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Old 07-09-2005, 10:41 AM   #1
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Toyota Chooses Canada over US

Interesting article about Toyota's decision to construct a plant in Ontario rather than the US to build the RAV-4.

Though "several American states" were willing to provide more than double the subsidies ($125 million Canadian) offered by Ontario, Toyota concluded that training and health care costs for American workers were so high compared to the workforce available in Canada that the subsidies would have been used up training and insuring the American workforce.

"The level of the workforce in general is so high that the training program you need for people, even for people who have not worked in a Toyota plant before, is minimal compared to what you have to go through in the southeastern United States," said Gerry Fedchun, president of the Automotive Parts Manufacturers' Association..."

"He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment. "The educational level and the skill level of the people down there is so much lower than it is in Ontario," Fedchun said."


"In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson."


All in all, it suggests that a strategy of shorting public education and placing the burden for health care on employers can't be balanced by fat tax subsidies to draw investment.


http://www.cbc.ca/cp/business/050630/b0630102.html
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Old 07-09-2005, 11:00 AM   #2
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RAV-4, eh?

That car fits Canada pretty well now. They can have it.
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Old 07-09-2005, 11:14 AM   #3
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Originally Posted by Speed-ER doc
RAV-4, eh?

That car fits Canada pretty well now. They can have it.
It's just the beginning :D

"The educational level and the skill level of the people down there is so much lower than it is in Ontario"

yup, that about sums it up eh there eh :p
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Old 07-09-2005, 11:48 AM   #4
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Originally Posted by Speed-ER doc
RAV-4, eh?

That car fits Canada pretty well now. They can have it.
That's right, Doc. As long as emergency medical services can't be outsourced, you'll be satisfied, right?
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Old 07-09-2005, 11:59 AM   #5
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Having an illiterate workforce is horrible. It is difficult to pin down the blame conclusively (school, money, students, parrents)

"All in all, it suggests that a strategy of shorting public education and placing the burden for health care on employers can't be balanced by fat tax subsidies to draw investment."

Now you are getting oppionated (as expected this is the lounge no less). I don't think anyone shorted public education at least not as a matter of policy in recent years. I would guess the education level in Mississippi and Alabama have been about the same for 200 years.

The health care costs are tricky thing to get into as well. They are higher than the US for a variety of reasons:

1. The US worker expects more benefits and since the average worker in the US is often less fit (mainly weight related) they are more often likely to use those benefits.

2. Legal healthcare malpractice in the US is much higher than it is in Canada. The insurance that doctors pay in the US trickles down to the medical costs one way or another.

3. Canadians are unwilling to pay anything less than essentially rock bottom wholesale prices for prescription medication. US meds in Canada are thus cheaper. That sounds good on paper, but what it really means is the rest of the world is paying for the development cost of the medication. They are freeloading in this regard. Now the drug companies could stop selling to the Canadian freeloaders but that would be considered heartless and cruel.

All in all I would hardly consider the problems a "stategy" as if it was some sort of design by the politicians and the powers that be. The problems are more complicated than that and they are US-wide or have been around for hundreds of years in the case of the poor education.

-Mr. Wigggles
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Old 07-09-2005, 12:12 PM   #6
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3. Canadians are unwilling to pay anything less than essentially rock bottom wholesale prices for prescription medication. US meds in Canada are thus cheaper. That sounds good on paper, but what it really means is the rest of the world is paying for the development cost of the medication. They are freeloading in this regard. Now the drug companies could stop selling to the Canadian freeloaders but that would be considered heartless and cruel.
If Canadians are paying "rock bottom wholesale prices" for their medicines, than what is the rest of the world paying for when they pay even less? The actual cost to produce medicine is incredibly cheap, so while the margin on medicine is Canada is certainly less there is still a lot of profit there, just not as much.

