Honda Threatens to Leave Japan

by Robert Farago

Published: December 19th, 2008

Just-auto reports that Honda is dropping dark hints about its future as a Japanese domestic. In fact, if the island nation’s government doesn’t do some of that currency manipluation that Detroit’s been blaming for their lost U.S. market share for God knows how long, HoMoCo may up stakes and move. “Chief executive Takeo Fukui told a small group of reporters in Tokyo on Friday the strong yen could cripple Japanese industry and spur massive layoffs, and added the automaker would be forced to send more production overseas if the dollar persisted below JPY100. ‘If the government is saying, ‘We don’t care about the export industry’, then that’s fine – we’ll act accordingly… we could switch to importing more cars into Japan, bring research and development facilities overseas, and in an extreme scenario move our headquarters offshore. It would cause nothing short of a hollowing out of Japanese industry.” Whoa. So much for the suggestion that Detroit’s been hobbled by Japan’s support for its domestic automakers. Who’d a thunk it?

Robert Farago

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4 of 34 comments

Pch101 on Dec 20, 2008
I suppose this is actual confirmation that Japanese corporations do indeed pressure their government to manipulate their currency versus others. It really isn't confirmation, not at all. All countries try to manage their exchange rates to some extent, including the United States. You just saw an example of that when the Federal Reserve cut its rate to an amount that is basically equal to zero. The free market ultimately determines the value of a currency. Governments can try to impact the value, but they have limited ability to do so. Even in a control economy, governments have limited ability to set exchange rates. When governments incorrectly price their money, they end up with black markets. People on street corners will trade money in these situations because they know that the government rate is wrong and can only be imposed on the market with cops and brute force. What Honda was really telling Japan was to dump liquidity into the economy, because Japan's rates are also close to zero, so they are running out of options. That's what pretty much everyone around the planet has been saying that the governments of the US, EU, etc. need to be doing. The yen is strong, not weak. If Japan was manipulating currency, the yen wouldn't have quadrupled in value over the last 30 years.

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Dragonphire on Dec 20, 2008

This is nothing but a PR stunt and you idiots are jumping all over it...I wonder what you guys would do if your jobs went over to Japan.. Move with it I would hope.

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Buzzliteyear on Dec 20, 2008
Rix wrote: Honda certainly would not feel at home in San Francisco. Their US headquarters is in Irvine… Actually, American Honda's main campus is in Torrance, CA. Irvine is home to Mazda's corporate headquaters, along with a significant presence by Hyundai/Kia. Ford's Premier Automotive Group (Lincoln/Mercury, Volvo, Land Rover) used to be based in Irvine, but they moved back to Michigan several years ago.

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Chitbox dodge on Dec 21, 2008

first time ive posted but here goes: say this were 1963, when wages were high and the gettin' was good. could you imagine any car company from korea, japan, or germany ever wanting to plant roots here to build cars (or anything else really)? it would be akin to the outcry against nuclear power plants. "NOT IN MY BACKYARD! i didnt fight them "insert expletive here" just to have them undercut my wages with their junk!" now we beg them to come over; federally and locally bankroll them to come over. thats how bad it's gotten in this "new world economy". theres only so much wealth in the world, regardless of how much money we print. weve shipped our true wealth, our industrial might, everywhere else. there is only way to bring everyones standard of living to an equal level thats bring down the standard of living for most everyone in the industrialized world starting first in america. america as a sovereign nation means much of nothing anymore. weve lost our way in search of constant and continual growth in money, when deep down everyone knows that just cant be. some years are up and some down you can never have constant growth. uness you have had your head in the sand to the way things are for better than twenty years. and no i am not a supporter of any bailout for cars, banks, cities, coorporate welfare recipients, defense indutrialists, insurance companies or anybody else who's pants have just popped the top button and now they need liposuction. gm would be the first to say (up to 2 months ago anyways)that they were a multi-national conglomer-frick of the highest order. now they say "go USA" all the way. i just get disgusted. sorry if i rant.

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