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Wednesday, November 15, 2006

Will Toyota Move Its Headquarters To Detroit?

Stocks: (GM)(TM)(F)(DCX)

The CEOs of the Big Three went to the the CEO of the United States. They wanted to discuss their problems. The yen. Labor costs. Medical costs.

They left the White House saying that they did not ask the President for a bail-out. It is a bit like saying that you won't join the world's most exclusive golf club, Augusta National, home of The Masters. Of course you won't join. You haven't been asked.

The CEO's of The Big Three won't get help from the US government. It isn't offering any.

It is clear to all who want to look that the car industry is not critical to the economic health of the US. It was once, but the industry is now too small, employees too few people, and is too troubled. GM has recently cut 70,000 jobs and this is on top of cuts at it US competitors and a number of auto parts manufacturers,

In addition the industry exports little. And, its contribution to the GDP as gone the way of big steel. The US employment grow in the auto industry comes from Japanese companies building plants on America soil.

If the US government want this country to have a competitive auto industry again, it will have to give Toyota an incentive to move its headquarters from Tokyo to Detroit. Then, everyone in Michigan can learn Japanese.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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