US products sold overseas

General Discussion
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1

I saw a couple of articles two days ago that I thought you’d be interested in. One says that the US exported 430,000 more barrels of gasoline in September than we imported. Much of the oil used to manufacture the gas is likely imported, but our refineries make more than we use at home.

The other article said that Toyota will export Camrys from the Georgetown, KY plant to South Korea. Initially, about 6000 cars per year will be shipped. I bet there are a lot more sold there than 6000 each year, that it’s a start.

Any comments?

2

This is a case of a story lacking in details so it makes it sound bad. Where was the gasoline exported to? If it went to Canada or Mexico, that would make sense if they do not have as many refineries as we do.

You also need to understand that a barrel of oil makes a lot of high profit products for the oil industry and that gasoline is actually a hazardous waste product. They need to sell it, even at a loss, in order to make a profit on the whole barrel of oil. If opening the Canadian/Mexican market to this hazardous waste allows them to take less of a loss on a gallon of gas, I would expect them to do that.

3

The other article said that Toyota will export Camrys from the Georgetown, KY plant to South Korea. Initially, about 6000 cars per year will be shipped. I bet there are a lot more sold there than 6000 each year, that it’s a start.

Glad to hear this…but it probably has something to do with the down-sized manufacturing capabilities in Japan after the tsunami.

4

It’s a start…but the sad truth is that so many of our products can’t be bought by our own middle class. You would think that being the biggest consumer nation in the world, our own population could support our industries. Because we can’t, it puts in a precarious position of depending upon others for our production. That would be fine in a stable global market…worrisome now.

As far as exporting gasoline is concerned, you and I really don’t have a clue why refineries are poducing surpluses. The profit strategies of oil companies is theirs to figure out, not ours and Keith’s ideas make as much sense to me as any. It certainly wouldn’t benefit them to keep it in surplus at home and drive the retail price down here.

5

Japanese Have Cars Built In The U.S. And Send The Bottom Line Profits To Japan And The Cars To Korea . . . Interesting.
CSA

6

Is it your contention that Toyota doesn’t pay corporate profits taxes on the vehicles they sell from KY? Or that they pay no realty taxes? And that their employees pay no income taxes? And that their trucks don’t pay over-the-road taxes? Is it your contention that the thuosands of employees they employ don’t spend most of their income in the United States? Or have bought houses here? Or pay state taxes (whether income or sales)?

Hmmmm…how DO they do this?

7

No, Of Course That’s Not My Contention, But Understand That They Are In Business On This Side Of The Ocean Not To Create Jobs For U.S. Workers Or Contribute Tax Dollars, But Rather To Ulimately Make A Profit For The Japanese Headquarters On The Other Side Of The Ocean.
CSA

8

We’ve had these half-baked comments before without detailed figures to back them up.

The US imports over 50% of the crude oil it uses. From that, It refines products from both imported and domestic crude. Currently, the US has excess refinig capacity and has been closing old refineries. Mexico has a continuing shortage of cash to build new refing capacity, mostly because its state oil company is milked dry by the government, leaving little money for capacity aditions and modernization.

So, crude exported from Mexico may partially find its way back as “gasolino” for Mexico’s rapidly growing car fleet.

Likewise, Canada exports large amounts of crude oil (the largest supplier to the US), but it also has a shortage of modern refining capacity. Eastern Canada, as well as the Eastern US import qite a bit of gasoline from Europe, which has large, modern refineries. Canada and the US have many pipeline connections and the Mid West can either import or export refined products depending on need.

Building a new refinery in the NE US in nigh impossible because of the NIMBY syndrome. That
is why Koch has refineries in the Virgin Islands entirely dedicated to export to the US.

Gasoline IS NOT A HAZARDOUS WASTE! It is the most valuable product to come out of a barrel and is no more toxic that diesel, jet fuel, bunker, and the rest. A barrel of crude may produce 35-45% gasoline and the rest all other products.

With respect to Japanese carmakers exporting to non US markets, that’s to be expected. The US production costs are now lower than in Japan. And quality is about the same. Honda built some special Civic coupes in Canada for export to Japan, since the demand there was low and the Canadian quality was as good as the Japanese.

