From: llarsen%peruvian.utah.edu@cs.utah.edu (Loren Larsen)
Newsgroups: misc.consumers,soc.culture.japan,sci.electronics,alt.sex,soc.culture.african.american,misc.education,misc.entrepreneurs
Subject: Re: DOES AMERICA SAY YES TO JAPAN? - Off track!!
Date: 20 Dec 92 20:44:41 GMT
Reply-To: llarsen%peruvian.utah.edu@cs.utah.edu
Organization: University of Utah, CS Dept., Salt Lake City

In article <BzH7uq.CEu@ncube.com>, bob@ncube.com (Bob Kehoe) writes:
|> In article <3326@bsu-cs.bsu.edu> joemays@bsu-cs.bsu.edu (Joseph F. Mays) writes:
|> >Honda plants in America are assembly plants which build cars out of parts
|> >made and imported from Japan.  Read:  far fewer jobs, and less skilled
|> >ones.
|> >
|> 
|> I don't have any Honda data in my hands right now, but
|> the press release that accompanied the Camry Wagon I'm
|> testing this week claim that Toy's Georgetown, Kentucky
|> manufacturing plant produces three-quarters of all Camry
|> sedans sold in the U.S. and 100% of all Camry wagons
|> exported worldwide, using 75% domestic content.

I believe this to be fairly accurate.  Here is some data (a few years old)
on the Marysville, Ohio Honda plant.  They produce 360,000 cars each year,
in fact Honda expected in 1988 to be export 70,000 of these cars a year by
1991 - 50,000 of them back to Japan.  I don't know if this has happened 
however.  As far as componenents go, the Japanese have transplanted more than
250 component-manufacturing firms to the US to supply these plants.  These
firms are also building huge R&D plants in the US.  Mazda has a $23 million
facility in California and Nissan has opened a $40 million research facility
in Arizona.  

These plants will contribute $226 to $452 billion dollars to the US and
Canadian economies over the next 10-20 years and provide 60,000 American 
jobs.  This transplanting trend has just begun.

Earlier (in a previous post), I mentioned that it is highly advantageous for
Japanese companies to move their plants to the US because the cost of
transportation represents a huge portion of the consumer price of a product.
Due to lower costs in labor through automation etc., and the lower cost of
raw materials.  In fact the actual production cost of a product represents
less than 20 percent of the retail price.  The actual cost of farm labor and
raw farm products represent less than 15 percent of the price grocery 
stores and restaurants charge retail.  Only about 17 percent of the price
of finished apparel was attributable to the actual cost of cloth and labor
needed to cut and sew it.  Most of the rest of the 80 percent represents the
cost of distribution.  It makes a great deal of sense for the Japanese to
move their plants to the US and provide American manufacturing jobs.  Why
are most Sony TV's and Nissan cars also assembled in the US rather than some
lower-cost labor market?  Cost of distribution.

Certainly the Japanese aren't great gift horses trying to give America a break.
I believe they are unfair in their hiring and firing practices based on
ethnic origin.  They will destroy themselves long before they destroy America.

Here are some references to help back up my above comments (something far too
few posts on this topic seem to contain):

OTA, Technology and the American Economic Transition:  Choices for the Future,
207,237

Andrew Mair, Richard Florida, and Martin Kenney, "The New Geography of
Automobile Production: Japanese Transplants in North America," Automobile
Production (October 1988): 352-360.

Pilzer, Paul Zane, Unlimited Wealth The Theory and Practice of Economic 
	Alchemy, 1990, Crown Publishers, 44-46, 179-180.