The Japanese one, that is, both here and in Japan. As Japanese auto purchases plummet, Japanese car companies are ratcheting down domestic production.
Production of passenger cars in Japan decreased 20.3 percent in November from the previous year to 737,797 vehicles, while production of trucks here declined 20.9 percent for the month to 106,170....
Auto executives have expressed dismay at the fall in Japanese sales, which have worsened in the last two months.
Japanese plants are being idled to reduce production, and thousands of assembly line workers have lost their jobs in recent weeks.
In the meantime, Japanese companies are also cutting production at their array of plants here in the US, but so far have only cut contract and part-time workers. Despite cuts in Ohio, Indiana and Alabama production, Honda is avoiding layoff. Toyota has avoided them so far, but may be forced into cutting North American workers.
What does this mean? Mostly that American auto workers aren't competing with Japanese workers any more, but with each other. The Japanese labor market is driven by Japanese demand, and the American labor market is being driven by American auto demand. These plants were originally put here to meet domestic US demand, and that's what they're doing.
Secondly, Japanese multinationals are no more loyal to Tokyo than US-based multinationals are loyal to the US. Otherwise, these Japanese companies would be cutting US employment in order to keep their Japanese workers employed, exporting cars to the US.
Finally, beware a currency collapse. Should the dollar decline precipitously against the Yen, and 14% is not precipitous, even operations that are making money here in the US could be endangered. All those dollars that Honda is making only help the parent company if they can be profitably shifted to other markets or other facilities. Otherwise, they're only good here in the US. If those dollars won't buy enough Yen, or Bhat, or whatever, to finance improvements elsewhere, their value to Honda HQ is greatly diminished.
