Ghosn To Japan: Do Like Switzerland, Or Become Like Switzerland

ghosn to japan do like switzerland or become like switzerland

For quite some time, Carlos Ghosn had been the booh-leader against the strong Japanese yen. At the sidelines of the Tokyo Motor Show, he launched into his so far strongest worded tirade against the “abnormal” yen. He told the Japanese government to learn from the Swiss, and to basically peg the yen to another currency.

Currently, about half of the Japanese auto production is exported. At a loss or at the very least at no profit. No sane business person will invest into a country with no return, says Ghosn. Investments and jobs will go elsewhere:

“The main problem we are facing today is the uncompetitive value of the yen. The yen is not so much a problem for the Japanese carmakers. The yen is a problem for Japan. Japanese makers are moving production little by little outside of Japan. The car industry employs between four and five million people in Japan, and more than half of the industry works for export. If the car industry goes, a substantial part of employment is going to go with it.”

What the strong yen does is strengthen the industries of Thailand, China, Mexico, or other emerging export bases. Ghosn had said this for quite some time. The answer was that the Japanese government is helpless, that no amount of quantitative easing seems to be able to stem the strengthening of the yen. This time, Ghosn says what should be done:

“People say there is no solution. Wrong! Wrong! Look what the Swiss have done. Switzerland is a great benchmark of how a small country has drawn a line in the sand. They said: Enough is enough, we will not allow the Swiss Franc to rise above a certain level against the Euro. Everybody laughed, but they stuck with it. What we are encouraging is that the government of Japan takes the same stance. If Japan draws a line in the sand, the market will listen.”

If the Japanese government will not listen to the plight of its carmakers, carmakers won’t suffer, Japan will:

“Japanese car makers will survive this. They already are global. What we are saying is this: If there is nothing that is done, don’t blame us for the consequences.”

In other words: Follow the example of Switzerland, which had a similar problem with its rising currency, until it was effectively pegged against the Euro. Or watch the Japanese industry collapse to Swiss size.

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  • Inside Looking Out Inside Looking Out on Dec 04, 2011

    Say I am Japanese and to make profit I take low interest loan in Japanese bank, exchange it to $$ and deposit it in bank in country with higher interest rate, basically making money from nothing. To solve this paradox - when I exchange $$ back to yens - I have to buy yens back at higher rate. Therefore yen inevitably becomes stronger over time.

  • Rnc Rnc on Dec 06, 2011

    Been away for awhile, Japan can't do anything to change it's future (neither can the US or Europe (with the possible exception of Germany, Switzerland, Austria and Netherlands) for that matter, Goto the finance professor web page and watch the parts on LTCM (how to turn $3 billion into a half trillion $ bet that goes bad) and the asian financial crisis of 97' and 98' and it's like a 35mm negative that the US and Europe turned into a freaking IMAX feature, they can devalue and pump money right now, Japan's problem is it started that process 30 years ago and has run it's course, devalue you're people or industry (real industry, not finance or medical that just sucks wealth without creating) or government and in the end it's all three.

  • Kurkosdr Someone should tell the Alfa Romeo people that they are a badge owned by a French company now.The main reason PSA bought FiatChrysler is that PSA has the technology to enter the luxury market but customers don't want a French luxury car for psychological/mindshare reasons. FiatChrysler has the opposite problem: they have lots of still-respected brands but not always the technology to make good cars. Not to say that if FCA has a good platform, it won't be used in a PSA car.In other words, if those Alfa Romeo buds think that they will remain a silo with their own bespoke platforms and exclusive sheet metal, they are in for a shock. This is just the start.
  • Arthur Dailey For the Hornet less expensive interior materials/finishings, decontent just a little, build it in North America and sell it for less and everyone should be happy with both the Dodge and the Alfa.
  • Bunkie I so wanted to love this car back in the day. At the time I owned a GT6+ and I was looking for something more modern. But, as they say, this car had *issues*. The first of which was the very high price premium for the V8. It was a several thousand dollar premium over the TR-7. The second was the absolutely awful fuel economy. That put me off the car and I bought a new RX-7 which, despite the thirsty rotary, still got better mileage and didn’t require premium fuel. I guess I wasn’t the only one who had this reaction because, two years later, I test-drove a leftover that had a $2,000 price cut. I don’t remember being impressed, the RX-7 had spoiled me with how easy it was to own. The TR-8 didn’t feel quick to me and it felt heavy. The first-gen RX was more in line with the idea of a light car that punched above its weight. I parted ways with both the GT6+ and the RX7 and, to this day, I miss them both.
  • Fred Where you going to build it? Even in Texas near Cat Springs they wanted to put up a country club for sport cars. People complained, mostly rich people who had weekend hobby farms. They said the noise would scare their cows. So they ended up in Dickinson, where they were more eager for development of any kind.
  • MaintenanceCosts I like the styling of this car inside and out, but not any of the powertrains. Give it the 4xe powertrain - or, better yet, a version of that powertrain with the 6-cylinder Hurricane - and I'd be very interested.