Automakers Rush To Move Factories Out Of Japan To Cut Costs

The yen's rapid rise, the country's high corporate tax and ever-intensifying competition are forcing makers of small cars to transfer production overseas.

This trend is expected to negatively affect the country's labor market because 8 percent of the nation's workforce have jobs related to the auto industry.

Mitsubishi Motor Corp. has decided to transfer its domestic production of mini- cars to Thailand and other nations over the next few years because the high yen and fierce price war have made it unprofitable to produce the cars in Japan.

"We can't stand the high yen anymore," a Mitsubishi Motor executive said. "Furthermore, this country's corporate tax is too high."




 
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Agent009 - 10/18/2010 3:17:49 PM

+1 Boost

Anyone find it odd once Japan stopped manipulating the Yen, that all of their automakers started suffering from the same issues the Americans do?

High pay demanded by workers and low cost for automobiles demanded by the consumer simply do not mix.

uaw_lax - 10/19/2010 12:02:21 AM

-1 Boost

They have done it at least once this year.

uaw_lax - 10/19/2010 12:00:45 AM

-1 Boost

http://www.autoblog.com/2010/03/17/report-detroit-automakers-head-to-congress-to-talk-japanese-ko/

Agent009 - 10/18/2010 4:08:48 PM

-1 Boost

That started to end about 2 years ago, and as it eased they began to struggle with cost containment issues. It seems in comparison to workers in Thailand the Japanese autoworker is just as overpaid as in the US. Hence the exodus.

I guess no more workers for life in Japan anymore.

Yonder7 - 10/18/2010 5:12:26 PM

+1 Boost

And also same apply anywhere, US, Germany, England, Italia, Spain....just wait a few years more and wil start to see even expensive cars , coming from Asia and China.

wins555 - 10/18/2010 11:14:47 PM

+1 Boost

agree!

wins555 - 10/18/2010 11:15:42 PM

+1 Boost

Its a cycle that every manufacturer faces.

wins555 - 10/18/2010 11:28:23 PM

+1 Boost

This is sad for all car enthusiasts in the world. This means means that quality will be sacrificed again to maintain profitability or maybe survival. That 10 to 15 year old low mileage S-class, 7 series, Ls460, 911, etc. looks attractive right about now.

acronis - 10/19/2010 6:19:37 AM

+1 Boost

This is quite amusing. Every time I read a comment that asserts why car companies start whining about it being too "expensive" to produce cars because of their "overpaid" workers I get a good chuckle.

Funny how there is rarely a comment about the huge fat bonuses (read in the millions) that their CEOs and Corporate lieutenants make, not a peep about that.

Talk about two faced hypocrisy!

uaw_lax - 10/20/2010 7:45:52 AM

+1 Boost

Japanese ceo's still make over 2 million annually, more than enough to work just two to three years and be set for life.