There is nothing sinister about this. US designed vehicles are often produced in other countries, depending on cost and quality the two main drivers. The Chevy Cruse was designed by Opel with help from US owned Daewoo in Korea. The new Chevy Spark is a complete Daewoo design, modified for US roads and emissions.

9

Personally, CSA, I don’t care why they’re here. They’re creating thousands of good jobs, paying taxes, contributing to the economy in a positive way, and even selling me a good product. And they’re even staying profitable and not feeding at the public dollar trough! I have no qualms whatsoever with Toyota building cars here as long as they provide positive flow INTO the tax coffers and the communities rather than drawing dollars FROM these entities to their own offices.

10

I bet a large part of the gasoline exported results from the mandated ethanol use. That’s what happens when 50% of our corn crop gets used for fuel…

11

The 3 countries mentioned as buyers were Mexico, Brazil, and Chile.

I haven’t seen the Spark. Docnick, did you mean the Sonic? I know that it was designed in Korea and is built in the US.

420,000 barrels in September is about 0.15% of the total manufactured in the US during that period. Not much of the total refined, and I didn’t expect that it was. I was surprised that there were any gasoline exports at all.

12

It’s 420,000 bbls per day, so that’s about 5%

13

I reread the article. texases. You are correct. Even better!

14

Jt; The Sonic is a Korean/German engineered car. The Spark, coming to you late 2012, is a Daewoo mini car (on the Asian market for a long time) to round out GMs new fleet of small cars to meet the CAFE standards. The Spark will be built in Korea, since no US plant can make money building this size car.

GM has globilized its design as follows: trucks, USA; large rear drive cars, Australia; small cars, Opel (Germany) and Daewoo Korea, midsize and larger front drive,USA.

15

No simple answers anymore in the era of globalization. Lots of different things at play here.

A little off topic but related is that I heard Nissan is opening a plant in Kentucky and had something like 5000 applicants for the something like 1400 jobs. The kicker is the jobs average $12.50 an hour. Kind of hard to jump start the economy on wages like that.

16

Good and interesting point, jtsanders – an article which has that information was in the Wall Street Journal from this week. This was apparently the first time in over 60 years the US has exported energy (however they define that!).

Some comments on globalization – A corporation or refining company sort of resembles a complex, independent country, but one that is interested in providing a profitable product customers want (or can be convinced that they want). Profits don’t go back to “Japan” or “the US,” but to the shareholders, investors, and the company, if there is indeed any profit at all after expense, market conditions, and taxes (if you look at the info on the gas pumps, the government almost certainly makes more on a gallon of gas than the company does). Corporations have plenty of legal obligations to existing workers and tax collectors, but when they are planning new facilities, it often just makes sense for the corporations to put those facilities wherever in the world they will probably be best treated – and the consumer usually benefits from this, too (but, alas, not the worker or the tax collector). After all, if the US made all the components and cars at home, you can imagine how much a car would cost, and how much stagnation there would be (look at the '70’s).

Gasoline a “hazardous waste?” That sounds at least half right.

17

The article i read said the gasoline export is due to; reduced demand from economy here, improved fuel efficiency and ethanol displacement, higher prices in growing demand countries and lack of refinery infrastructure elsewhere. They like to keep the plant running and maximize prices…

18

It’s amazing…people COMPLAIN about Toyota creating jobs here in the US…yet they have no problems with GM MOVING jobs to China.

19

In 1970 one dollar would buy 360Y. Today one dollar will buy less than 80Y. That change in the relative value of the currencies makes for a great deal of repositioning of manufacturing assets.

20

“It’s amazing…people COMPLAIN about Toyota creating jobs here in the US…yet they have no problems with GM MOVING jobs to China.”

I’m sure people complain about both and extoll both. I guess it just depends on your frame of reference.

“In 1970 one dollar would buy 360Y. Today one dollar will buy less than 80Y. That change in the relative value of the currencies makes for a great deal of repositioning of manufacturing assets.”

And that’s a good thing for the US worker in that they should have more job opportunities. And it’s a bad thing with respect to buying power. OTOH, the opposite is true when considering less developed countries.

Docnick, thanks for the explanation. I learned something, and that makes this a good day.