JAPAN AND GERMANY GAÌNÌNG WORLDWÌDE MONOPOLY CONTROL OF AUTOMOBÌLE

ÌNDUSTRY



The North American Ìnternational Auto Show in Detroit last year looked far different than past auto shows.
The GM display was minus GM brands Hummer, Pontiac and Saturn, brands that GM discontinued after it
filed for bankruptcy earlier this year. GM is currently in talks to possibly sell the GM owned Swedish
automaker Saab to Dutch luxury car maker Spyker Cars. Chrysler, is now showing Fiat cars in the
Chrysler lineup, a result of the tie up between Chrysler Corporation and Fiat after Chrysler Corporation
filed for bankruptcy earlier this year. And Ford owned Volvo, was sold last month to a holding company
based in China, Zhejiang Geely Holding Group. The loss of Volvo from Ford Motor Co. also meant the
loss of U.S. truck manufacturer Mack Trucks, which was purchased by AB Volvo in 2001. The sale of
Volvo followed the sale of Ford owned British Land Rover and Jaguar to Ìndian automaker Tata Motors in
2008.
While two U.S. automakers were driven into bankruptcy in the past year, two countries' auto companies
are expanding and thriving, and at the direct expense of U.S. automakers. Japanese and German
automakers are displaying more automotive brands and more models. These brands and models are in
direct competition with U.S. automaker's brands and have served to drive them into bankruptcy.
What was seen at the North American Ìnternational Auto Show in Detroit is indicative of something else,
the monopoly status that Japanese and German automakers are gaining worldwide at the expanse of all
other country's auto companies.
Japan now has eight automobile companies; Toyota, Honda, Nissan, Subaru, Mitsubishi, Mazda, Suzuki
and Ìsuzu. Germany has five; Volkswagen, Audi, Daimler Benz, BMW and Porsche. The Japanese and
German national automakers are all headquartered in their nations, and they have controlling interest and
production in their nations. No Japanese and German automakers have been sold to other countries, nor
have their governments allowed it.
While Japan and Germany have not allowed their automobile firms to be sold or taken over by other
countries, they are working to either gain control of other nations' automakers in the world or drive them
out of business. Unlike the Japanese and German automakers, very few countries now have complete
national control of their auto companies, and many of them have been either driven out of business or
have been taken over by foreign automakers.
Ìn the case of Germany, and very like what the government of Germany is doing in working to gain control
of other country's national airlines, Germany has taken over numerous other countries auto and truck
companies, particularly in Europe and the United States. Ìn Europe, Germany's BMW took over British
Cooper Mini. Volkswagen took over British Rolls Royce, British Bentley Motors, Lamborghini, Bugatti,
Spanish SEAT, Czech SKODA and the Swedish truck manufacturer, Scania. Ìn the case of the United
States, Daimler Benz has taken over U.S. truck manufacturer Freightliner and Chrysler Corporation.
The actions that Daimler Benz took involving U.S. auto manufacturer Chrysler Corporation led directly to
it's bankruptcy and is illustrative of a pattern seen with both German and Japanese automakers to all
apparent working together under the direction of their governments jointly.
Daimler Benz and Chrysler merged in 1998, in what was described as a "merger of equals¨ by both
parties. Chrysler Corporation at that time had amassed a great deal of cash, which during the flush years
of the 1990's was intended to be used as a cushion for Chrysler during down economic times of the
cyclical automotive industry. Daimler Benz Chairman Juergen Schrempp described it as a "Perfect fit of
two market leaders for future global growth.¨
However, to all apparent, Daimler Benz intended it neither to be a "merger of equals¨ nor for the merger
to be a "fit for future global growth¨. Daimler Benz executives lied about their intent of the merger being a
"merger of equals¨ and as soon as the merger was done, started working to take over full control of
Chrysler. Although the governing structure of the company was supposed to be dual, with headquarters in
both Stuttgart and Auburn Hills, Michigan, with a binational decisionmaking body and structure of rotating
corporate leaders from both companies to determine corporate policy for both, what occurred instead was
a stealth move by Daimler Benz to wrest control from the Chrysler executives, including all
decisionmaking about Chrysler Corporation. Employees at Chrysler described a process where the
Chrysler executives who were supposed to be making decisions about Chrysler had their decisionmaking
cut out from under them by Daimler Benz executives in Stuttgart.
