Quote:
Originally Posted by rayhawk
Myth #7: Foreign car makers build cars in america and invest in our country and would pick up the slack in the economy for any loss in capacity from the big 3.
Actually I have tried to find some answers on how much of the money made by a foreign company building a car in the US stays in this country and how much leaves. I believe (but cannot find much data that states this) that foreign companies only build here to avoid tariffs and shipping expenses, and that most of the money ends up leaving our shores. It is much cheaper to export the money they make here than to import the cars.
I also believe that even when GM builds a car in Mexico, more of the money ends up in the hands of Americans than when Toyota assembles a Camry in the US. Maybe somebody has some idea where we can find better answers to this.
I know many American companies do this (such as HAAS automation-they build machines in China for the Chinese market) due to restrictions by the government and tariffs. They have to invest in China to do so but the profit that comes back here is many times greater than the money they invested in that country.
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I don't have any hard numbers, but the foreign makers spend about half as much as domestics do on their line workers. That is for both benefits and hourly pay. Both import a lot of parts from overseas for assembly here, but again, I would guess that the foreign companies do this more than domestics do. A minimal amount of engineering is done by those companies over here, though the domestic automakers are globalizing their efforts (Camaro for example). Then there is management pay, which nearly 100% goes overseas for foreign and nearly 100% stays for domestic. Also, something that is important for me is funding for universities. Engineering departments all across North America get millions of dollars from domestic automakers for R&D. Foreign car makers spend some here, but they spend much more in their home country.