While a factor, labor costs alone are the primary reason. In reality is more about the wider regulatory burden on a company, including environmental controls
That said it does not explain why a Japan Company can make cars profitably in the US but a US Manufacturer can not.
If it was only labor why would Toyota not have a factory right next to GM's in Mexico and import cars from Mexico to the US?
I thought Japanese car factories in the US were all non-union (as opposed to the US brands)? Toyota does have a Mexico factory at least according to Wikipedia.
Correct, the Honda/Toyota plants in the USA are non-union.
Interestingly enough the “Clean Energy for America” bill pushes for additional tax incentives on EV's built by companies using union labor:
More specifically, the proposal says that electric vehicles assembled in the United States would qualify for a $10,000 tax credit while EVs that are built at facilities whose production workers are members of, or represented by, a labor union would be eligible for the full $12,500 credit.
Aren't clauses like this just a clear cut sign of corruption?
It doesn't even make a lot of sense as an incentive to have workers unionize, since why would workers care what price what they're selling cars for. The law would only exist to benefit existing unions.
I guess its that the Japanese Company can make cars profitably anywhere but making cars for the US market in the US means there's no/less import taxes, also because the factories are huge they often get local tax breaks, and the cars may also eligible for EV/hybrid tax credits (I think Toyota have sold over 200K so there cars can no longer get this).
I think making cars in Mexico for the US became less worthwhile when Trump pulled the US out of NAFTA.
>US became less worthwhile when Trump pulled the US out of NAFTA.
lol, trump did not "pull the US Out of NAFTA" not only is that not with in the power of the president to do, it was never on the table, NATA was replaced with USMCA, and only made a few small changes, for Automotive that means 75% of the vehicle components must be made in MX, US, or Canada, up from 64% under NAFTA
Nothing in the law would impact making at car in the US vs MX, and was aimed at preventing increased parts from China or other non-north American nations, and all of the changes were passed by congress with wide bipartisan support
OK - but he signed a deal with Mexico that replaced it and didn't the new deal mean that more parts had to be from the US and half the car factory workers needed to pay $16 an hour - which would make Mexico less attractive?
While a factor, labor costs alone are the primary reason. In reality is more about the wider regulatory burden on a company, including environmental controls
That said it does not explain why a Japan Company can make cars profitably in the US but a US Manufacturer can not.
If it was only labor why would Toyota not have a factory right next to GM's in Mexico and import cars from Mexico to the US?