Americans aren't solely paying a lot to subsidize the development of new medicines. We're paying for more because of all the damn lawsuits that we bring against the companies. If you're almost certainly going to cost a company $X Billion in so many years they've got to make that back before the inevitable lawsuits show up.
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Old 07-09-2005, 12:44 PM   #7
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They could have built it around here in South Carolina. I think the workforce here is qualified. There's a Michelin Development center here, as well as the BMW plant that makes Z4s, X5s, X3s, and I believe Z8s. There is a huge automotive research center going up as well, so this area seems to have done pretty well in terms of car manufacture.
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Old 07-09-2005, 12:51 PM   #8
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"begins singing Blame Canada"

Cue South Park
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Old 07-09-2005, 01:32 PM   #9
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Originally Posted by MrWigggles
Now you are getting oppionated (as expected this is the lounge no less).
isnt your reply mostly opinion as well?

state/show your references to fact

Quote:
3. Canadians are unwilling to pay anything less than essentially rock bottom wholesale prices for prescription medication. US meds in Canada are thus cheaper. That sounds good on paper, but what it really means is the rest of the world is paying for the development cost of the medication. They are freeloading in this regard. Now the drug companies could stop selling to the Canadian freeloaders but that would be considered heartless and cruel.
again, more opinion.

the Canadian medical system doesnt allow for as much greed to inflate the costs as the american system does. in Canada, ALL people are treated fairly and equally in regards to health care, regardless of whether you have no income, or you have the highest income in the country. the american system does not (that i know of). of course, this means that we do have to reduce costs in whichever way we can, but still, i would much rather take our system over yours.

development of meds are not funded by the government (at least not completely). any company developing a new drug is doing on their own funds (sometimes with government subsidies, but not often). our standards are also much higher, and regulations much stricter when it comes to medications. so its easier for these meds to be developped by companies in other countries, as then they can profit from them before trying to have it allowed to be used in Canada. drugs go on sale in the states far before they are even regulated here. this allows companies to make profit from them before us "freeloaders" start putting in mass orders (which still allows the greedy american companies to make a profit)
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Old 07-09-2005, 01:44 PM   #10
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If Canadians are paying "rock bottom wholesale prices" for their medicines, than what is the rest of the world paying for when they pay even less? The actual cost to produce medicine is incredibly cheap, so while the margin on medicine is Canada is certainly less there is still a lot of profit there, just not as much.

Americans aren't solely paying a lot to subsidize the development of new medicines. We're paying for more because of all the damn lawsuits that we bring against the companies. If you're almost certainly going to cost a company $X Billion in so many years they've got to make that back before the inevitable lawsuits show up.
Making medicine is like any other business in the freemarket. Dare I use the C-word, capitalism? If every country took Canada's position of essentially only paying for the cost to produce the medication and not for the RESEARCH it takes find/create/test the medicine, the medicine would not exist in the first place.

The advance biologic medications today take years to research and test. Most of them fail in the trial process. As a drug company, you can't make money knowing that for the few drugs that make it through testing aren't going to bring in enough money for the drugs that fail testing.

Yes, I already mentioned the overly litigous voracious civil legal system in the US. But I am convinced that is only a small percent of cost of running a drug company. By the time the FDA approves a drug, it has weeded out the vast majority of the harmful medications. There are exceptions, Vioxx et al., that bring headlines, but those are rare cases.

-Mr. Wigggles

Ps. the drugs were only 1 of my 3 points about additional healthcare costs in the US. I am not at ready to sing Blame Canada.
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Old 07-09-2005, 01:59 PM   #11
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Quote:
Originally Posted by Frostee
isnt your reply mostly opinion as well?

state/show your references to fact
You are not disputing my facts only their interpretation.

Quote:
again, more opinion.

the Canadian medical system doesnt allow for as much greed to inflate the costs as the american system does. in Canada, ALL people are treated fairly and equally in regards to health care, regardless of whether you have no income, or you have the highest income in the country. the american system does not (that i know of). of course, this means that we do have to reduce costs in whichever way we can, but still, i would much rather take our system over yours.

development of meds are not funded by the government (at least not completely). any company developing a new drug is doing on their own funds (sometimes with government subsidies, but not often). our standards are also much higher, and regulations much stricter when it comes to medications. so its easier for these meds to be developped by companies in other countries, as then they can profit from them before trying to have it allowed to be used in Canada. drugs go on sale in the states far before they are even regulated here. this allows companies to make profit from them before us "freeloaders" start putting in mass orders (which still allows the greedy american companies to make a profit)
If you own any stocks, 401Ks (or Candian equivalent), bonds etc, you are a part of the "greed". Its called running a business in the free market. Get over it.

