America's Next Great Carmaker: Toyota?

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America's Next Great Carmaker: Toyota?Once upon a time, there was a saying in America: "As General Motors (GM) goes, so goes the nation." That was a pretty troubling forecast, back when GM went bankrupt, but today it's starting to sound like a hopeful statement once again. Because judging from what's happening in Detroit, America's back, baby!

Up in the pages of Motown's leading paper, the Detroit Free Press, headlines are crowing over a planned addition of 33,000 new manufacturing jobs at the Big Three automakers. Combined, GM, Ford (F), and Chrysler are said to be planning a hiring spree that will lift their U.S.-based employment past 200,000 souls by 2015. Even better, contract negotiations with the UAW are anticipating wage hikes for new employees that could add as much as $5 an hour to their paychecks, which if all goes well, will average more than $19 an hour.

And that's just the beginning.

As Toyota Goes, So Goes America?

Perhaps the biggest news in the auto industry this past week (minus Ford's dividend reinstatement) -- and certainly the most surprising -- is this little gem, also hailing from the Detroit Free Press. In large part owing to President Obama's negotiation of a free trade agreement with South Korea earlier this year, Toyota (TM) will be expanding exports of U.S.-built vehicles to Korea for sale.

Last month, the company began exporting U.S.-built Toyota minivans. Toyota Siennas, to be precise.

It seems that the high cost of the Japanese yen is turning the U.S. into something of a low-cost producer. As a result, Toyota is finding it more economical to build Siennas in Princeton, Indiana, and ship them halfway around the world to Korea, than just build them at home and drop them off next door.

What's Next? Exporting Corollas From Kentucky?

Close. In fact, the story goes on to say that if all goes well with Sienna sales, Toyota's next step will be exporting Camrys from Kentucky, followed by even more Hoosier-built automobiles -- namely, Subarus manufactured in Lafayette, Indiana.

So what does all this mean to you?

Earlier this month, great lamentation was heard over the Department of Labor report that the U.S. added "only" 120,000 jobs last month. That's not enough to keep up with population growth, for one thing. For another, there was notable weakness in the manufacturing industry. Up in Detroit, the Big Three automakers are working to fix that. And now Made-in-America Toyota is lending a hand.

Motley Fool contributor Rich Smith does not own shares of any companies named above. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of General Motors and Ford Motor.



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dodie1990

Imported cars from Japan are cheaper in New York than Tokyo as every one is subsidized by their gov't. They have destroyed the domestic auto industry and with it the American middle class. Most good paying jobs are gone replaced by part-time minimum wage dead-end jobs like Wal-Mart. Some import cars are assembled here of imported components at much lower wage, low benefit jobs. The profits go home to Japan not to American shareholders. This makes you wonder who wonWWII? And we did it to ourselves by buying their cars. As we all work at Wal Mart and Burger Barn part-time we may not be able toafford anyone's cars.

December 12 2011 at 8:15 PM Report abuse +3 rate up rate down Reply
3 replies to dodie1990's comment
jw10588

toyota and nissan builds GREAT cars lol stop drinking the coolaide. I work for a company that rents cars, I can't tell you how many were returned that fell apart. Lets stop the myth about Jap cars maybe in the late 80's early 90's but do the research now most car makers are even in quality. And please don't give me the consumers report nonsense they admitted not even testing toyota they were based on myths and uncle louie at dinner parties (even though he couldnt even change his own oil) stating that he went 200,000 miles in a jap car and only changed the oil 3 times.....lol Drive by your local junk yard and tell me why so many GREAT NEVER DIE jap cars are there.

December 12 2011 at 7:14 PM Report abuse rate up rate down Reply
1 reply to jw10588's comment
vlady1000

I own 6 cars, 4 Americian, 2 Foriegn. I have more problems by far with the 2 foriegn cars. I usually drive a car until it dies. Had to give a Nissan Quest to charity when 7 years old with 95K miles on it, never ever had that with an american car. I have a couple GM products coming up on that age and milage, they have never been in the shop yet for anything be routine maint. In fact. they both still have the original brake pads, shocks, belts and hoses still (about time to get them changed, FINALLY). I'm sticking to the american products from now on.

December 16 2011 at 1:02 AM Report abuse rate up rate down Reply
eurosnow

The things that got all the car makers in trouble such as high wages, pensions, etc. seem to be coming back - The taxpayers bailed them out and the UAW took an ownership position and it appears thet the UAW is now getting what they want which is much higher wages, which in the long run will put the automakers back in an untenable position..

