From: greg@cherokee.b23b.ingr.com (Greg Moritz)
Subject: Re: Profits to Japan?
Reply-To: greg@cherokee.b23b.ingr.com (Greg Moritz)
Organization: Dazix, An Intergraph Company
Date: Sat, 7 Nov 1992 16:18:04 GMT

>> The Japanese, in order to survive here, will have to become integrated
>> producers who conceive, design, and build their cars here much like the
>> European arms of the US automakers.

> No, there is no incentive to make the car parts (components) 
  ^^           ^^^^^^^^^^^^
> here in America. 

Are we supposed to just take your word for it?  What about lower cost of
land?  What about lower transportation cost to market?  Don't political
pressures offer any kind of incentive to make parts here?  Sorry, it just
makes good business sense to build here.  Japanese management, in order
to maximize shareholder value *will* continue to integrate further and 
further here - just as US corporations did in Europe.

*All* automobile companies have design centers in Southern California.
They put them there because they get better work out of those studios
in *that* location than anywhere else in the world.  The auto companies
do it because they are looking for profits down the road - a mighty
powerful incentive - which you say doesn't exist.

>> Japanese investors probably own large chunks of Ford, etc.  If you
>> buy a Mustang, you are probably sending some profits back to Japan.

> True, the shocks are made by tokiko (I believe). But, I'll bet that 
> my mustang has much more North American Content ...

I'm not talking about the *parts*, I'm talking about the *profits* 
from all the parts mentioned by you:

> 5.0L V8 -  Borg Warner T5 gearbox - Rear end - Steering Gear - ....T

This thread is about where the profits go - not domestic content.  The
issue is whether if the domestic content of a Honda Accord was exactly
100%, would it still be 'bad' for the US economy? if a person bought one.
I'm saying that some of the profits from the 5.0L V8 still find their
way to Japan.               ^^^^^^^

> I bought this car (Mustang LX5.0) because:
> ... 2) A lot of the components are made by classmates in high school.

This is not a valid reason for buying American.  If you have a problem
with your mustang, you probably have a way to get it fixed.  Your friends
have some connections?  When I purchased my Lemon Mustang, I was out in
the cold.  I'll be your friends don't care if my car is laid up in the 
shop.  Why should I care if they get laid off?

Naturally, I can see that if you live in Detroit, you would not want to
buy a foreign car.  Your friends might resent you for it.  You might find
it vandalized (because it's not American).  

The issue your friends should be concerned with is how do they get the
millions of Americans whos' jobs don't depend on the auto industry to
buy their products?  It doesn't matter if they are affected indirectly
or not.  Why should they buy an American car?

Saturn has attempted to answer this question and are succeeding.  Most
of their sales have been to people who are feeling guilty about buying
a foreign car, but, still, once their reputation for quality is 
established, people will buy Saturns (I hope) because they are great 
cars - the same reason people buy Hondas.