The auto industry is in trouble right now, but many car companies are betting on sales jumping soon. Production is being cut by just about every automaker, but several foreign companies are adding new factories. Most automakers’ sales were down more than 30% compared with last November. But after every storm there’s a rainbow, and new factories in anticipation of an upturn in the market.
Toyota and Honda both opened new facilities recently. Honda’s opened last month and Toyota opened theirs this month. Hyundai is building a new Kia plant in West Point, Ga. that will open next year.
According to USA Today, Toyota has a no-layoff policy similar to the “Job Bank” that the Big Three’s UAW workers enjoy. When the plants stop production, Toyota’s workers are paid to receive training or perform maintenance.
There might be something to the Detroit Big Three’s argument for bridge loans. Foreign automakers are obviously betting that the market will spring back up.