One of my vendors sent this to me, I know sdome of it has been said before but I feel it's worth repeating...

GM: Announced that they will increase sourcing in Asia and trim capacity in North America. The plan is to increase purchases from suppliers in India from $15 million currently to more than $1 billion by the end of 2008. GM buys $85 billion of automotive components and other materials every year. A recent study by McKinsey Quarterly estimates that car makers can cut their annual bill for auto parts by 25% by sourcing more components to China and India. The Chinese government’s goal is to export 10% of the world’s $120 billion automobiles and auto parts by 2015. Total vehicle sales in China are expected to surpass Japan this year, making it the 2nd largest market in the world. GM’s market share in China rose to 11.4% from 9.8% a year ago.




Now I don't know about you guys but the industry I'm in this really hurts...

 

Now for the flip side of this...

Toyota announced they will increase their investment in the San Antonio plant currently under construction. Toyota will invest additional $50,000,000 to allow for 50,000 vehicle increase in capacity. Total investment in that plant will then be $850,000,000 with capacity of 200,000 vehicles per year. Total North America Toyota capacity will be 1.81 million vehicles, 1.44 million engines, and 600,000 automatic transmission by 2008. Toyota direct employment in North America is 37,000 and direct investment is $16,300,000,000. Annual purchasing of parts, materials, goods and services from North American suppliers totals $25,000,000,000.

 

You can thank the current tax system for this.

It punishes American manufacturers for keeping their operations in the states with insane taxes while the foriegn ones wind up catching a break because of the way they're treated here and back home.

The testimony to congress by one of the head honchos from Chrysler back when they were merging with Daimler explained it best. There was a tax savings of around 10% (on a company of this scale, imagine what that amount of $ means) by going DaimlerChrysler being based in Germany vice ChryslerDaimler being based in America.

Pleading with the gov to stop this horse **** and allow America to be prosperous in America has had no effect so far. They still slam Amercian corps with their obscene tax greed.

It's disgusting and it's time for a change.

 

Spot-on-the-money.
Nice post.

Nevermind the taxes and tarriffs that the importers are skirting, but they are also getting tax-breaks and incentives from local governments to relocate and build new facilities here to boot. For an existing company, there are no "incentives" to stay in a community where you already exist, and there ARE incentives to take your jobs offshore... go figure.

 

Wait... are you trying to say that if you have 'domestic' manufacturing plant and a 'foreign' manufacturing plant right next to each other with ALL factors being equal except for the fact that one is technically foreign and one is technically domestic, that the foreign manufacturer will pay less in taxes to our government than the domestic plant?

I've never heard that.

If they both pay the same in taxes then y'all are just looking for a reason to bitch since this is just a slap in the face to the people who refuse to admit that we're becoming more and more of a globalized non black and white economy where buying GM and buying Toyota has increasingly less and less of a difference in impact on our national economy.

 

And ppl want to say things like, fair game, level playing field, etc. Then the minute they move things abroad, to try and stay competitive, ppl slam them for it. Sounds like a bunch of to me! Yes that was a great post jkipp84! And yes it is time for a change! The real question is what can WE do, to bring about that change?

 

Are you suggesting that it'd only take an adjustment to state and federal tax codes (mostly the former) to keep American companies in the US? I don't buy it; not with what I've seen going on in the industry.

"Transplant" OEMs have been very good to many of us in the auto industry, which is why I had no problem putting a Honda Accord in our driveway alongside four GM products.

 

Tax breaks are the name of the game. Michigan's own governor has been offering foreign automakers tax breaks for many years to entice their business....Toyota's new R&D facility is one of the latest beneficiaries:

http://www.freep.com/money/autonews/...e_20050412.htm

Not only that, but the state was willing to sell the land to Toyota for far less than what it was appraised at, and less than competing bidders offered. Think GM got that kind of a deal for putting the Tech Center in Warren all those years ago? How about this article:

http://www.truthout.org/issues_05/062205LC.shtml

You can go on and on searching Google. I haven't been able to find such tax breaks for any nearby "domestic" assembly facilities, although there are a small number of tax breaks for GM and Ford in other places that I have found.

 

That's fine, I'm not going to buy an American car next either. They don't make what I'm looking for.

Adjust tax codes? Hell no, throw the whole damn frankenstien, hodge-podge, duct taped together over the last 50 years system in the trash and do what the founders of this country intended - Tax fairly!

If a foreign company sets up shop here, their governments (wanting prosperity) don't force them to pay taxes back home on $ made here. They're only responsible for paying any taxes the incur here.

Our gov is not so prosperity minded. Our companies have to pay both any taxes incurred at their location in a foreign country, and taxes back here. Sometimes the taxes paid to the foreign country are credited - but the difference is still collected here. No breaks here, the fat man wants his pork $.

Take a look at a european car. They do the Value added system. When they ship a car over here, their governments typically refund that VATS tax. When our car goes over there, our gov does not forgive the embedded taxes bundled up in it. They come here with a minimal tax already in the price, ours go out fully loaded. Thanks fat man! Way to compete!

There's a problem here with our government tax system, it's massive, it's oppressive, it's punishing of those who try to succeed, and it's un-American as all hell.

 

Yup

The foreign manufacturer gets more "incentives" (aka tax breaks) than the domestic manufacturer does.

 

There's actually legislation introduced now that eliminates the WHOLE IRS Tax Code. Eliminates all Property/Income Taxes - Everything. The only thing you would have is like a 20 something% Sales Tax. I can't remember the exact percent. It's interesting nonetheless. Could you imagine all the tax dollers saved going to something like that?

Another one is a flat tax instead of progressive. But I like the sales tax idea because it's simpler and you can decide how much tax you pay by how much you purchase. Although, I would like to know how that would effect the economy as well before changing anything... (as far as Sales go).

Both have good points and I think the Tax code is something that is in DIRE need of being updated/changed.

I actually haven't looked myself yet, but if anybodies interested: www.fairtax.org

 

H.R 25 for the house and S 25 for the senate. The FairTax bill. www.fairtax.org

Visit, read, make your own judgement - then tell your elected officials what you want them to do for you (you're paying them quite well anyway).

If you're as sick of this twisted game as those of us who're trying to change it, join the fight

 

I think for the ppl who say,............I never heard that! It's more like......They refuse to believe it! The flat tax/tax code elimination certainly sounds like a great idea. I don't know enough about it. I suppose, I should get a couple of those books that are out, and read up on it, before I can really comment on it! But it's worth a look. I agree the current sytem is f-ed.

 

I find the federal Sales tax more attractive than the flat tax, because, as mentioned before, you can CONTROL the amount of tax you pay. A flat tax, whilst a HELL of a lot better than what we have, is still not exactly what I want.

One thing is for sure. Do whatever you can, and get behind one of these. Ive already written my congressman, and both senators about it. If we can kill the income tax, and reduce the size of the bueracracy at the IRS, things would be flippin' awesome.

 

Thank you.

We need to start asking--nay, yelling--about why the Russians have a 13% flat tax and we have almost 50,000 pages of incomprehensible BS.

The fact that the former communists have a much fairer and simpler tax system than the United States should be a huge wake-up call.