Bengt Halvorson's thesis for Newsweek/MSNBC/Forbes is a predictable, plodding piece of work. The dietribe [sic] makes a stab at exploring the muddy waters surrounding domestic vs. transplant "issue." "For instance, the Chevrolet Equinox, which is assembled in Ontario, has an engine made in China and a transmission from Japan, which brings its domestic content down to 55 percent. The Chrysler PT Cruiser is assembled in Mexico, has a Mexican-made engine and only 37 percent domestic content. Yet the Japanese-branded Toyota Sienna minivan, with a West Virginia-built engine and transmission, and a final assembly in Indiana, boasts 85 percent domestic content." Rather than negotiate a sensible path through this maze– screw it, it's a global economy, buy some Toyota shares, get over it– Halvorson's propagates the propaganda perpetuated by the "Level Field Institute." [This pro-domestic lobby group, run by United Auto Workers retirees, rightly points out that The Big 2.8 account for more U.S. jobs than transplants so that you'll consider rewarding their incompetence by buying a Korean-built Chevrolet Aveo.] Halvorson's "don't buy anything but Motown product" summary [as above] arrives in the third paragraph. His list of acceptable American cars are all made by GM, Ford and Chrysler. Well, it's supposed to. The embedded link to the "10 Most Patriotic Vehicles" takes you straight to the Honda DX Civic Sedan, one of the ten "Least Expensive Vehicles to Own." Funny, that.
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Stories in the lame-stream media like this one are not only an embarrassment, but a wet-fish-in-the-face insult to readers.
i will buy what appeals to me. detroit does not have anything appealing to me (or for anyone in my opinion), so my business will be elsewhere.
until detroit can deliver, it shall continue to be pummelled.
The author is 100% right. All you have to do is go to the midwest or other manufacturing areas of the country – or should I say what used to be our manufacturing areas. The Great Lakes region has been economically devastated.
“Arsenal of Democracy” is now located in Mexico, China, Vietnam, etc., but we do have the world’s greatest finance industry.
Uh, wait a minute on that….
But the domestic companies are closing most of their plants in North America, and the vehicles that are still made in NA by domestics suck. If I had to buy a car made in North America right now, it’d probably be a Honda Civic, built in Ontario or Ohio.
If you want to buy an American assembled and manufactured vehicle, it’s really simple. All new vehicles have a sticker on them listing the country of origin for the major components as well as the country of manufacture and the domestic parts content. Of course, by domestic it means North American, not necessarily USA, so maybe it’s not so simple…
Having read the article, it seems well written and balanced. Not a dietribe in my opinion. It points out the difficulties of determining content, and it also points out how a transplant like the Toyota Sienna can have a high domestic content (approx 70%). It also gives room for comments from opposing opinions. A good article overall. I guess that is why it is in Newsweek and Forbes.
The link to “most patriotic cars” is wierd tho, since it sends you to cars least expensive to own.
I know we live in a global economy, but I think this Bengt Halvorson has (some sort of) a point.
Whatever I buy, I ALWAYS try to buy a product which is made (in my case) in the UK or, at the very least, made by a UK company (i.e Vodafone, Unilever, Reckitt Benckiser, GSK etc)*.
Likewise, with cars, my next 2 choices (if oil decides to come down and the economy picks up) will be either a Toyota Auris or a Jaguar X-Type. Both of which are built in the UK and support a lot of UK jobs (i.e UK steel is sold to Jaguar to make their cars).
If more people did this, their country’s trade deficit would decrease, but that’s more of a side issue.
It’s also more environmentally friendly, since parts and/or a car don’t have to be shipped halfway across the world.
I’ve seen on other threads about how people are complaining that manufacturing jobs are being lost out of the United States or the UK. But then in the next thread, we’ll say “it’s a global economy and we’ll buy what we want to.”
This is where Detroit were royally boned. They did have factories in the United States and people told them to “stop playing the patriotism card”. So, when people stopped buying their products, they shifted jobs to lower cost countries (presumably to save money) and then they were stung by people saying “Call themselves an ‘American company’? They’re exporting jobs! Not like (insert name of foreign manufacturer). They’re building their cars in the United States!”
I believe in a free economy, but I also believe in helping my fellow workers keep their jobs…..
* = If it is up to quality, which most British products are…..believe it or not……
Juniper : The link to “most patriotic cars” is wierd tho, since it sends you to cars least expensive to own.
Yup, and I’d like to see that top 10 list.
