General discussion

Honda and Toyota outsourcing more

to the US and other areas of North America

What a switch. I've read this is partly due to the impact of the recent tsunami on auto production in Japan. With Fiat now managing Chrysler, I need to wonder if other Detroit dominoes will fall. We could see these Asian models as being considered more "Made in USA" than those whose origins were from here. I must wonder how the UAW will be impacted in the near future over these production shifts.
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That's been going on for a long time.

Those employees are not union and the tariff on parts is less than on the full car. So it's cheaper to ship the parts and assemble them here.


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But what the article suggests is that we are now

shipping more vehicles back to the country of the business origin than they are shipping here. This sounds similar to our owning companies that outsource manufacturing to overseas countries that send the finished goods here. Perhaps our saving grace might lie as much or more in this type of practice than in just trying to win back business lost to overseas manufacturing or in trying to force US businesses to return manufacturing to our shores. We can certainly offer skills and a labor force to foreign businesses if we could just do so at a friendlier price.

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Actually some of the largest difference in

"American" cars and foreign cars built in this country manufacturing cost aren't the wages but the burden of the retirement costs.

Now granted union jobs have high cost retirement plans. I remember a study of several different sites of several of the domestic and foreign cars made (if you prefer assembled) in the US.

Salary was different but wasn't the largest difference it was cost of the retirement plan. First reaction is to blame over generous retirement. While that has to be a factor in some probably even most cases, it wasn't the main cost.

It was simply the foreign plants here didn't have as many employees and/or employees with as much service time as the domestic plans. A company can save money sometimes by closing down and opening elsewere in both it's easier/cheaper to build modern than it is to rip out and modernize AND because normally only a few managment employees move to a new facility. Since retirement pay is normally based on the number of years of service, older companies/sites have a higher cost than newer ones. Of course, turnover affects this cost greatly. Turn over (not counting downsidizing) is largely based on whether the company is as good or better than it's competition as a place to work.

Of course, in a downturn environment with higher unemployment, there is a desperation factor that drives people to take jobs they wouldn't have left their past jobs. It's an employers market, and they can take advantage of it to maximum profit and minimize cost. You can consider any and all practices as just business nothing personal, it's up to you if you consider employees to be interchangable parts or not.

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Sadly, it may be that many employees are looking for

job security without risk and, perhaps, union membership offers the closest possibility of that. An employer is already taking a risk and needs to pass some of that fear along to his employees. I'd think that if a person liked their job and had some fear of losing it should the company fail, they might be more inclined to be quality and production oriented. If they felt too secure, they may become less productive.

I am also reading about jobs moving to "Right to Work" states

"Workers are voting with their feet. They are migrating from unionized states to right-to-work states, where by law they cannot be required to join a union as a condition of work. As a result of population shifts in the 2010 Census, nine congressional seats will move to right-to-work states from forced unionization states in 2012. Winners include Texas, Florida, Arizona, Georgia, and South Carolina, while losers are New York, Ohio, Michigan, Illinois, and New Jersey."

and these states are faring better in our down economy than most. My own state, Ohio, is not a right to work state but is actually doing a bit better than many in the rust belt. We also have the largest Honda automobile factory in the US just up the road from me. They've been pressed to unionize but such efforts have not been successful and Honda is actually expanding here so the above mention of Ohio in the "loser" column doesn't sound to be exactly correct. I'm also reading that lower wages in right to work states is a myth. Our neighbor, Indiana , became a right to work state just this year and Honda is building there now. Honda has been a good neighbor and I hope we can keep them here but a recent resounding defeat of efforts to curb the public employee union's collective bargaining power has me worried. They are said to be flexing their muscles in hopes of further successes in November. I was hoping our current governor might revive the right to work efforts that were killed several governorships ago but he's still licking his wounds from his last attempt to mess with union might.

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