Honda moving manufacturing out of Ohio due to yen undervaluation

April 21, 2016


(Stumo note: Japan's currency undervaluation is causing Honda to move auto production out of the United States. The article below shows a recent example of shifting from Ohio back to Japan. This is a big reason why the TPP is a stupid trade agreement because it does not fix currency undervaluation.)

John Lippert | Bloomberg News | April 21, 2016

Honda Motor Co. unveiled a gasoline-electric Accord sedan that will be exported from Japan to help deal with currency fluctuations and sluggish sales.

The company stopped making Accord hybrids in Marysville, Ohio, last year while it shifted production to its Sayama plant near Tokyo. Honda showed off the new Japan-built model to reporters Wednesday in Detroit.

“Honda is trying get back into the hybrid market with the Accord, and this is a low-risk way to do it because of multiple markets they can serve from Japan,’’ said Alan Baum, an independent auto analyst in West Bloomfield, Michigan. “Plus, making vehicles in Japan is much more profitable than it was three to four years ago.’’

Japan’s currency has weakened to about 110 yen to the dollar from 76 yen in January 2012, boosting the value of exports for the country’s manufacturers. And U.S. sales of the Accord hybrid have declined, with a 21 percent drop to 11,063 last year. The hybrid market has been dominated by Toyota Motor Corp.’s Prius, which generated 184,794 U.S. deliveries in 2015.

Honda may also export Civic small cars and CR-V sport utility vehicles from Japan to the U.S., President Takahiro Hachigo said last month. ...

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  • If the USA had a trade policy that imposed tariffs and/or restrictions on any imports we deem harmful to our industries or security, then currency values could be one of the many criteria used to impose Customs sanctions. There is no need to make treaties on currency manipulation, Congress can and should protect our industries as our sovereign right and its Constitutional duty. In the same way, Japan, China and any other country has the sovereign right to value their currency as they deem best for their national interests. Such behavior only makes us a victim if we stupidly keep Free Trade policies leaving our market wide open to excessive imports. Proposing the TPP would be acceptable or good if only it had currency manipulation language falls into the trap, engineered by the Peterson Institute and echoed throughout the trade policy reform movement, that our deindustrialization is caused by NOT ENOUGH Free Trade (aka “cheating”) rather than by a lack of national economic strategy and exercise of our national sovereignty in the national interest. Read Eamonn Fingleton on the “Confucian Economies” (ie, In the Jaws of the Dragon) to dispel any delusions that there ever will (or should be) be global laissez-faire economics. The TPP CANNOT be made acceptable no matter what currency language or larger set of conditions are added, because it ultimately would move us further into global governance and ties the hands of sovereign states from acting in the best interests of their citizens.