How much will it hurt our balance of trade if Ford, G.M. and Chrysler go bust?

[techs]

http://en.wikipedia.org/wiki/General_motors
http://en.wikipedia.org/wiki/Ford
http://en.wikipedia.org/wiki/Chrysler

Can't find the Chrysler revenue on wiki, but Ford and GM combined had 350 billion dollars in revenue last year.
I am assuming not every last dollar of revenue will be gone. The automakers probably have some companies that make things that will still be made in the US.
But are we looking at 350 billion a year added to the trade deficit?
And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons? How much more would that hit our balance of trade?

btw iirc the trade deficit was about 950 billion last year?

 

[brownzilla786]

Originally posted by: techs
http://en.wikipedia.org/wiki/General_motors
http://en.wikipedia.org/wiki/Ford
http://en.wikipedia.org/wiki/Chrysler

Can't find the Chrysler revenue on wiki, but Ford and GM combined had 350 billion dollars in revenue last year.
I am assuming not every last dollar of revenue will be gone. The automakers probably have some companies that make things that will still be made in the US.
But are we looking at 350 billion a year added to the trade deficit?
And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons? How much more would that hit our balance of trade?

btw iirc the trade deficit was about 950 billion last year?

thats never going to happen, they already invested billions of dollars and we have the biggest markets they are after.

We would have 350 Billion erased from our GDP, not sure about trade deficit.

 

[StageLeft]

No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

 

[brownzilla786]

Originally posted by: Skoorb
No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

Right, but assuming most of the cars they get wont be produced in the U.S., it wont count towards our GDP

 

[StageLeft]

Originally posted by: brownzilla786

Originally posted by: Skoorb
No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

Right, but assuming most of the cars they get wont be produced in the U.S., it wont count towards our GDP

Presumably the foreigner's domestic manufacturing would increase here, but who knows how quickly or to what extent. I still think, though, that the domestics would not simply disappear. Picture a successful car company looking upon Ford. If it saw a half decent manufacturing facility with a workforce already in place and it had the need, why not pick that up, retool it to make Camry's, and get those workers on board with that? If these companies are so rotten to the core that nothing of them is of value, not the workers, the engineers, the patents, the facilities, well they are truly beyond hope. I think they have a lot of value, they just need to be taken under a different fold.

 

[soccerballtux]

Originally posted by: Skoorb

Originally posted by: brownzilla786

Originally posted by: Skoorb
No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

Right, but assuming most of the cars they get wont be produced in the U.S., it wont count towards our GDP

Presumably the foreigner's domestic manufacturing would increase here, but who knows how quickly or to what extent. I still think, though, that the domestics would not simply disappear. Picture a successful car company looking upon Ford. If it saw a half decent manufacturing facility with a workforce already in place and it had the need, why not pick that up, retool it to make Camry's, and get those workers on board with that? If these companies are so rotten to the core that nothing of them is of value, not the workers, the engineers, the patents, the facilities, well they are truly beyond hope. I think they have a lot of value, they just need to be taken under a different fold.

No company builds a car over there and ships it here (with the exception of the super high end brands like Ferrari et al). It's simpler just to build here. Like Toyota, they ship the parts here and assemble. By percentage of labor, it is the most American car. More American hours go into it than go into any Ford, GM, etc. car. Plus, that way they get the positive press of keeping jobs in America.

In short, the cost to America will be much greater in the long run if we teach American companies mediocrity is an option. They would be fine if their cars were as reliable as Toyota's. Their cars do not run to 400,000 without serious investment (IE, spending as much as the car is worth to keep it running). My old car guy sold his Tacoma to his brother in law at 325k, it's still running to this day, same engine, different transmission, that's it. The rest was routine maintenance (timing belt, oil, etc.). American cars just don't do that. And I reiterate (and this is not in opposition to you skoorb because in a lot of areas we agree), if they did, they would still be selling enough cars to stay afloat.

For Chrysler, this will be bailout #2.

 

[Capt Caveman]

Originally posted by: soccerballtux

Originally posted by: Skoorb

Originally posted by: brownzilla786

Originally posted by: Skoorb
No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

Right, but assuming most of the cars they get wont be produced in the U.S., it wont count towards our GDP

Presumably the foreigner's domestic manufacturing would increase here, but who knows how quickly or to what extent. I still think, though, that the domestics would not simply disappear. Picture a successful car company looking upon Ford. If it saw a half decent manufacturing facility with a workforce already in place and it had the need, why not pick that up, retool it to make Camry's, and get those workers on board with that? If these companies are so rotten to the core that nothing of them is of value, not the workers, the engineers, the patents, the facilities, well they are truly beyond hope. I think they have a lot of value, they just need to be taken under a different fold.

No company builds a car over there and ships it here (with the exception of the super high end brands like Ferrari et al). It's simpler just to build here. Like Toyota, they ship the parts here and assemble. By percentage of labor, it is the most American car. More American hours go into it than go into any Ford, GM, etc. car. Plus, that way they get the positive press of keeping jobs in America.

In short, the cost to America will be much greater in the long run if we teach American companies mediocrity is an option. They would be fine if their cars were as reliable as Toyota's. Their cars do not run to 400,000 without serious investment (IE, spending as much as the car is worth to keep it running). My old car guy sold his Tacoma to his brother in law at 325k, it's still running to this day, same engine, different transmission, that's it. The rest was routine maintenance (timing belt, oil, etc.). American cars just don't do that. And I reiterate (and this is not in opposition to you skoorb because in a lot of areas we agree), if they did, they would still be selling enough cars to stay afloat.

