A funny thing happened on the way to dollar devaluation -- America, apparently, has become a source of cheap labor. at least in currency exchange-rate terms.
According to a report from Thursday's Wall Street Journal, Japan's Nissan (NASDAQ:NSANY) plant in Canton, Miss., will begin producing Quest minivans for export to -- get this -- China. Ha! And Nissan isn't even the first Japanese automaker to be producing cheap goods in the new Third World, for export abroad. Toyota (NYSE:TM) and Honda (NYSE:HMC) are playing this game as well, producing thousands of cars in the U.S. for export to Europe, every year.
The Japanese majors -- as well as minor players like Mitsubishi (OTC BB: MMTOF) and Fuji Heavy Industries' (OTC BB: FUJHF) Subaru, both of which also expect to export from the United States -- cite various rationales for their actions. First, there's the low value of the dollar in recent months, which makes vehicles a bit more economical to produce here than used to be the case. Then there's the general belief that, after years of seeing GM (NYSE:GM), Ford (NYSE:F), and DaimlerChrysler (NYSE:DCX) practically give their cars away, the near future may be a tough time to move product in the States. Better to produce some cars here and keep the plants up and running, the Japanese investors figure, than let them sit idle. And finally, there's the practical consideration that some Japanese models -- such as the Quest -- aren't even built in Japan. To sell them in China, you need to ship them from where they are built. Here.
All of this makes it harder and harder to remain a dyed-in-the-wool jingoist. I mean, do we want foreign companies to produce all their stuff abroad and export it to us? Or do we want them to buy and build assets in the United States, employ American workers, and buy auto parts here for local assembly? It seems like only last week that we were complaining about the former, yesterday about the latter, and sometime around breakfast this morning about U.S. companies sending U.S. jobs offshore. Now it's the job-stealing foreigners who are saving the day by hiring Americans to produce cars here, for sale elsewhere?
It's getting to where a Fool has to wonder whether it's even possible to "buy American" anymore. Perhaps -- just perhaps -- we should abandon the increasingly fictional notion that it can be done and just buy whoever makes the best stuff for the best price, for the sake of ourselves and our portfolios.
Fool contributor Rich Smith owns no shares of any company mentioned in this article.