Try walking into McDonald's with a bunch of your friends and demanding that they sell you a large fries for only the cost it takes to create them (fries cost about $.10 to make). I believe the would say, "Take off hoser!". Now, come back a few weeks later dying in desperate need of food and they might just sell it to you for that price because they feel sorry for you.

This is the case of the drug companies in the US. If it weren't for the fact that people do need these medications, we'd be saying: "Take off hoser!" as well. I guarantee if it were DVD's and the Canadians said we want them for the cost produce them (less than a dollar), they would stand no chance of getting the price they want.

-Mr. Wigggles

Ps. Boy, I struck a tender spot with this one. No one seems to be arguing with my Anti-American points 1 and 2 only my Anti-Canadian point 3.

Last edited by MrWigggles; 07-09-2005 at 02:03 PM.
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Old 07-09-2005, 02:03 PM   #12
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Making medicine is like any other business in the freemarket. Dare I use the C-word, capitalism?
Capitalism is charging what the market will bear -- precisely why we pay more here. We're willing to do so. The Canadian government is not.

Corporations don't feel 'guilty'. They don't sell to the Canadians out of some moral desire to 'do good'. They do it because it makes them money.

Quote:
If every country took Canada's position of essentially only paying for the cost to produce the medication and not for the RESEARCH it takes find/create/test the medicine, the medicine would not exist in the first place.
You missed where I asked about everyone else in the world.

If Canada is paying cost (or "essentially" paying cost) for their medicine how is it that much of the rest of the world gets it even less than they do -- often many times less? Do you really think all these companies have such massive goodwill as to sell to the rest of the world at incredible losses?

Drugs only cost pennies to produce. Canadian drugs aren't that cheap. There is still significant margin there. Will it take longer to break-even? Yes. But not absurdly long. Not so much longer they wouldn't put the money into it for research.

Researching drugs is an expensive process. There's no doubt. But Pfizer, which spends more on research than any other drug company, spends twice as much money every year on Marketing that it does on Research. Maybe if everytime I went to the Doctor he didn't give me a grocery sack full of "free" samples, they could cut their marketing budget and save some money. I say "Free" because, one way or another, I pay for the 'free samples' and then some.

I'm not paying lots of money on pills to pay for new drugs. I paying lots of money to pay for new ads, an army of salesmen, and free samples. Things that you don't often see in Canada and certainly not elsewhere in the world. That's what I'm 'subsidizing' in addition to everyone else's lawsuits.
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Old 07-09-2005, 02:06 PM   #13
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Sigma,

If the drugs are so much cheaper in the rest of the world, why are Americans reimporting drugs from Canada and not Germany etc?

-Mr. Wigggles
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Old 07-09-2005, 02:12 PM   #14
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One more thing,

Let me change my number 3. from:

"3. Drugs are cheaper in Canada because they are freeloading."

to

"3. Drugs are cheaper in Canada because American's are too stupid to pay the reduced prices that Canadian's pay."

Everyone happy?

-Mr. Wigggles
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Old 07-09-2005, 02:37 PM   #15
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Sigma,

If the drugs are so much cheaper in the rest of the world, why are Americans reimporting drugs from Canada and not Germany etc?

-Mr. Wigggles
Germany isn't a good example because they are 'suffering' from the same thing the US is -- massive imports from neighboring nations like Greece and Italy. Although drugs in Germany are still cheaper than in Canada.

But, if I has to answer why Canada and not places like Greece, I'd probably guess that Accessibility and lack of Knowledge perhaps. I'd also imagine it's much more difficult to get them through Customs and certainly more expensive to bring them from Europe than just going across the border to Canada.
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Old 07-09-2005, 02:54 PM   #16
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Old 07-09-2005, 02:59 PM   #17
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The reason: Healthcare.
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Old 07-09-2005, 03:02 PM   #18
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The reason for what? why drugs are cheaper or why toyota came to canada? If you're insinuating the latter, I think there is more to it.
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Old 07-09-2005, 03:02 PM   #19
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Guess I shouldve read the article first. Oh well.
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Old 07-09-2005, 03:06 PM   #20
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Originally Posted by MrWigggles
2. Legal healthcare malpractice in the US is much higher than it is in Canada. The insurance that doctors pay in the US trickles down to the medical costs one way or another.


