Sunday, January 22, 2006

Domestic v. Foreign

Jeff Olsen recently published an article on discussing Toyota's entry into the NASCAR world and the fan reaction to it. Mr. Olsen notes that this reaction has been mostly positive, and he surmises this is because NASCAR fans, "perhaps better than any demographic group - understand what's happening in the automotive industry," which is that Toyota is now manufacturing models in Indiana, while Ford and GM have plants outside the country. Mr. Olsen concludes that the line between foreign and domestic manufacturers has been blurred, and buying a Toyota is just as helpful to the American economy as buying a Ford or Chevy.
What Mr. Olsen doesn't seem to take into account is the difference between assembly line jobs and upper level (R&D, management) jobs. While Toyota may have factories in Indiana, their corporate offices are in Japan, and Toyota is certainly a foreign company.
Buying a Toyota is hardly the same as mailing cash overseas: many mutual funds include Toyota stock, and Toyota pours a fairly large amount of cash back into U.S. operations. However, the majority of Toyota's profits go home to Japan.
While the UAW may be thrilled that Toyota has opened so many jobs for them, the overall state of the U.S. economy is not aided by the proliferation of Camrys and Corollas, while it is rather directly linked to the success of both GM and Ford.
Mr. Olsen seems to share the rather popular opinion that the American auto industry is in no real danger, nor is it linked in any real way to the U.S. economy. The reality of the situation is that stereotypes brought on by inferior product in the 80's, along with aggressive and deceptive marketing by Toyota and other foreign manufacturers today, have put Ford and GM in very real financial danger. Further, the health of these two companies is extremely important to the health of the U.S. economy as a whole.
As always, chosing a vehicle that is the best solution for your particular needs is a smart move. Perhaps, however, country of origin should carry more weight in the decision than has previously been necessary.

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