At the time of the takeover, Chrysler had reported it's second best year in history the year earlier, in 1997,
with an operating profit of $4.7 billion. Daimler Benz in 1997 reported an operating profit of $2.4 billion.
Although it was termed a "merger of equals¨, Chrysler was the larger company, having sold 2,886,981
vehicles in 1997 compared to Daimler Benz unit sales of 1,232,000 vehicles. Given size and profit, if one
of the companies was taking over the other it should have been Chrysler taking over Daimler Benz.
Soon after Daimler Benz took over Chrysler in the "merger of equals¨, Daimler Chrysler used a large
portion of Chrysler's profits and savings, that were being kept for and needed for the cyclical auto
downturn and gave it to direct competitor Mitsubishi Motors, purchasing 33% of Mitsubishi Motors in
2000. Later that year both Moody's and Standard and Poors downgraded Daimler Chrysler's credit rating,
due to it's insufficient cushion of cash, that had been appropriated and given to Mitsubishi Motors. The
downgraded credit rating made it more difficult for Chrysler to borrow money, making it less possible to
survive the cyclical auto downturn.
Chrysler is not the only foreign company that Daimler Benz has taken over and gutted. Daimler Benz took
over the Dutch airplane maker, Fokker, and has since put it out of business.
Once Daimler Benz had control of Chrysler, it began treating the separate company Chrysler as it's own,
stripping it's assets. A Chrysler plant in Alabama was appropriated and given by Daimler Benz to the
German electronics giant, Siemens.
When Chrysler Corporation went through the merger of equals, it was a publicly owned and traded U.S.
company. With the merger it became a dual nation publicly owned and traded corporation, listed on both
the U.S. and German stock exchanges. Ìn 2007, Daimler Benz, with no legal rights to do so, sold an 80%
share in Chrysler Corporation to private equity firm, Cereberus. Chrysler was dissolved as a corporation
with no vote or say so by the shareholding owners of the corporation. Ìnstead of shares in the U.S.
corporation, Chrysler, Chrysler shareholders had the U.S. corporation Chrysler dissolved out from under
them and were given some Daimler Benz stock in compensation instead, an illegal move that the real
owners of Chrysler Corporation, the shareholders, had not been allowed to vote on. By the time that
Chrysler had been offloaded to a private equity firm, in a move being seen increasingly with U.S.
companies, it had been economically gutted by Daimler Benz. Chrysler which had seen it's second best
year for profits the year that Daimler Benz took it over, entered bankruptcy protection in 2009, while
Daimler Benz had an excellent year economically.
Both German and Japanese corporations have a history of using alliances, joint ownership, joint ventures
and other economic tie ups and agreements with other countries' companies, as a means of targeting
these companies economically.
Daimler Benz used it's merger with Chrysler to put into place policies that weakened, and served to hurt
Chrysler, with a diversion of funds from Chrysler that served to benefit only German companies and
Japanese ones.
Two other examples of co-ownership of Japanese and foreign automakers that have served to benefit the
Japanese automakers and detriment the other country's automakers, is the "merger of equals¨ that
Nissan Motors has with Renault. Just as cash from Chrysler was used by Daimler Benz to prop up an
ailing Mitsubishi Motors, cash from Renault has been used to prop up an ailing Nissan Motors. Ìn the
recent period of U.S. government support for struggling automakers, Nissan Motors requested that the
U.S. government support Nissan Motors economically. The request from Nissan Motors did not include a
request from it's partner, Renault.
Ìn the case of Mazda, Ford Motor had a 33% ownership of Mazda Motors, similar to the ownership stake
of Daimler Chrysler in Mitsubishi Motors. To free up cash, Ford has recently reduced it's ownership stake
in Mazda Motors to 11%. The co-ownership of Ford and Mazda has been used to prop up Mazda Motors,
and to allow Mazda to use it's joint venture with Ford in countries such as China where the relationship
has benefitted Mazda in China with co-produced Ford/Mazda auto production with China's Chongquing
Changan Automobile Co.