More than likely, that 90s Cougar in the picture is more American in terms of stylistic design, component engineering and manufacturing.
If the big 2.8 would just put out something of decent quality in the sub $15k range with 30-35mpg mixed and a nice 5 speed auto, I might consider them, interior be damned.
What are my choices with the above criteria today? I have a 2000 dodge neon with broken mirror pivots that IMHO are not worth fixing, and a broken center console clip to keep it closed, but outside of that, it is flawless. Unfortunately, models that exist today don’t get enough better mileage for me to consider them until this thing is ALOT closer to death.
YOU are the economy !
Well, not the entire economy.
But it’s composed of people (and corporations, governments…)
YOU are a people.
Buy (or don’t buy, as needed) what helps YOU and you have done the most good for that part of the economy you’re best placed to understand.
The author is correct. I also find that all three American automakers produce vehicles that I would buy right now and generally have, thought I should say I’m not the type of person who will every purchase a four cylinder car new. I like my V8s, always have, always will.
Funny that when the discussion of American four cylinder cars come up GM’s recent and decent entries are often not mentioned – the Solstice, Sky, HHR and Cobalt SS. All of which are four cylinder cars and designed to be four cylinder cars, all of which offer unique styling that stands out from your standard Asian four cylinder appliance. I realize the roadsters aren’t the most practical designs, but then again neither is a smart car. The HHR however is quite a handy package and it does seem to be finding plenty of buyers. You can’t throw a rock here without hitting one.
If you want to buy a car “classified” as US built, you need to essentially ignore the brand and manufacturer, and look at the VIN plate in the windshield on the driver’s side. This relates to ALL cars built world-wide since the 1981 model-year.
The first digit or character is the one to look at.
1 and 4 = USA
2 = Canada
S = UK (Katie? that’s for you…)
3 = Mexico
J = Japan
K = South Korea
W = Germany
Z = Italy
You can therefore tell if a new Toyota Corolla was built in Japan (J), the United States (1 or 4) or Canada (2).
My 2008 Prius is built in Japan (J), my wife’s 2007 Hyundai Sonata is built in Alabama (4), our 2007 Clipper pop-up is built in Michigan (4).
You’ll find this VIN standard on cars, trucks, SUVs, motorcycles, medium trucks, vans, heavy trucks, scooters, busses, RVs and trailers, for the main examples.
Then on the new-car data sheet (at least in America) you can see how MUCH of the car was from the actual country of origin.
You’ll be astounded to see that (so-called) ‘mercun cars like the Ford Fusion are manufactured in Mexico, and (so-called) ‘furrin’ stuff like the Toyota Camry are built in Indiana alongside Subaru Legacy cars on a 2nd line, just for a couple of examples.
This is where Detroit were royally boned. They did have factories in the United States and people told them to “stop playing the patriotism card”.
The ‘patriotism card’ to me refers to selling substandard products with bombastic jingoistic advertising, not the location of their assembly plants.
The Big 2.x still use this ‘shut up and salute the flag’ marketing, regardless of whether the product is assembled in the US, Canda, Mexico or Korea. It’s dumb and insulting.
If the vehicle is assembled in the US with mostly domestic parts then isn’t the economy better off? It doesn’t matter if the profit ends up in Japan, Germany or Korea. What should matter is that an American was paid to assemble that car or part and thus has money to spend here in the US.
jar527
Precisely! Of a car price (let’s say £16000), the most profitable car maker (say, Toyota) works at a 10% profit margin. This means that £1600 will go back to Japan and the remaining £14400 will stay in the country, some Americans will have a jobs and the economy’s trade deficit is shorten by a little bit.
I don’t have a problem buying from a foreign manufacturer, but only if they build in the UK.
The profit goes back to Japan and then ends up in the shareholders pockets.
So the best way to boost the economy is to buy Toyota stock so as to capture the manufacturing money and profits for America? Brilliant!
I will say that I find it amusing that people complain about
1. Energy prices,
2. manufacturing leaving the U.S.
3. the downfall of the U.S. Auto Industry
and then
1. Resist Coal, Nuclear, Wind, Ethanol, increased drilling with all of their might, and think that the price of energy is being fairly set by the angels in the commodity markets.
2. Fight free trade with all of their might, when the problem is we have few tarriffs and the world has brick wall tarriffs
3. Refuse to EVER buy an American vehicle because as we know all American vehicles trannies fall out at 60K miles.
The Dichotomy is laughable if it weren’t so sad.