For Chrysler, this will be bailout #2.

A number of vehicles are made overseas and shipped to the US. For example, the Toyota Prius is manufactured in Japan and China only then shipped to the US.

Lexus and Scion aren't manufactured at all in the US.

 

[Ktulu]

Originally posted by: soccerballtux

Originally posted by: Skoorb

Originally posted by: brownzilla786

Originally posted by: Skoorb
No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

Right, but assuming most of the cars they get wont be produced in the U.S., it wont count towards our GDP

Presumably the foreigner's domestic manufacturing would increase here, but who knows how quickly or to what extent. I still think, though, that the domestics would not simply disappear. Picture a successful car company looking upon Ford. If it saw a half decent manufacturing facility with a workforce already in place and it had the need, why not pick that up, retool it to make Camry's, and get those workers on board with that? If these companies are so rotten to the core that nothing of them is of value, not the workers, the engineers, the patents, the facilities, well they are truly beyond hope. I think they have a lot of value, they just need to be taken under a different fold.

No company builds a car over there and ships it here (with the exception of the super high end brands like Ferrari et al). It's simpler just to build here. Like Toyota, they ship the parts here and assemble. By percentage of labor, it is the most American car. More American hours go into it than go into any Ford, GM, etc. car. Plus, that way they get the positive press of keeping jobs in America.

In short, the cost to America will be much greater in the long run if we teach American companies mediocrity is an option. They would be fine if their cars were as reliable as Toyota's. Their cars do not run to 400,000 without serious investment (IE, spending as much as the car is worth to keep it running). My old car guy sold his Tacoma to his brother in law at 325k, it's still running to this day, same engine, different transmission, that's it. The rest was routine maintenance (timing belt, oil, etc.). American cars just don't do that. And I reiterate (and this is not in opposition to you skoorb because in a lot of areas we agree), if they did, they would still be selling enough cars to stay afloat.

For Chrysler, this will be bailout #2.

I don't even know what to say about your post except that you are delusional and completely unaware. Please provide us with proof that Toyota or Honda spend more time and resources here in American than the domestics. As far as reliability goes no one is disagreeing that on average asian cars or more reliable but that are a very high number of domestics out there with 300K+ miles on them.

 

[brandonbull]

Those days of the imports being "super cars" are gone. Look what happens once the Jap brands are market leaders, they get tons of recalls and their quality falls. They now have to build more than 3 different models so they can't waste time on developing a limited model lineup.

 

[bamx2]

They may go bankupt but not liquidate . They can reorganize and can become efficient . I am all for vs the bailout of these behemoth business business models and practices ( mangement + unions) that don't work in today's world . The sooner the better .

 

[Squisher]

Originally posted by: Ktulu

Originally posted by: soccerballtux

Originally posted by: Skoorb

Originally posted by: brownzilla786

Originally posted by: Skoorb
No way if we kept purchasing up would we have 350 B year trade deficit. First, these companies make plenty of cars outside the US. That "domestic" Ford may have come from Ontario. Many foreign brands are made domestically. If the companies disappeared, Honda and others would pile in. The trade deficit is mainly in regard to profits to HQ for a foreign brand made domestically. It still represents a ton of productivity for the US.

And what if Toyota, Honda, BMW, etc decide that they don't need to make cars in the US anymore for political reasons?

Like what? That is inconceivable.

We would have 350 Billion erased from our GDP

Not really, though, because presumably people still need their $350B of cars and will get them from somewhere.

Right, but assuming most of the cars they get wont be produced in the U.S., it wont count towards our GDP

Presumably the foreigner's domestic manufacturing would increase here, but who knows how quickly or to what extent. I still think, though, that the domestics would not simply disappear. Picture a successful car company looking upon Ford. If it saw a half decent manufacturing facility with a workforce already in place and it had the need, why not pick that up, retool it to make Camry's, and get those workers on board with that? If these companies are so rotten to the core that nothing of them is of value, not the workers, the engineers, the patents, the facilities, well they are truly beyond hope. I think they have a lot of value, they just need to be taken under a different fold.

No company builds a car over there and ships it here (with the exception of the super high end brands like Ferrari et al). It's simpler just to build here. Like Toyota, they ship the parts here and assemble. By percentage of labor, it is the most American car. More American hours go into it than go into any Ford, GM, etc. car. Plus, that way they get the positive press of keeping jobs in America.

In short, the cost to America will be much greater in the long run if we teach American companies mediocrity is an option. They would be fine if their cars were as reliable as Toyota's. Their cars do not run to 400,000 without serious investment (IE, spending as much as the car is worth to keep it running). My old car guy sold his Tacoma to his brother in law at 325k, it's still running to this day, same engine, different transmission, that's it. The rest was routine maintenance (timing belt, oil, etc.). American cars just don't do that. And I reiterate (and this is not in opposition to you skoorb because in a lot of areas we agree), if they did, they would still be selling enough cars to stay afloat.

For Chrysler, this will be bailout #2.

I don't even know what to say about your post except that you are delusional and completely unaware. Please provide us with proof that Toyota or Honda spend more time and resources here in American than the domestics. As far as reliability goes no one is disagreeing that on average asian cars or more reliable but that are a very high number of domestics out there with 300K+ miles on them.

I'll try to find a source but the last I heard all foreign companies together employ about 60,000 employees here in the USA. These figures were from a couple of years ago though. And, the bulk of their product assembled here uses content made offshore.

 

[Dari]

Die-hard Chicago-school economists can say whatever they want about "letting the market decide". But we live in a political-economy and government should do all it can to help American companies out (just like they do in Europe and Asia).