In a speech given to an Economic Club of Chicago luncheon held in conjunction with the Chicago Auto Show media preview, Ford Motor Company's president for the Americas Joe Hinrichs criticized Japan and Toyota in particular for benefiting from currency manipulation. Hinrichs said Ford would "urge Congress to oppose a TPP [Trans-Pacific Partnership currently being negotiated.] if it does not include strong currency disciplines."
"When Toyota came out and said half their profits are due to currency change of the yen, that's a big deal. They said that," Hinrichs said to reporters after the speech. "When [Toyota President] Akio [Toyoda] came out in support of [Japanese Prime Minister Shinzo] Abe saying we need a weaker currency, that's a corporate policy statement."
"Toyota and [Renault Nissan Chairman Carlos] Ghosn said we need a weaker currency and the currency got weaker," said Hinrichs, who has become Ford's public faced on trade issues.. "Morgan Stanley estimated that the recent fall in the yen puts roughly $2,000 per export vehicle into the pockets of Japan's three biggest automakers."
"Of course every country has a right to conduct sound monetary policy," Hinrichs said. "That includes legitimate strategies like quantitative easing. But direct currency intervention cannot be tolerated in the 21st Century."
The yen has lost almost a quarter of its value against the U.S. dollar over the past year. Toyota estimates that for every yen of value the Japanese currency loses against the U.S. dollar its operating profit goes up by 35 billion yen.
Toyota's official position is that to minimize exposure from currency swings the company localizes production. Seventy percent of the cars that Toyota and its subsidiary brands sell in the U.S. are made in North America.
Bob Carter, senior vice president of automotive operations at Toyota Motor Sales U.S.A., said at the Chicago Auto Show tthat Toyota doesn't depend on currency fluctuations to make a profit.
"We don't run our business on currency," Carter told reporters.
In response to Hinrichs' assertion, a Toyota spokesperson referred to comments made last summer by the then Fed chairman, Ben Bernanke.
Japan is "not manipulating their exchange rate, they are not directly trying to set their exchange rate at a given level," then-Fed Chairman Ben Bernanke told a House Financial Services Committee in July 2013. "What they are doing is engaging in strong domestic monetary policy measures, trying to break the deflation they've had for about 15 years, and a side effect of that is that the yen has weakened."
from The Truth About Cars http://ift.tt/Jh8LjA
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