The economy most effected by my individual car purchase is my family’s economy. The car purchase that I make every 5 years is not going to save or destroy any of the major car companies (if I bought a car from a small manufacturer, like Tesla, it may be a different story) or it’s suppliers, and it’s certainly not going to push the US economy in any direction. It could put me in the poor house, though, if I make a bad choice and end up with a lemon. The idea that we, individually, influence the economy is laughable and shouldn’t be considered in the equation.
I’m a little confused I think. On one hand I have nothing against foreign advancement. On another I wanna buy a lot of material goods. Then on my other hand (I know) I have an opportunity for a fellow American. I guess I can do a little bit of everything. Um…I like that. I’ll buy foreign vehicles cause cars matter a lot to me. I already buy local groceries and other things. Um…I’m all set. Thank you.
My father used to have a 1988 Oldsmobile Ciera. On the side front quarter panel was a string of different national flags from around the world. The joke was “that’s where all the parts for this car came from.”
Anybody who thinks GM’s small cars are acceptable has obviously never driven one of the segment-leaders. They’re abyssmal.
I bought a Saturn SL2 in 1992, when the Civic and Corolla were a bit better – because GM made a real effort. That car surpassed “acceptable” and actually was “good”; maybe even “very good”; so I know they can do it. They just don’t _want_ to.
Duh.
No, seriously, how is this news? It’s common sense: if you want to keep your local economy healthy, buy goods that see the bulk of the cost to produce/distribute disseminated in your local community. The important aspect, too, is the costs: the continual chants of “But the profits go back to Japan/Korea/Germany!” are just a red herring; as the profits from an American vehicle don’t really reach your local economy, either–at least not in an easily measurable way. The profits are a razor-thin slice of the overall dollar; the wages paid to workers, dealers and satellite jobs very definitely matter.
The problem, of course, is if you’re like me an live in an area where the products you could buy consist of:
* GM Pickup trucks
* Mid-sized GM crossovers (Suzuki/GM Thetas)
* Large GM cars (Impala, Lacrosse)
* Big (Edge) Ford or bigger (Flex) crossovers
* Huge Ford cars (Grand Marquis)
* Mediocre Toyota compacts (Corolla, Matrix)
* Luxury Toyota SUVs (RX)
* Impractically-packaged Honda compacts (Civic, CSX)
…and you want a practical, fuel-efficient vehicle that’s well packaged. By choosing the least-objectionable option, I get the Toyota Matrix, followed by the Civic and Edge. Damn.
That sucks. It’s just like voting: hold your nose and select the best of the worst.
I wish the Prius, Rondo, Mazda5 or Focus wagon were made in Ontario, but somehow I don’t think that’s going to happen.
powerglide: Buy (or don’t buy, as needed) what helps YOU and you have done the most good for that part of the economy you’re best placed to understand.
Bravo. Consumers do not exist to satisfy industry. Industry exists to satisfy consumers. That is the whole, entire, raison d’etre of an industry.
This is so profoundly obvious and indisputable yet many people cannot understand it.
There is a real, fundamental economic meaning to the fact that US car makers are losing money and burning through their cash. That means they are co-opting scarce, valuable economic resources that are needed elsewhere, and destroying their value, doing their part to leave society poorer than before. That is not a good thing; it’s a bad thing.
Encouraging that behavior is most certainly NOT good for any economy in the long run. Just ask the Soviet Union.
This is not rhetoric. There is great competition for resources like steal and platinum and rubber and oil and energy and capital. The Detroit 3 are grabbing a lot of that stuff, contributing to record prices, yet re-arranging those molecules into a form that in many cases is worth less than the raw materials and energy and labor that went into it. And they’re producing final products that only further exacerbate the oil scarcity problem.
They keep failing to anticipate what delights Americans, by the way, despite the fantastic advantage of being native to the home market.
They figure out how to add value instead of burn it, fine, they’ll be rewarded without any need of hortatory about why people should buy something they don’t want based on a false protectionist argument.
Alex, your points are well taken.
