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How to save GM with the stroke of a pen

By       Message jerry kroth       (Page 1 of 2 pages)     Permalink

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opednews.com Headlined to H3 4/18/09

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Saving GM from bankruptcy with the stroke of a pen.

Jerry Kroth

The media constantly bombards us with one set of facts, but the other gets little play. We hear about GM struggling, bailouts, bankruptcy, massive layoffs, and how Toyota, Honda, and Nissan will fill the vacuum created by any GM or Chrysler bankruptcy.

But what we don't hear ought to pique your interest: Last year Japan imported a whopping 8,000 Fords. That's right, 8,000 Fords were sold in Japan while Toyota sold two million automobiles here. Honda sold a million. According to Frank Fillipo of Autoblog, poor GM only sold a paltry 2,000 cars in Japan last year.

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Why? Well, the average GM car in the US costs about $25,000, but in Japan the same car costs $50,000. A big mark up, plus tons of other obstacles and restrictions. No one calls that protectionism, but that is exactly what it is, and what it has been for years.

"Oh," you say, "American cars are just not competitive with the Japanese!" Get real. There is an overwhelming pressure to keep all foreign imports out of Japan, whether its so-called "inferior" American cars, "infected" Washington apples, or "tainted" American meat. Time to look beyond the propaganda. Eleven Saturn vehicles were sold in Japan-a car made jointly by the US and Japan-and a piddling twelve Rolls Royces saw buyers in Tokyo. I guess Rolls Royce is considered inferior as well.

Peter Mandelson, the EU's external trade commissioner said last week that Japan was "the most closed developed market in the world and that imbalances. . . were truly staggering." It isn't the lack of quality of American cars folks, it is the social pressures within Japan and the complex layer-cake of bureaucratic restrictions that keep all imports marginalized, not just our cars.

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To be specific: The Japanese car market of 4.5 million vehicles begrudgingly allowed only 6 percent of their car market to be made up of non-Japanese manufactured vehicles. In South Korea the situation is even worse. It imported 9,000 US cars but sold 800,000 cars in ours. If you think a Kia outperforms a Malibu, you're not firing on all cylinders.

Imagine a refreshing change: equality, balance, fairness, a new law requiring that Japanese and Korean car manufacturers only allowed to sell the same percentage of cars in the US that they reluctantly import into their countries-in other words, the playing finally leveled!

Well guess what would happen: GM, Ford, and Chrysler would start filling the vacuum created by the sudden absence of Toyotas, Nissans, and Hondas from American showrooms instead of the reverse. If Japan could only sell to us what it purchased from us, it would be limited to 6 percent of the US car market and not a fraction more, and Korea would be limited to two percent.

Thousands of American jobs would be saved; thousands more created. Inner cities would come back to life. Foreclosures and evictions in Flint would stop. The rust belt would experience a renaissance. Detroit would rise from the ashes and re-open its schools-last week it closed twenty-five percent of its elementary schools due to its own financial implosion.

Instead of Detroit, let's have Toyota City take it on the chin for a change.

A simple solution indeed! Let's call it the Automobile Import-Export Fairness Act. Sure the Japanese would yell, scream, and protest that they had to start letting their showroom dealers sell Fords and Chevys at competitive prices. Maybe a trade war would start; maybe they'd cash in their T-bills. But it is just as likely that the bigwigs of Toyota, Nissan, Honda, and Kia would hurriedly ask parliamentarians to open up markets immediately to allow more American cars to be sold there so their cars could be sold here. Otherwise they'd lose market share, big time!

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Isn't it time we saw Toyota lose market share to GM instead of the reverse?

Certainly a thought. A thought for every UAW worker facing a layoff, every Michigander fearing loss of his job, pension, and home, and every elementary school child in Detroit watching his teacher fired as his school is boarded up.

Maybe Senator Levin, Congress, and the media are opposed, but in the days of Jimmy Hoffa and Walter Reuther, a healthy strike by autoworkers and sympathetic truckers could shut our country down until we saw some real action. Maybe its time to clog the turnpikes, slow interstate commerce to a crawl, and demand that fairness in trade finally become real. If now is not the time, well, just how close does the patient have to get to death before we decide to stop the bleeding?

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Jerry Kroth is a professor at Santa Clara University in California, a frequent contributor to Counterpunch, and the author of eight books, the most recent: Conspiracy in Camelot: the complete history of the assassination of John Fitzgerald Kennedy, (more...)
 

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How to save GM with the stroke of a pen