Economic Treason Sending Chrysler To Auto Graveyard

On Valentine`s Day, Chrysler sent a bouquet to its
North American workers. Eleven thousand manufacturing
jobs will be eliminated in the next 24 months—9,000 in
the states and 2,000 in Canada—and 2,000 white collar
workers will be let go, permanently.

The SUV assembly plant in Newark, Del., will be
closed. The Warren, Mich., truck plant and

South St. Louis assembly plant will each lose one of
their two shifts. Earlier, Ford posted the largest loss
of any company in history, $12.7 billion, breaking GM`s
record $10.6 billion loss in 2005. [Chrysler
restructuring to affect 8 plants in 3 states,
Associated Press, February 15, 2007]

Toyota, having swept by Chrysler and Ford, is
challenging GM for first in sales in the U.S. market.
When we were growing up, U.S. automakers had the entire
U.S. market to themselves and dominated the world
market.

How is Japan succeeding?

First, the Japanese make fine cars. Second, Japan
manipulates its currency to keep it cheap against the
dollar, to keep the price of Japanese autos below
comparable U.S. models. Third, Tokyo maintains a lock on
its home market by imposing a value added tax on auto
imports from America, and rebating that tax on autos and
parts exported to America. This double-subsidy can give
a Japanese car a 15 percent price advantage over a Ford
or GM car in both markets.

Fourth, Japanese auto companies setting up plants
here are free of "legacy costs" of pensions and
health insurance for retired U.S. workers. For Japanese
companies have almost no retired American workers.
Legacy costs at GM, Ford and Chrysler must be factored
into the price of every car.

Finally, there is the venerable practice of

"transfer pricing." Japanese auto parts
manufacturers overcharge U.S subsidiaries for parts.
This cuts the profits of their U.S subsidiaries and thus
reduces their U.S. corporate taxes. Profits are
repatriated, virtually untaxed, to Japan.

Thus is Japan capturing America`s auto market and
bringing down the great companies that built the
machines of war which brought down

Japan`s empire. Revenge is a dish best eaten cold.

To stay competitive in their own home market, U.S.
manufacturers are closing down plants, laying off
American workers and

building their cars

outside the United States.

The day before Chrysler`s announcement, the Census
Bureau trade figures were released.

Charles McMillion of

MBG Information Services had them broken down before
they hit the wires.

In 2006, the United States ran a deficit in traded
goods of $836 billion, a fifth-straight world record.
For manufactured goods, the U.S. trade deficit reached
$536 billion, worsening from the 2005 record of $504
billion. Under President Bush, 3 million U.S.
manufacturing jobs have disappeared—one in every six.

To understand what is happening to Chrysler, Ford and
GM, one need only glance at the trade figures in the
auto sector. The United States

ran a trade deficit in trucks, autos and auto parts
of $144.7 billion.

If America continues on this course, where we have
run up $4 trillion in trade deficits in manufactured
goods since

Bill Clinton took office, the end is predictable.

An eventual

collapse of the dollar, making us a poorer nation.
The shuttering of every U.S. factory that makes traded
goods. A constant hemorrhaging of manufacturing jobs,
now down to 10 percent of our labor force. An end of
America`s pre-eminence as the world`s foremost
industrial and technological power. An end to the Second
American Century, as the Asian Century begins.

Everything some have been warning about for
decades—huge trade deficits, a falling dollar,
de-industrialization, a rising dependence on foreigners
for the vital necessities of our national life,
diminished freedom of action concomitant with that
dependency—has come to pass.

The world is witnessing the passing of the United
States as the greatest industrial power and the most
self-sufficient republic the world had ever seen. Yet,
no one acts. Why?

Ideology is one reason. Free-trade fanatics are like
those devout Christians who will not undergo surgery,
even if their malady is killing them. Second, there are
the obtuse who simply cannot see that our "trade
partners" have found a way around the rules and are
skinning us alive.

Third, to gain and hold high office, candidates of
both parties depend on the contributions of a monied
elite, whose salaries, bonuses, stock options and golden
parachutes depend on a rising share price, which means
constantly cutting costs by moving production out of
United States and getting rid of high-wage American
workers.

There are rewards for economic treason.

Look for the Democrats to find a way to give
Bush—despite the astonishing record of trade failures
documented above—fast-track authority to negotiate still
more such trade deals.

Who takes the king`s shilling becomes the king`s man.

COPYRIGHT

CREATORS SYNDICATE, INC.

Patrick J. Buchanan needs


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State of Emergency: The Third World Invasion and
Conquest of America,

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