America's Next Great Carmaker: Toyota?
Once upon a time, there was a saying in America: "As General Motors (GM) goes, so goes the nation." That was a pretty troubling forecast, back when GM went bankrupt, but today it's starting to sound like a hopeful statement once again. Because judging from what's happening in Detroit, America's back, baby!
Up in the pages of Motown's leading paper, the Detroit Free Press, headlines are crowing over a planned addition of 33,000 new manufacturing jobs at the Big Three automakers. Combined, GM, Ford (F), and Chrysler are said to be planning a hiring spree that will lift their U.S.-based employment past 200,000 souls by 2015. Even better, contract negotiations with the UAW are anticipating wage hikes for new employees that could add as much as $5 an hour to their paychecks, which if all goes well, will average more than $19 an hour.
And that's just the beginning.
As Toyota Goes, So Goes America?
Perhaps the biggest news in the auto industry this past week (minus Ford's dividend reinstatement) -- and certainly the most surprising -- is this little gem, also hailing from the Detroit Free Press. In large part owing to President Obama's negotiation of a free trade agreement with South Korea earlier this year, Toyota (TM) will be expanding exports of U.S.-built vehicles to Korea for sale.
Last month, the company began exporting U.S.-built Toyota minivans. Toyota Siennas, to be precise.
It seems that the high cost of the Japanese yen is turning the U.S. into something of a low-cost producer. As a result, Toyota is finding it more economical to build Siennas in Princeton, Indiana, and ship them halfway around the world to Korea, than just build them at home and drop them off next door.
What's Next? Exporting Corollas From Kentucky?
Close. In fact, the story goes on to say that if all goes well with Sienna sales, Toyota's next step will be exporting Camrys from Kentucky, followed by even more Hoosier-built automobiles -- namely, Subarus manufactured in Lafayette, Indiana.
So what does all this mean to you?
Earlier this month, great lamentation was heard over the Department of Labor report that the U.S. added "only" 120,000 jobs last month. That's not enough to keep up with population growth, for one thing. For another, there was notable weakness in the manufacturing industry. Up in Detroit, the Big Three automakers are working to fix that. And now Made-in-America Toyota is lending a hand.
Motley Fool contributor Rich Smith does not own shares of any companies named above. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of General Motors and Ford Motor.