands. So the failure of a U.S. automaker could hurt the overseas manufacturers’ dealer network and their sales as well, Merkle said.

“There would be a severe disturbance in the force,” he quipped.

The story also points out that mass unemployment would seriously depress the foreign automakers’ sales, and that a collapse of the Big Three would be an opportunity for Chinese and Indian automakers to buy themselves an internationally competitive automotive operation, which would also eat into Japanese, South Korean and European auto sales.

The Republicans are so obsessed with breaking the UAW at all costs, that they don’t even care if they take their own states’ economies down.

(h/t dakine)

Entry Filed under: Economy,Republicans


  • 1. Charles II  |  December 15th, 2008 at 11:55 pm

    The Japanese probably also know that if GM and Chrysler go down, it will increase nationalistic resentment against them and end up costing them more than they can gain by just outperforming Detroit. The same principle applies to the Republicans, but they aren’t as smart as the Japanese.

  • 2. Eli  |  December 16th, 2008 at 12:01 am

    The Japanese automakers have a very different metric for “success.”

    I think the Republican approach to the possibility of a depression is much the same as BushCo’s approach to the possibility of a terrorist attack: If it happens, it’s a tragedy for Other People, but one they can use for their own benefit.

    Provided the depression hits during Obama’s watch and not Dubya’s, of course.

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