Mazda joined Ford's care making venture with Changan in 2006, which now makes Mazda 2 and Mazda
3 compact cars as well as Ford vehicles and Volvo S40 and S80 models. Ford helped fund Mazda
production in China as a partner. Ford has funded design and production of the Mazda vehicles in China
and production of the Mazda vehicles in Japan.
On Monday, January 18th, both Ford and Mazda responded to a report by Japan's Nikkei business daily
which said that they and China's Congquing Changan Automobile Co had agreed to end their three way
tie up by 2012. This would benefit Mazda, which has used Ford to gain entry into other countries, helping
to underwrite Mazda expansion plans and production in other countries. Both companies have denied the
report.
This pattern of forming agreements, partnerships and joint ventures between Japanese and German
companies and other countries' firms, which is then used to fund Japanese and German companies, is
also being seen in other industries. At the present time, Japan Air Lines is in discussion with Delta
Airlines and other U.S. and other nation's airlines, for Delta and other carriers to pump funds into now
bankrupt Japan Air Lines, as has been occurring in the automobile industry.
The tie ups between other countries auto companies, have left few stand alone national auto companies
outside of Japan and Germany. Currently, there are discussions to deepen the ties between Mitsubishi
Motors and France's Puegeot.
Japanese and German companies have also taken over production of other countries' companies in other
countries. Japanese automakers have taken over GM auto production in Australia. Ìn Germany, there has
been criticism of GM and the United State retaining control of the GM European arm, Opel. Although Opel
is the GM arm in Europe and not a German company, and has production and sales throughout Europe,
what has been seen is troubling rhetoric from German government sources that indicate that they regard
Opel as theirs. Ìt is also evident that they do not want Opel as part of a U.S. owned General Motors,
stating that they were "angry¨ that GM had not sold it's European branch, Opel to a foreign private equity
firm. This raises disturbing questions as to why German government officials don't want the U.S. auto
company GM which owns Opel, to retain control of their European division. Ìt also raises troubling overall
questions as to the goals and motives of German government officials in regard to working to pressure
U.S. auto companies to give up national control of their automotive production and markets.
There is long evidence that the governments of Japan and Germany have been targeting the U.S. auto
industry and world auto industry, to destroy other country's companies and gain monopoly control of
automotive production themselves. Their actions have mirrored and supplemented each other in trade in
a wide variety of sectors, including steel, shipbuilding, semiconductors, machine tools, electronics and
banking. What has been seen since the end of World War Two is an apparent targeting of other nation's
companies and industries, using first GATT, now the WTO trade agreements to assure that other
country's markets were open to their products and capital, while Japan and German have kept their
markets closed to other country's products and capital. While they have pushed and pressured other
countries to keep their markets open to ruinous flows of goods and capital which is now occurring in the
United States, both Japan and Germany have worked to assure that they control and limit the capital and
goods that are allowed into their countries. This is in violation with the GATT and WTO agreements that
Japan and Germany have signed in which they agreed to open their nations to the free flow of goods,
services, and capital that World Trade Agreements have called for and that other countries, after signing
on, have abided by, and Japan and Germany have deliberately not. Ìt appears that the goal for the trade
agreements and the use of, first the GATT agreements, and then it's successor, the WTO agreements,
was to assure for Japan and Germany that other countries remained open to ruinous flows of other
country's goods and capitals, which have served to destroy other countries, while Japan and Germany
have kept their nations closed, and in violation of the agreements that they have signed through GATT
and the WTO. Japan and Germany while also pressuring other countries to open their national
companies up for foreign ownership and control, including control and ownership by them, have not
allowed foreign companies to gain controlling financial interest in Japanese and German companies.
While the German government is pressuring and criticizing GM for not selling the GM European arm,
Opel, to a foreign company, Germany, as well as Japan have not allowed their national companies,
particularly in critical sectors, to be taken over or controlling majority owned interest gained by foreign
countries' companies.
