why do foriegn car companies come to the US to make cars, and american car companies go outside of the US to make theirs?

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  • Anonymous
    5 years ago
    Favourite answer

    The US manufacturers got themselves into a situation where the labour unions had too much power, and had forced up wages, added benefits etc, until the business wasn't competitive with overseas manufacturers. The unions resisted any modernisation, changes in procedure, reduction of worker numbers etc. End result is the companies went broke. Moving some of their manufacturing to other countries was one strategy to get around the problem.

    Foreign firms where able to come in and set up the new factories without the union baggage. they could still pay decent wages, but had much better ability to select the workers they actually needed, pay according to performance, and bring in the much better engineering and quality control practices from Asia. So they are able to build competitive cars in the US, where the US companies seem to have trouble.

    So you get the strange situation where a Toyota or Honda is mostly US built, and a Ford or Chevy might actually be built in Mexico or Canada.

  • 4 years ago

    Years ago, the foreign car makers Mostly the Japanese) were advancing due to the known quality of their vehicles.It was feared they would dominate the market, so Unions and auto makers pressured law makers to put tariffs on imports. The Japanese car makers solved that problem by making cars here, which helped by giving locals jobs.

    American car makers are building out of country because labor is dirt cheap. Mexican workers are not paid 30-40 dollars per hour, plus they work VERY hard as jobs are in short supply there. (They work twice as hard for less than half the money)

  • 5 years ago

    It all has to do with Washington D.C. The U.S. Government realized that they weren't reaping the benefits of taxes on income from labor and threatened to levy high tariffs on automobiles that were manufactured abroad. Plus, it affected the foreign deficit or, "Balance of Trade" (more money going to other countries). Thus, the foreign car companies established factories here in the U.S.

    The cost of labor for domestic (U.S. made) cars wasn't quite the 'bugaboo' that caused the U.S. factories to move to other countries. It's just that labor was cheaper in foreign countries.

  • 5 years ago

    Hi the issue goes back to the issue of gas guzzling cars produced on the home market. yes the majority of american gas waste gasoline and cost the owner a fortune in fuel. the european cars tend to give better value for money to. hence whey so many young go getting kids want BMW's.

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  • Anonymous
    5 years ago

    If an opportunity to compete arises they take it. The UK has many Asian companies employing British workers. It's win win all round.

  • 5 years ago

    "Why do... car companies come to the US to make cars"

    Both American and foreign companies do that, in order to have lower shipping costs.

    "Why do... car companies go outside of the US to make [cars]"

    Both American and foreign companies do that, in order to have lower manufacturing costs, and lower tax rates.

  • bo
    Lv 7
    5 years ago

    because this country is *** backwards

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