How Can GM Compete?

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The cars Lansing workers assemble go on sale with thousands in extra costs most foreign competitors aren't paying.

You've probably heard about some of them-- like additional costs in health care and retirement.

But this one, perhaps, you haven't.

General Motors economist Tom Walton claims the Japanese government is effectively paying between $4,000 and $7,500 of every car imported into the U.S. because of what he calls currency manipulation.

That is to say, the Japanese government is not allowing the yen to properly respond to the global market.

"Our competitors have all that money to put into research and development and advertising that we don't have," said Joe Sproles, director of government relations for General Motors. "So it's a competitive disadvantage for us and for Michigan."

That's largely a federal issue, but there are concerns the automaker would like Michigan to address -- like the personal property tax on business.

"You're taxing a machine that creates a job," Sproles said.

And other states where GM does business don't have such a tax, meaning Michigan could lose out on new plants. Some lawmakers agree.

"We've got to find a way to address that," State Sen. Jason Allen (R-Traverse City) said.

Gov. Jennifer Granholm's budget plan calls for "relief" from the commercial-industrial personal property tax.

At the same time, some of the problems the automakers are encountering might require additional taxes to help fix.

"Health care: $1,500 a car is a big cost for us and we've got to reduce those costs," Sproles said.

More taxes could reduce those costs if the governor succeeds in pushing universal health care for Michigan.

Canada has such a plan and GM has plants there, but so far, the automakers haven't come out with a strong opinion on whether a plan like that would help them compete.

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