FCA announce's Ram Heavy Duty Truck production will moved to Warren,Mich.

[spoon059]

You're right, it did get a little off topic. Sorry for my help in that part. Its great news that Ram is bringing 2,500 jobs home, its great news that Ram is still going to utilize and employ 4,000 employees in Mexico. I'm assuming 2010 is the next generation of the Ram, since they are re-tooling everything anyways. Can't wait to see what they offer in the redesign!

 

[KPear]

The reality is that with while the corporate tax rate was 35%, the effective rate was about 22% taxes based upon rebates and loopholes. I hope this link works, https://www.treasury.gov/resource-c...ocuments/Average-Effective-Tax-Rates-2016.pdf .Trumps new tax regulations just clean up a lot of the rebates and loopholes, but don't really lower too many corporate tax bills. In fact, it is possible that with some of the rebates and loopholes disappearing, some corporations will be paying substantially more taxes as a result

Currently, pickups and vans produced outside the US are subject to a 25% import tariff. https://fee.org/articles/chicken-tax-makes-trucks-expensive-and-unavailable/ So... if they made it in the US they are paying a 22% effective rate in the past, or a 22% corporate tax now. If they made in Mexico and imported they pay a 25% import tariff. Granted, corporate taxes and import tariff's aren't equal in what they tax. I don't have access to the numbers to be able to tell you exactly how much money is obtained from one tax as opposed to the other tariff. Based upon what I know, it is relatively close. Then when you consider local communities giving additional tax breaks and subsidies to entice job development to the area, those differences get smaller and smaller.

Your argument is reliant on assumptions. You're assuming that the effective tax rate of 22% (which was an average taken across many different industries and companies within those industries) was enjoyed by all companies, including FCA. That assumption is not correct, as an average has data points above and below it in value. You're also assuming that state and local communities gave incentives to companies which compensated for the lower tax rates found overseas, though you provide no math to back your claim up.

The fact is many companies did not enjoy an effective corporate tax rate of 22% prior to the recent tax overhaul. And many companies were more than willing to move manufacturing overseas, even if it meant incurring a 25% import tariff, because of the cheap labor and tax advantages they enjoyed overseas. They may have to deal with a 25% import tariff to get 'American' vehicles back across the border from Mexico into the US, but the taxable capital they have in Mexico was, and probably still is, taxed at a far lower rate than what it is taxed at here. Lowering and streamlining the corporate tax structure here in America, certainly goes a long way towards motivating US companies to keep or bring new jobs back into our country.

There is a reason that Kia, VW, Toyota and Honda manufacture vehicles in the US. They were able to structure deals that lowered their overall tax and cost basis enough to make it worthwhile to manufacture in the United States and pay higher salaries and more benefits to American employees. There is also a reason that Ram manufactured the HD pickup line in Mexico. They determined that it was more cost effective for them to build in Mexico and avoid paying American manufacturing workers. Clearly something changed that led them to move back to the United States. Its doubtful that Trumps new tax plan was the impetus, because there is a lot of planning involved before making that decision.

KIA, VW and Toyota have a huge market in North America. Having at least some manufacturing centers in this country definitely makes some fiscal sense, regardless of the tax structure since it optimizes logistics.

Let's review some of the recent market news:
- Walmart is giving raises to its employees and adding more workers.
- FCA is moving its HD truck manufacturing back to the US.
- Toyota and Mazda announce a joint manufacturing plant in Alabama.
- Lockheed Martin recently announced a plan to add more workers to one of its Texas plants.

You really think all of these recent job announcements (which are only a portion of those that have been made recently) have nothing to do with the recent tax overhaul? If so, that's a really convenient coincidence for your argument. I know a lot of people look to avoid giving this President any credit; he probably assumes more credit than he really deserves, but his tax policy is spot on and is already paying dividends towards this nation's economy.

The jobs issue aside, a lower corporate tax rate also provides an incentive for companies to reinvest their capital in its American infrastructure and markets rather than safeguard it overseas.

Also, I'd much rather see HD 'American' trucks be made in America, both for the sake of added jobs and hopefully better quality control.

 

[spoon059]

Your argument is reliant on assumptions.

As is yours. Neither of us know the effective tax rate of FCA. Also, I tended to overall agree with you. If you read my statements, I wrote

There is also a reason that Ram manufactured the HD pickup line in Mexico. They determined that it was more cost effective for them to build in Mexico and avoid paying American manufacturing workers. Clearly something changed that led them to move back to the United States.

I stand by the statement that I doubt FCA had the time to make the decision, find a location, arrange for employees, arrange for use for the Mexican plant, etc etc in the month since Trump announced the new tax laws.

It is far easier to decide to add workers or increase salaries based upon lower tax rates than it is to pick up and move an entire manufacturing line and redesign a vehicle. Perhaps FCA had been doing the numbers and knew EXACTLY what the cost basis would be, already had a tentative contract for a new plant, already had a plan for new employees and already had a plan to use the existing Mexican plant... and when Trumps tax plan was announced they realized that the plan would save them enough money to implement the move. But like I said... kinda doubt it.

