President Donald Trump asked on Tuesday last week that Japanese automakers consider making vehicles in the United States, apparently unaware they’ve been doing that for more than 30 years.
“Try building your cars in the United States instead of shipping them over. That’s not too much to ask,” Trump urged during an appearance before Japanese business executives. “Is it rude to ask?”
It’s not so much rude as breathtakingly oblivious to a central reality that has transformed, for the better, the nation’s auto industry over the past three decades.
He implied that Japanese manufacturers still ship more vehicles from Japan to the US than they produce here. That is not true.
“Honda, Subaru, Nissan, Mazda and Toyota built 2.4 million vehicles, accounted for one-third of all US auto production in 2016,” said Kristin Dziczek, director of the Center for Automotive Research’s industrial, labor and economics group. “Sixty percent of what they sold in the US was produced in the US.”
When you add Hyundai, Kia, BMW, Mercedes-Benz and Volkswagen, 48 percent of all vehicles assembled in the US last year were produced by someone other than Ford, General Motors and Fiat Chrysler, according to the International Organization of Motor Vehicle Manufacturers.
Toyota’s largest assembly operation in the world, with about 8,000 employees, is in Georgetown, Kentucky.
Residents of southeast Michigan and tourists from across the world have seen the first Honda Accord that rolled off the Marysville, Ohio, assembly line in 1982.
“Foreign automakers — Japanese, German, Korean — all have a strategy to build where they sell, and the United States is a huge market,” Dziczek said. “Local production protects against currency swings and creates jobs in the United States.”
The Japan Automobile Manufacturers Association estimates that its members built nearly four million vehicles in the US last year. Exports from Japan to the US have fallen from 3.5 million cars a year in 1986 to just more than 1.5 million in 2016.
Three out of four Japanese cars sold in the US last year were built in North America, including Mexico and Canada.
Japanese-brand automakers operate 24 manufacturing plants and 43 engineering and design centers in 20 states. Collectively they have invested $43.6 billion in this country.
In August, Toyota and Mazda announced plans to invest $1.6 billion in a new jointly operated assembly plant to be built in the US.
Despite that massive presence, the US still runs a trade deficit with Japan of about $69 billion. Ford, General Motors and Fiat Chrysler sell very few vehicles in Japan. That has been a point of contention for decades.
Comments like the one Trump made on Monday don’t earn him credibility with Japanese officials.
“The issue with Trump is that if you ignore some of the things he says, it might come back to bite you,” said Hoyt Bleakley, associate professor of economics at the University of Michigan. “Every time there is a comment like that, you have to factor in another wave of uncertainty about future economic or trade policy.”
The comments also come as Canadian and Mexican policy makers are growing increasingly frustrated with the Trump administration’s threats to withdraw from the North American Free Trade Agreement.
DETROIT FREE PRESS/TNS