Originally Posted By: Popinski
Now, I'm neutral about this subject but I could never figure out how you can defend the US auto industry when it comes to how much money is going back to America.
For example, the main defense is "If you buy an American car, the money is going back to America.".
From what I've heard, Korean and Japanese factories in America are actually helping America by a long shot. The Hyundai Sonata and Santa Fe use majority American metal and American made parts. Even with some money going back to South Korea, majority of the money stays in America. Same with the Toyota Camry: majority of parts are American and majority of the money is staying in the US... same with the Honda Accord which is greatly helping Ohio out. Heck, majority of Korean and Japanese cars are even engineered and designed in America.
Even American cars that are built in different countries help foreign countries more than the USA.
But the real question is, how can an American defend American cars when it comes to supporting the USA?
I hope this is not considered a political question because I have no intentions into making this political.
Frankly, you shouldn't defend the car makers. They should be able to defend themselves. They do that by making a product that people will buy over the competition.
The idea about where the profits go. They go to the investors. If anyone thinks that only Americans invest in "American" car companies, you are out of touch with reality. I'm sure folks from all over the world, maybe even Osama bin Laden have US car company stock.
So the profits argument really doesn't hold water, even if the US carmakers were turning a profit.
You can also buy the ADRs for companies like Toyota and Honda, thus getting a piece of the profits for yourself. I have several mutual funds that hold such ADRs. Not to mention I own some international mutual funds that are invested in companies all over the world, including foreign car makers.
So guess what, the profits from Toyota, BMW, etc fund my retirement plan.
So again, the profits overseas are a bogus point. I get profits right here from those "foreign" car makers.
FWIW and this page has links to other automaker stocks
http://www.google.com/finance?q=NYSE:TM
So why defend American cars? The domestic 3 have been moving plants outside the US for decades while their competition has been moving plants into the US.
Ditto for importing assemblies. The D3 want folks to "Buy American" but buy foreign when it comes to parts and sometimes complete cars.
Frankly, it can't be defended given the current business practices of the D3. As long as they themselves are buying overseas, how can they expect folks here in the US to only look at American cars.
Frankly, they can't.