 

[PKnight]

Its a shame for Saltillo, they build a quality product down there. On the other hand, its good that we are able to employ more American's here. I'm not one of those people that gave a darn where a vehicle is made, so long as it is made well. The fact of the matter is that all these large manufacturing companies get huge tax incentives for building in the States, so the argument of tax dollars is pretty much a wash. No matter where they are made, sales tax is collected at point of sale, so the argument of tax dollars is a wash again. No matter where they are made, if they are sold in the US then these companies are paying payroll taxes, SSI/Medicare, employees are paying income tax, etc. All these companies are public traded "for profit" entities, so profits don't directly benefit our country unless you own stock in them.

The fact of the matter is that some companies, like GM and Chrysler, took bailout money to stay profitable, while other companies, like Toyota and Honda, didn't take any US tax dollars to stay profitable. Its hard to argue that $20 billion in bailout is somehow better for the country than Toyota and Honda owning manufacturing plants in the US, employee US assembly workers and all the other related taxes.

Anyhow, I guess that means that the Gen 5 Ram likely won't hit the HD market until this plant comes on line.

This is a great move by Chrysler! Altho I have to say they will have a hard time in Michigan matching the high quality build that my 97 Ram received in Saltillo. After 20+ years I'm still amazed at the quality of fit, finish, paint and overall quality. PK

 

[KPear]

I stand by the statement that I doubt FCA had the time to make the decision, find a location, arrange for employees, arrange for use for the Mexican plant, etc etc in the month since Trump announced the new tax laws.

It is far easier to decide to add workers or increase salaries based upon lower tax rates than it is to pick up and move an entire manufacturing line and redesign a vehicle. Perhaps FCA had been doing the numbers and knew EXACTLY what the cost basis would be, already had a tentative contract for a new plant, already had a plan for new employees and already had a plan to use the existing Mexican plant... and when Trumps tax plan was announced they realized that the plan would save them enough money to implement the move. But like I said... kinda doubt it.

FCA may have been planning a move well in advance of the recent tax cuts, though that's another assumption on your part.
However, a streamlined and reduced corporate tax cut surely factors into that type of decision. Even it it wasn't the sole motivating factor behind FCA's move, it was without a doubt a policy change which reinforced their decision.

Same for all the other companies which recently made a decision to add jobs in their state-side locations. Oddly enough, I haven't seen you address all the other companies that are making moves which are similar to FCA's. You could argue that all of those companies had already planned those changes in advance as well, though that comes across as oddly coincidental. Regardless of the timing for all of these recent corporate decisions, the point you were making was that the recent Trump tax cuts had no effect whatsoever on jobs in America. My point is that such policy does in fact encourage job growth and corporate reinvestment. Even if you want to take that study at face value, the previous "effective" corporate tax rate of 22% was not enjoyed by all; now it is.

 

[photowrite]

I have two fourth generation trucks, and like them both. They are too new to gauge long term quality, but if the quality is equal or better, I'd prefer if they were made in the USA.

Happy news!

 

[spoon059]

FCA may have been planning a move well in advance of the recent tax cuts, though that's another assumption on your part.
However, a streamlined and reduced corporate tax cut surely factors into that type of decision. Even it it wasn't the sole motivating factor behind FCA's move, it was without a doubt a policy change which reinforced their decision.

Same for all the other companies which recently made a decision to add jobs in their state-side locations. Oddly enough, I haven't seen you address all the other companies that are making moves which are similar to FCA's. You could argue that all of those companies had already planned those changes in advance as well, though that comes across as oddly coincidental. Regardless of the timing for all of these recent corporate decisions, the point you were making was that the recent Trump tax cuts had no effect whatsoever on jobs in America. My point is that such policy does in fact encourage job growth and corporate reinvestment. Even if you want to take that study at face value, the previous "effective" corporate tax rate of 22% was not enjoyed by all; now it is.

Dude, what is your deal? You are making assumptions, just as I am making assumptions. I wasn't aware I needed YOUR permission to verbalize my assumptions. By the way, you just completely agreed with my "assumption" when you wrote that even if it wasn't the solve motivating factor it was a change which reinforced their decision.

Nowhere did I once write that "recent Trump tax cuts had no effect whatsoever on jobs in America". If I wrote that, please give me a link to it. I simply stated that I highly doubted such an involved, in depth, expensive and consequential move was implemented in less than the couple weeks since the tax cut was announced.

For the record, none of the other examples you provided involved shutting down a production plant in another country and moving ALL production back to the US. You are comparing apples and micro-processors in your example.

 

[KPear]

Dude, what is your deal? You are making assumptions, just as I am making assumptions. I wasn't aware I needed YOUR permission to verbalize my assumptions.

I'm giving my opinion on a topic and you're giving yours...neither of us need each other's permission to do that.

By the way, you just completely agreed with my "assumption" when you wrote that even if it wasn't the solve motivating factor it was a change which reinforced their decision.