-Mr. Wigggles

I can agree with most of what you said but that. I have posted the facts about that before in other threads...the truth is that this is propaganda spread by the insurance industry.

As to the rest...NJ has good public ed, but I have heard horror storys about other states. No child left behind seems to mean no child can move forward
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Old 07-09-2005, 03:26 PM   #21
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What do you call American with PhD in astrophysics and master's degree in brain surgery?

STUPID AMERICAN

Ahahahahahahahahahahhahahahahahahahahahahahahahaha hahaha
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Old 07-09-2005, 05:48 PM   #22
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Originally Posted by MrWigggles
...

The health care costs are tricky thing to get into as well. They are higher than the US for a variety of reasons:

...
2. Legal healthcare malpractice in the US is much higher than it is in Canada. The insurance that doctors pay in the US trickles down to the medical costs one way or another.
(Sigh) Once again, malpractice insurance and so-called defensive medicine have never, ever been shown to be a significant factor in the cost of US healthcare. The CBO (Congressional Budget Office) estimates that such costs constitute less than 1% of the total cost of health care in the US. Nor are increases in such costs an important component of the growth in health care costs.

Bottom line is the health care costs in the US are the highest in the world because the administrative costs of our health care (about 15%) is 50% to 60% higher than any other nation.


Quote:
Originally Posted by MrWigggles
3. Canadians are unwilling to pay anything less than essentially rock bottom wholesale prices for prescription medication. US meds in Canada are thus cheaper. That sounds good on paper, but what it really means is the rest of the world is paying for the development cost of the medication. They are freeloading in this regard. Now the drug companies could stop selling to the Canadian freeloaders but that would be considered heartless and cruel.
The claim that drug prices in the US are higher than the rest of the world because only Americans pay for R&D is nonsense. Likewise, the notion that drug prices are high because of R&D is nonsense. In fact, almost every pharmaceutical company spends significantly more marketing their drugs than on research and development. And the profit margins of pharmaceutical companies are the highest of any single industry in the world.

http://www.actupny.org/reports/durban-licensing.html
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Old 07-09-2005, 05:57 PM   #23
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(Sigh) Once again, malpractice insurance and so-called defensive medicine have never, ever been shown to be a significant factor in the cost of US healthcare. The CBO (Congressional Budget Office) estimates that such costs constitute less than 1% of the total cost of health care in the US. Nor are increases in such costs an important component of the growth in health care costs.

Bottom line is the health care costs in the US are the highest in the world because the administrative costs of our health care (about 15%) is 50% to 60% higher than any other nation.


The claim that drug prices in the US are higher than the rest of the world because only Americans pay for R&D is nonsense. Likewise, the notion that drug prices are high because of R&D is nonsense. In fact, almost every pharmaceutical company spends significantly more marketing their drugs than on research and development. And the profit margins of pharmaceutical companies are the highest of any single industry in the world.

http://www.actupny.org/reports/durban-licensing.html
Yup, "Big" Pharma doesn't begin to describe it. It's closer to leviathan. And the competition (some might call it "hatred") between the pharma companies is intense, which may in part explain the huge amounts they devote to marketing. It leads to some interesting situations at the office, where we've represented some of the biggest players.
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Old 07-09-2005, 06:02 PM   #24
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They could have built it around here in South Carolina. I think the workforce here is qualified. There's a Michelin Development center here, as well as the BMW plant that makes Z4s, X5s, X3s, and I believe Z8s. There is a huge automotive research center going up as well, so this area seems to have done pretty well in terms of car manufacture.
Actually South Carolina was one of the sites that lost out to Ontario for the reasons cited in the article.

http://www.thestate.com/mld/thestate...s/11447767.htm
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Old 07-09-2005, 06:34 PM   #25
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Actually South Carolina was one of the sites that lost out to Ontario for the reasons cited in the article.

http://www.thestate.com/mld/thestate...s/11447767.htm
Well Aiken is a little ways from Spartanburg, a couple hours. Maybe just the upstate is educated, or maybe all the educated people are already employed around here by the other car/car product companies.
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Old 07-09-2005, 06:34 PM
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