Nissan's Lessons for Today's Jobs

A blog about business and economics.
Aug. 5 2012 4:37 PM

Lessons From Transplant Car Companies: Expect Unexpected Consequences

An interesting NYT piece by Bill Vlasic, Hiroko Tabuchi, and Charles Duhigg asks if there are lessons to be learned from the efforts that got Japanese car companies to shift some of their manufacturing to the United States for the contemporary world of electronics.

I would say that one of the primary lessons is that we ought to expect unexpected consequences. The rise of "transplant" production facilities in the United States is in part a consequence of protectionist moves in the 1980s. One of the main things the proponents of those moves were hoping to accomplish was to bolster the position of the Big Three out of the Detroit and the union jobs they supported. But that effort failed. Foreign car companies started building cars in the American south, away from Detroit, away from the United Auto Workers, and away from the existing auto parts supply chain. What's more, the political economy didn't play out in a totally predictable way. When the American car companies needed a government bailout during the 2008 economic crisis, the fiercest political opposition came from politicians who represent states with a lot of Japanese car construction.


A related issue is that America is really big. If you live in Boca Raton or Boston or Billings it's not totally clear to me that having a car made in Tennessee rather than Tokyo is a meaningful benefit. Lots of countries are much smaller than the United States and when they conduct industrial policy it's more like what would be regional development policy in the United States.

But having waxed skeptically about manufacturing-promotion many times, let me say that when I got to the part of the article where Larry Summers and Tim Geithner are blasé about currency policy vis-à-vis China, I don't understand where they're coming from. Having an inappropriately strong dollar amidst mass unemployment has been folly. In his remarks quoted in the piece Summers seems to assimilate all currency policy concerns as "protectionist" but that's not right. America needs to be pursuing monetary policies that are consistent with full employment, which given present circumstances means a cheaper dollar and more employment in exporting and import-competing industries. You don't need to believe in magic manufacturing pixie dust to see the merits of this.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Even When They Go to College, the Poor Sometimes Stay Poor

Republicans Want the Government to Listen to the American Public on Ebola. That’s a Horrible Idea.

The Most Ingenious Teaching Device Ever Invented

Tom Hanks Has a Short Story in the New Yorker. It’s Not Good.

Brow Beat

Marvel’s Civil War Is a Far-Right Paranoid Fantasy

It’s also a mess. Can the movies do better?

Space: The Next Generation

An All-Female Mission to Mars

As a NASA guinea pig, I verified that women would be cheaper to launch than men.

Watching Netflix in Bed. Hanging Bananas. Is There Anything These Hooks Can’t Solve?

The Procedural Rule That Could Prevent Gay Marriage From Reaching SCOTUS Again

Oct. 20 2014 6:17 PM An Up-Close Look at the U.S.–Mexico Border
  News & Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
Brow Beat
Oct. 20 2014 6:32 PM Taylor Swift’s Pro-Gay “Welcome to New York” Takes Her Further Than Ever From Nashville 
Future Tense
Oct. 20 2014 4:59 PM Canadian Town Cancels Outdoor Halloween Because Polar Bears
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.