Word: honda
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...industry accounts for 10% of Japan's overall economy; thus its falling fortunes are a major factor in a deepening recession. Domestic car and truck sales are down 13% from the 1990 peak of 7.7 ( million vehicles, and profits for the five biggest carmakers -- Toyota, Nissan, Honda, Mitsubishi and Mazda -- are off about 64% from the same year. Some of the smaller companies, like Isuzu, have been in the red for two years and may soon be joined by the likes of Nissan and Mazda...
Today's buzz word is "commonization," or sharing parts among old and new models, even among different carmakers. Honda is out in front in that race with its new Domani, a small family car that is 60% built with parts also used in other Honda models; previously the shared-component segment amounted to 10% to 15%. The carmakers are also considering a method already used by truck manufacturers: standardization of certain components, which allows parts companies to cut their prices. Zexel, a major high-tech partsmaker based in Tokyo, expects to get seven manufacturers to agree to a common fuel...
...companies need full-scale crises to force changes in their old habits. Ford came back from near bankruptcy in the 1980s by cutting costs and creating teams of workers and managers to design and build new cars. Such teamwork produced the Ford Taurus, which now vies with the Honda Accord for the title of best-selling...
...main reason that Clinton's idea will not work is that foreign companies like Honda, which invested in auto and motorcycle plants in Ohio in the 1980s and helped create thousands of new U.S. jobs, have little motivation to move their profits elsewhere. Germany's corporate tax rate is 51% and Japan's is 46%, while the rate in the U.S. is only 34%. "There's just not much incentive for these companies to move their profits to higher-tax countries," says Hufbauer...
...this new global economy, Reich writes, it matters little whether a company is based in London or Los Angeles. A Honda built in Ohio may have more "domestic content" than an Oldsmobile. The only policy that will benefit all Americans, Reich writes, is for Washington to "invest" in the two assets that won't leave the country: "human capital," such as education and job training; and physical infrastructure, from roads and bridges to high-speed railroads and fiber-optic communications. Such public investments, Reich argues, will encourage both U.S. and foreign firms to create jobs in America. How would Reich...