- The Washington Times - Wednesday, May 3, 2006

Unless you’ve been visiting another planet, you’ve no doubt heard plenty of unhappy news about the U.S. automobile industry. General Motors, an American icon, has announced massive buy outs and plant closings, while Ford has been shedding workers in the wake of weak sales. These facts are as unfortunate as they are true. But there is a less widely heard other side to this story.

While GM and Ford undertake painful layoffs, the new American automakers — international automakers who build cars and trucks here — are opening factories and hiring workers all across the country, particularly in Southeastern states that have not traditionally produced motor vehicles. The fact is, while some companies are facing undeniably difficult challenges, these problems do not define the U.S. industry as a whole. International automakers — companies like BMW, Honda, Hyundai, Nissan and Toyota — believe and are demonstrating that America is an excellent place to profitably build motor vehicles.These companies and their 103,000 employees represent a healthy, productive and growing part of the modern U.S. auto industry.

What’s more, for each U.S. job the new American automakers create, many others follow. As a result, these companies now support approximately 1.7 million additional jobs at dealerships, suppliers and other automotive-industry services across the United States.

Collectively, new American automakers have invested $36 billion in U.S. production and other facilities. Fully one-third of the light trucks and passenger cars produced in the United States are now made by new American automakers.And this investment continues to grow — by 2009, these automakers will invest another $3.3 billion and hire approximately 10,000 additional workers.

Unfortunately, the “Detroit Three”automakers and their defenders charge that the growth of the new American carmakers is somehow the result of unfair practices. One common rallying cry involves claims of currency manipulation by the governments of Japan and South Korea that allegedly subsidize foreign-owned automakers. But as the U.S. Treasury Department, the Congressional Research Service and the Federal Reserve Board have each pointed out in recent reports, there is no evidence that either country has engaged in currency manipulation. If there is no manipulation, there can be no subsidy.

More to the point is the fact that the vast majority of cars sold in America by these companies are built in the United States with parts made primarily by U.S. automotive suppliers.During the last two decades, the international companies have cut their imports by nearly 20 percent and increased their U.S. production almost sevenfold.On the average, over 60 percent of all vehicles sold by these companies in the United States are made in America with high levels of U.S. parts content.

With respect to allegations of an artificially low yen value, it is important to note that increased production in the United States, Canada and Mexico, rather than higher exports from Japan, accounts for nearly all of the increase in light-duty motor vehicle sales in the United States by Japanese nameplate automakers during the past five years. In other words, more than 87 percent of this sales increase is accounted for by higher production levels in North America.

Boiled down, there is really only one reason why the new American automakers are thriving. They are making cars and trucks that American consumers want to buy. In their pursuit of the American customer, these companies have become leaders and innovators in improving vehicle safety, increasing fuel economy and reducing emissions.

There are no tricks, shortcuts or “unfair” routes to success — just a commitment to designing and building quality cars that appeal to American consumers.

Timothy MacCarthy is president and CEO of the Association of International Automobile Manufacturers.

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