December 12 2011 at 5:48 PM Report abuse rate up rate down Reply
1 reply to eurosnow's comment
rich

Thank god we have the southern states that will bail us northerners out and take these low paying benefit-less jobs we don't want. That is where most, if not all foreign built cars are built. Those backward people said they will take every lousy non union job, like building autos, that we send them. We'll see how long this new found wealth and prosperity will take them. Hopefully to the point where we all speak with a southern drawll.

December 12 2011 at 7:39 PM Report abuse -2 rate up rate down Reply
browse62

Rick,
You are an optimist. Let's not count our chickens before they hatch. Let's give it a year and then see exactly how many cars assembled in the US have actually been exported to Korea. My guess will be less than 10,000. What is that compared to the number of Hyundai's and Kia's that Korea exports to the US? I'm not sure what that number is but my guess is that it's not too far from 1,000,000.

December 12 2011 at 3:34 PM Report abuse rate up rate down Reply
1 reply to browse62's comment
rich

Did you know both of these companies, Kia & Hyundai, manufacture in the U.S.
Only a liberal would would make these ridiculous statements. By the way, to my limited knowledge, No company has ever exported 1,000,000 cars to the U.S.

December 12 2011 at 7:51 PM Report abuse rate up rate down Reply
parthenon1

Toyota builds great cars as does Nissan, VW, Mercedes-Benz, Honda etc etc. but the vehicle that has grabbed my attention more than any other is the top two luxury models produced by Hundai. The best part of all is none of these employ UAW workers. After what Obama and the union leaders did to bond holders, many of which were widows living on the procedes for retirement. When Obama gave the company to the UAW after taking it from the Bond and stock holders none of us should buy the American owned American brands.

December 12 2011 at 3:06 PM Report abuse +1 rate up rate down Reply
2 replies to parthenon1's comment
jw10588

read jw10588 post

December 12 2011 at 7:16 PM Report abuse rate up rate down Reply
mdmichel8888

sorry but these are not AMERICAN car companies, there foreign...........BUY AMERICAN , they are the only ones who take care of AMERICANS...........PERIOD

December 13 2011 at 4:26 AM Report abuse +1 rate up rate down Reply
kv37

$19 an hour. Do you think the union well be happy with that? I don't think so.

December 12 2011 at 3:00 PM Report abuse rate up rate down Reply
1 reply to kv37's comment
rich

Heck no! That is why they will continue to die and the South will rise and prosper from the ruins.

December 12 2011 at 7:54 PM Report abuse -1 rate up rate down Reply
1 reply to rich's comment
mdmichel8888

yea right ...........the south can't count to 19!!!!!!

December 13 2011 at 4:25 AM Report abuse -1 rate up rate down
Bandit 1

Brilliant! Too bad Japanese cars are outlawed in Korea (as anyone who has been stationed there would know). The Koreans hate all things Japanese thanks to the horrific treatment they received during the colonial era. So in exchange for opening our borders ever wider we can sell cars no one will buy. Awesome.

December 12 2011 at 1:47 PM Report abuse rate up rate down Reply
1 reply to Bandit 1's comment
rich

Apparently you haven't been in Korea for the past 20 years. They are all there.
he Koreans were brutalized by the Japanese but the Koreans learned and have prospered. Isn't this terrible what the president has done which began in 2007.

December 12 2011 at 8:26 PM Report abuse -1 rate up rate down Reply
bill

GM DID NOT GO BANKRUPT IT WENT ON US WELLFARE.WE THE TAX PAYERS HANDER THEN BILLIONS AND GOT **** IN RETURN.MORE OF LARGE CORP'S OWNING CONGRESS.

December 12 2011 at 1:31 PM Report abuse rate up rate down Reply
nissanofhampton

did GM go bankrupt?

December 12 2011 at 10:30 AM Report abuse -1 rate up rate down Reply
1 reply to nissanofhampton's comment
rich

No. The government basically bailed out the unions to cover all their debt and unfunded accounts. If they went bankrupt, as they should have, a great deal of our problems would have been taken care of. Sorry to say, but most americans are ignorant and don't know how bankruptcy works. An example would be that every major, and most smaller airlines went bankrupt, yet they never missed a day and most, if not all, are profitable today.

December 12 2011 at 8:02 PM Report abuse +1 rate up rate down Reply