Give American auto manufacturers a break by giving a $3,000 tax credit to US consumers for purchasing American manufactured cars. Most people are not willing to switch their favorite brands without the right incentives. US can attract foreign manufacturers to build their cars here, if more people buy cars that are manufactured in the United States instead of overseas. More than half of all Toyota’s that are sold in the United States are manufactured right here in the US. Toyota realized the big movement in the United States in the 80’s towards buying products that are manufactured in the United States. Other car makers followed suit including BMW, Honda, Hyundai, Mazda, Nissan, Mercedes and Subaru. But most of their cars are still manufactured overseas.
There are 640,000 active members in the UAW throughout the United States, Canada and Mexico. In 2007 approximately 70,000 UAW workers lost their jobs in the United States. These jobs are very high paying jobs with generous pension plans and health benefits. An average UAW worker makes $26 an hour, with benefits and contributions to pension plans that average is $65 per hour. In 2008 the total job cuts is expected about 100,000, by the end of the year. In November 2008, GM had a 45 percent drop in sales , Ford’s sales dropped 30 percent and Chrysler sales dropped 36 percent compared to last year. If this trend continues, the big three will be forced to go out of business. In 2007 GM posted a loss of $38.7 billion, Ford posted a loss of $2.7 billion and Chrysler posted losses of 2.92 billion. While Toyota recorded record profits near $14 billion.
American automakers need more money to save themselves from bankruptcy. They need people to actually buy the cars that they produce. US taxpayers are shelling out $700 billion dollars to salvage the financial sector and hundreds of billions still pending. With the uncertaintity of the economy, almost every industry is struggling to stay alive. Some parts of Michigan that use to survive from the auto makers now look like ghost towns. To help the auto industry and the people that rely on manufacturing, Governor Jennifer Granholm of Michigan went to Washington to ask for higher tariffs on foreign imports. If we put higher tariffs on imports, there is going to be an international crisis with trade embargos. The average tariff on most import cars is two and one-half percent. Increasing tariffs will create a bigger problem than a solution even though United States made about eight times the amount from tariffs on imported shoes than from imported cars
American auto makers are the most productive workers in the world. We can create more jobs in the US by helping ourselves without trade embargoes .The best idea to help ourselves would be to give a $3000 tax credit to consumers for purchasing new cars that are manufactured in the United States. The credit should include every auto maker that builds a plant in the US and manufactures their car here, even if the auto maker is based overseas. The labor cost for every car that is manufactured in the United States is roughly $1400. The benefits are not just for the people that work directly in the manufacturing plant but it will include the people that build the plants, workers that maintain the plan, the administrative needs of the plant, and all the other local businesses that will benefit from the economic resources that will be spent in the area. Here is an example of the economic benefits from a family of four with two employees in the UAW and two children compared to collecting unemployment.
Average income for two adults working in the UAW.
Federal income Tax collected after standard deductions and two exemptions for two workers.
Unemployment compensation for two at $364 a week for 26 weeks.
Federal Income Tax collection from benefits after standard deduction and exemptions.
Average tariff collected on $20,000 import car
There are approximately four million cars that are imported into the United States. Just imagine how many jobs that we can add or retain by manufacturing the cars right here in our own backyard. We have the technology and the people that can make it happen. Instead of bailing out the industry, let’s give the consumers incentives to buy American made cars. Manufacturing is the backbone of the American economy; we cannot afford to ship these jobs overseas. This country became great because of our great manufacturing tradition. We must preserve our manufacturing jobs, to get our economy strong again.
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