I didn't agree with your assumption; I stated that even if your assumption (that FCA had planned the jobs movement prior to the announcement of tax cuts) was correct, which is a big "if," a decrease in corporate tax rates certainly reinforces such a decision. Tax policy factors heavily into corporate strategy, as do many other things. I see no point in getting bogged down in semantics over that.

Nowhere did I once write that "recent Trump tax cuts had no effect whatsoever on jobs in America". If I wrote that, please give me a link to it.

I may have paraphrased, but you did state pretty clearly that you thought the tax reduction was a "wash:"

The fact of the matter is that all these large manufacturing companies get huge tax incentives for building in the States, so the argument of tax dollars is pretty much a wash. No matter where they are made, sales tax is collected at point of sale, so the argument of tax dollars is a wash again. No matter where they are made, if they are sold in the US then these companies are paying payroll taxes, SSI/Medicare, employees are paying income tax, etc.

I thought I drew the appropriate inference from that statement, but please correct me if I was wrong.

For the record, none of the other examples you provided involved shutting down a production plant in another country and moving ALL production back to the US. You are comparing apples and micro-processors in your example.

Whether or not jobs are being transferred from another country is besides the point. The fact is more than a few companies are adding jobs, giving bonuses, and/or reinvesting their capital into their American infrastructure. I can't say with 100% certainty that all of those recent decisions were made solely because of the recent tax overhaul (and nor can you be anymore credible in stating the opposite). But I don't think it's a stretch at all to assume that US tax rates do, at some level, factor into such corporate decisions.

 

[spoon059]

I'm giving my opinion on a topic and you're giving yours...neither of us need each other's permission to do that.

Just curious why you are attacking my assumption, but perfectly happy to believe yours. That's all. No matter, I'm done discussing the matter with you. I've said my piece, you've said yours. Good talk. Stay safe. Pence 2020.

 

[m37]

"while other companies, like Toyota and Honda, didn't take any US tax dollars to stay profitable."

Dare we mention FORD, or is that the name we shall not speak?


I would be cautious about buying a first year vehicle after the move, just to see if the high quality remains.

 

[diesel DOG]

People working here paying taxes support this country and it's military. Now I'll buy one made in USA. Japan had closed it's markets to USA products as well have paid to defend them for decades. F them.

 

[KPear]

Just curious why you are attacking my assumption, but perfectly happy to believe yours.

Because my main "assumption" is validated by recent events. Companies are creating more jobs and bringing more overseas capital back into America due in part to the new tax policy.

Apple just announced its intent to bring $245 Billion of its overseas capital back into America and create 20k new jobs: http://www.latimes.com/business/la-fi-apple-repatriation-20180117-story.html In Apple's case, the CEO literally stated that the lowered tax rate was a major reason for this decision.

Other companies have recently made similar announcements. We can nitpick over how much of a role the new tax policy plays in such decisions, but it is beyond debate that the tax policy does in fact play a role.

 

[spoon059]

I'm done discussing the matter with you. I've said my piece, you've said yours. Good talk. Stay safe.

To refresh your memory...

 

[Paul Markowski]

It is really great to see yet another example of companies moving BACK to the USA from overseas....Apple is now bringing $$$ back to he US and will be hiring another 20,000 Americans in the near future.

 

[Tuesdak]

Anyone watch how badly some Congressmen treated The Big Three during the bailout hearings in The Great Depression v2.0? Most of those asshats are no longer in office. There is one "Wrong Answer" the GM CEO, good riddance to him as well, gave to the "Is GM paying any taxes?" question during these hearings. I argue the answer of "No" that was given was incorrect. Look at your paychecks a second. "Medicare Tax", "Social Security Tax", "Federal Income Tax", "State Tax"... Yeah GM payroll pays these taxes out of employees paychecks. So although GM Corporate "profits" technically wasn't paying taxes there sure was a lot of taxes GM was sending to government. Never mind Sales taxes on sales of vehicles.

So even if a company pays zero taxes on their income the taxes employees pay are a tax revenue source.
I remind everyone that other 'foreign' car makers were propped up by their governments. Cash For Clunkers propped up all automakers on the taxpayer's dime instead of just ours. #@$%! Don't even get started on Obama giving Chrysler away to Fiat.

As far as Trump's tax plan "suddenly" moving jobs here or doing things... That's a nice distraction our ignorant and biased MSM News Media gets spoon fed from Twitter. Trump has been in office for over a year. He was already motivating corporations before he was even sworn into office. IMO the announcement itself is late as it's probably been in the works awhile.

 

[Busa Dave]

Well this is not good as far as I am concerned. Best trucks I ever owned were built down there. Oh well may go back to GM gassers.

 

[Cummins12V98]

400k or so on each of these St Louis built 98 12v's I had owned, awesome quality trucks!!!

 

[dfb]

Thank God for Donald Trump! You Go Guy!!

 

[diesel DOG]

At my age I have one more new truck left to buy not sure what but it will be made in the USA.. Dodge is back in the running but two years is a long way off especially when you're driving a 2001 since new. LOL