In some people’s dreams, the auto industry is made up of foreign automakers with cheap labour making light, fuel efficient cars and domestic auto makers with expensive labour and heavy SUVs that nobody wants. It’s all myth, of course. The pay gap isn’t all that big, and even Toyota makes a lot of money selling normal-sized station wagons. They don’t even make money selling Prii, or if they do, it’s not that much. Thus the idea that Detroit can be fixed by righting wages and forcing them to get green is just a fantasy
Here’s another similarity between the domestics and the transplants. They’re taking it on the chin, as well:
WSJ: Toyota Motor Corp. said Monday it is suspending preparations of its newest U.S. plant in Mississippi, citing the steep decline in the auto market.
The company said it would complete construction of the building but would hold off on installing equipment, delaying the start of production that was slated for 2010. “Due to the uncertainty of the market, it is impossible to say at this time when production will begin,” the company said.
The decision was reached at a meeting in Japan and is part of the company’s efforts to adjust production to match sales. Toyota has already extended non-production days at its U.S. factories in a bid to align supply and demand, after the company’s sales in the U.S. fell 34% in November from the same month a year before. Earlier this month, Toyota opened a new Canadian plant in Ontario that will begin producing RAV-4 crossovers, adding to its capacity in North America.
Of course, Toyota can survive without bailout money, because it’s global business is healtheir, and its car sales over the last few years have actually turned it a profit, so there’s a big cushion. But this idea that it’s just a Detroit issue and that everything is dandy for the lean-and-clean transplants is naive.