Personally, I think:
1. Our nation has had since 1973 to seriously put together a national energy policy, and private industry has failed to do so (in a true free market enterprise system, this would have been the collective responsibility of those in business) and the elected “leadership” in Washington has failed to do so (in a central control political system, this would have been their responsibility – much as the old Soviet Union used to have “5 year plans”)
2. Manufacturing IS leaving the US, but it is also moving INTO the US. Look at Hyundai, now Kia, Toyota, Nissan, Subaru, just in the auto industry. As for tariffs, if We The People of the United States and our elected representative servants (that’s what they are SUPPOSED to be since the power of the nation is supposed to rest with the PEOPLE) are SUPPOSED to follow the United States Constitution and actually not pass idiotic laws constantly interfering with people, their livelihood and their freedom to be responsible citizens. Point I’m making is this; if we’d adhered to the US Constitution and only had tariffs and a few Federal Excise Taxes, how much oil would be imported vs. finding energy sources to use within the country itself, putting people to work? How much earlier would the Japanese have built car factories and employed Americans had there been, say, a 35% tariff on imported cars? On the flip side, I’d LOVE to not have ANY sales taxes, property taxes or income taxes, THANKS. How about you?
3. The downfall of the US auto industry was whose fault? So, are you sore the buying public for NOT buying drek from the Detroit 2.8 after being robbed blind with “super-reliable units” such as the
-Chevrolet Vega
-Ford Pinto
-Ultradrive automatic equipped Dodges
-Turbohydramatic 200 equipped GM vehicles (with pressed steel planetary transmission gears – ka BOOM)
-Diesel V8’s by Oldsmobile installed in most GM products
-Piston slap in GM V8’s recently (“no it’s not a diesel….”)
-Exploding head gaskets (after a century of engine building practice) on Fords, Dodge Neons, GM V6’s, ete etc ad nauseum
Thanks, I’ll buy another Hyundai Sonata (built in Montgomery Alabama) before I’ll even consider a Detroit 2.8 car. I may be a slow learner (having given AMC, Chrysler, Ford and GM chance after chance after chance from 1973 to 1997) but once I learn how to avoid going into the torture chamber of Detroit 2.8 ownership, I don’t care HOW much “everyone” says “we’re better now” (how many decades have I heard that litany coming from Detroit?!) – I won’t go back.
Its becoming a broken record, but what about the American corporation’s responsibility? I need to buy american made products manufactured by american corporations or I’m letting the country down? It seems to me that the American companies need to produce products I and others want to buy or they are letting MY country down.
If the vehicle is assembled in the US with mostly domestic parts then isn’t the economy better off? It doesn’t matter if the profit ends up in Japan, Germany or Korea. What should matter is that an American was paid to assemble that car or part and thus has money to spend here in the US.
ABSOLUTELY!
FOR
Forbes: “The best way to boost the economy with your next new-car purchase is to buy a domestic-branded model manufactured in North America with the highest percentage of American-made parts”
READ
“Buy an SUV”.
That’s all that is (“largely”) US built with US built engines by US companies.
Another candidate was the Lincoln Town Car, but that is now going to be built in Canada.
Like the Stupendously Undesireable Vehicles, the Lincoln is a bit porkine and not shy about “slopping” up lots of gasoline….
Badum ching, thank you, I’m here all week….
So, according to Forbes none of the AMERICANS employed in the U.S. by NIssan, Toyota, Honda, Mercedes-Benz, BMW, Subaru, Kia,
VW, Audi, MItsubishi, etc.. don’t need jobs?
According to FORBES transplant workers both blue and white collar workers are less important than domestic workers.
Screw you FORBES!
Yet the Japanese-branded Toyota Sienna minivan, with a West Virginia-built engine and transmission, and a final assembly in Indiana, boasts 85 percent domestic content.
I’d like to meet the Toyota HR miracle worker who managed to staff a successful, non-union plant in West Virginia.
Economists agree that a free market works best when everyone pursues their own interest. Competition for the buyer’s dollar is the engine of progress. Nevertheless, I’ll give a product extra points for sourcing/assembly in North America. Mikey in Ontario and Jose in Hermosillo are our neighbors, and Jack in Ohio or Alabama is our countryman. It’s odd that so many Americans seem to believe that other nations are entitled to be chauvinistic but that we shouldn’t prefer what’s made on this side of the pond.
The argument to buy a US branded vehicle because the “profit accrues to Detroit” is obviously bunk. First, none of the 2.8 are making any profits, so how can they “accrue to Detroit”?
But more so, Toyota, Honda and others are investing in the US. The 2.8 are dis-investing in the US. Any cash you put into GM’s greedy hands seems to either end up in the pockets of the executives or in new factory capacity in China.
People make the where-the-profits-go argument as if it were an obvious truth. It isn’t.
It is the truth John, if people still purchased Ford, GM and Chrysler cars in the numbers they did decades ago there would be enough business for each automaker to continually support the huge number of plants they had running here when they owned the new car market.