Ìn terms of automobile production, what has been seen with Japan and Germany is coincident joint
targeting. This joint targeting targeted specifically the small car market in the 1960's and 1970's; the
midsize car market in the 1980s and 1990s; and specifically targeting the last remaining stronghold of
U.S. auto manufacturing dominance, SUVs, vans, and trucks starting in the late 1990s.
The pattern that Japan and Germany have used is massive joint en masse importation starting with small
cars in the early to mid 1960's. Japan imported five small car models all at once in the mid 1960's serving
to displace the U.S. small car market at the same time as Germany's Volkswagen Beetle, sold mass
numbers of cars in the U.S. By the end of the 1970's, Japan and Germany had gained control of the U.S.
small car market. Ìn the 1980's and 1990's, Japan and Germany jointly targeted the mid size and luxury
car market in the United States, also making large inroads into that specific sector. Starting in the late
1990's, both Japan and Germany ramped up massive production of new models of Japanese and
German automotive SUV's, vans and trucks, all at once, both at the same time, to displace U.S.
production in the last remaining U.S. auto stronghold and to attack other countries's auto companies
overall. At a time when due to high oil prices, the market for large vehicles in the U.S. and elsewhere was
dropping, and all the companies were losing money, Japan and Germany automakers continued massive
increased in production of large vehicles in this period to weaken and target U.S. and other country's
automakers.
The Japanese and German automakers have been able to do this due to government subsidization by
the Japanese and German governments to compensate Japanese and German auto companies financial
losses and increase production. The ramping up of Japanese and German large vehicle production
starting in the late 1990's, resulted in overcapacity of vehicles on the world market, with all companies
losing money and Japanese and German companies being shielded from the loss by the subsidization of
their national governments. The losses caused by the overcapacity that the massive increase in
Japanese and German production caused in a short period of time, has served to damage and in the
case of GM and Chrysler, bankrupt other country's auto companies.
Financing overcapacity to drive other country's companies out of business, is a pattern that Japan and
Germany have been using for decades in a wide variety of industries and sectors. From shipbuilding and
steel in the 1950's, to autos, semiconductors, machine tools, electronics and a wide variety of other
industries and economic sectors since, Japan and Germany have used the same types of economic
policies to hurt other country's companies.
Another pattern that has been used to benefit Japan and Germany while detrimenting other countries is
Japan keeping it's domestic market almost fully closed to foreign industrial or high tech imports. This
allows the Japanese government to raise prices in Japan with no competition from foreign competitors,
while using the profits gained from the protected high prices of Japanese goods to underwrite lower below
cost prices in other countries, and the dumping of products. Japan's protected domestic market also
allows for the health of a number of different Japanese companies to flourish, all backed by the Japanese
government which are then used to flood other countries with overcapacity, and take over the market of
other countries with Germany, while putting other nation's companies out of business.
Ìn the case of automobiles, while Japan has a number of Japanese auto plants in the U.S. and a number
of automobile supply companies, Japan has allowed no U.S. automakers or auto suppliers to build plants
in Japan to service the Japanese market. As well, in total violation of first GATT then WTO agreements
that Japan signed, Japan has not allowed U.S. autos to be imported into Japan except in miniscule
numbers.
The economic trouble that the U.S. automakers find themselves in are not as a result of poor overall auto
sales due to the economy. Ìt is due to a large increase in imports, particularly of Japanese vehicles into
the U.S. in the last ten years. Ìn 1996, Japan imported 1,098,505 vehicles into the United States. Ìn 2007,
Japan imported 2,215,451 vehicles into the United States, more than double what they had imported a
decade earlier. As well, Japanese auto production plants in Vietnam, Mexico, Thailand and other
countries also increased importation into the United States. While Japan massively increased it's auto
imports into the United States in the last decade, they have restricted the importation of U.S. automobiles
into Japan since the end of World War Two. Ìn 2006, Japan allowed only 17,889 U.S. auto company
vehicles to be imported into Japan.
These unfair trade and economic policies have led to increasing Japanese and German monopoly control
in the worldwide auto market, and leads to the question of why the U.S. and other countries should allow
Japan and Germany to trade unfairly and not abide by the international trade agreements that they have
signed with GATT and WTO which has served to benefit them and hurt other countries.
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