Now that people do not buy those cars in those same numbers the automakers cannot afford to support the infrastructure that was there when they were the entire new car market.
The American manufacturers plants die with their falling marketshare, profits evaporatre when nobody buys your cars. On top of that when they do release a great product people will always make some excuse not to buy it and get that Honda or Toyota anyway.
You can afford to invest in new plants when your business is growing, not when it’s dying. There’s a big difference there.
I remember when I was a kid. I had legos. I assembled my legos into the stuff shown on the boxes they came in.
Forgive me if I missed it somewhere in this long string of comments, but why has nobody here asked where the engineering, design, and other WHITE COLLAR jobs go? Who’s actually conceiving these vehicles? Americans? Or Japanese, Koreans and Germans? Does anybody even give a darn about that anymore? Other than me, that is?
I’m all for American (AND Canadian, BTW…) blue collar workers having a place to go where they make a good living right here in the U.S.A. (and Canada…).
But nobody seems to be saying much about where the higher-paying jobs are going — you know, stuff that calls for a college degree and generally promises a higher standard of living?
Yeah. THAT kind of stuff.
Or do we want to become a nation of line workers, who only assemble stuff that “the smart people” actually engineer in other nations?
Yes, when I was young I also assembled legos into creations of my own imagination. But line assembly workers don’t have license to do this, and nor do parts plants that receive their marching orders from other nations’ white collar workers.
And even if I’m wrong, and these lower tiers in the hierarchy of the automotive manufacturing industry in fact do have their own engineers, etc., call me proud if you want, but I’d like to have an industry where the master engineering blueprints, etc., etc., etc. originate here in the U.S. (and Canada, because I have nothing against our very close neighbors to the north).
I want to live in a country that knows, is able to, and WANTS to conceive of, design and engineer its own stuff, not just assemble other people’s stuff. Reading the comments around here, I’m shocked to learn that I may in fact be the minority.
Oh please. Who cares about MICHIGAN economy, if you don’t live there, or the domestic workers, specially since at least some of their problems are made by their own UAW?
Let me ask this question. When those domestic auto workers go out to shop at Walmart, JC Penney, Sears, or any other major department store, do they chose what they buy based on where those products are made? No. If they and everyone else cared, there would be more American-made goods sold there. This simple observation confirms that economic self-interest trumps nationalism.
Why should a car shopper from California or Texas potentially forgo buying a superior product because it’s made somewhere out there, in some other state?
Precisely! Of a car price (let’s say £16000), the most profitable car maker (say, Toyota) works at a 10% profit margin. This means that £1600 will go back to Japan and the remaining £14400 will stay in the country, some Americans will have a jobs and the economy’s trade deficit is shorten by a little bit.
If you buy a Detroit car then they make negative XXX dollars, so by not buying from Detroit you are actually helping those companies lose less money. :-)
brent your right in a sense and I kind of agree with you. The transplants have white collar job in the US also, I know Hyundai has design and I think engineering in CA, and Honda and Nissan I think too. Or did Nissan move to Tenn. Toyota has a bunch of white collar jobs in Erlanger KY not far from where my parents live. The problem is the domestics are shipping those jobs out of this country while the transplants are investing more. Except for the big trucks and SUV’s many of their products are engineered in other countries. Opels that come here as Saturns or underpinnings for the new Malibu. The ecotech German in origin. Australian Pontiacs. Chryslers that originated as Mitsubishi’s or Mercedes engineering. Ford’s coming from all over the world while they get ready to cut a bunch of US white collar jobs.
The best thing to do is buy the product that meets your needs best and let the other know “I’m the customer this is what I want”. The ones who want to stay in business and earn your dollars will work to give you what you want. It’s even better if its made locally, but blindly giving a manufacturer support without them earning it just makes it worse. If people had demanded better products from the domestics 2 decades ago instead of doing the flag waving deal they probably wouldn’t be in the mess they are in now, they would have changed when they had the capital to do it or gone the way of the Dodo.
Katie I agree very much with your last post, very well said.
I always purchase/lease an American vehicle. Despite vehicle content, I can figure out where the profits ultimately end up. I prefer to keep them in the USA. I am surprised by all the posters declaring that they will buy what they want and scre the big 2,8. Sounds selfish.
Hey, redbarchetta, you took the words right out of my mouth! Well said. My wife’s Hyundai was partly engineered in Ann Arbor, our home state of Michigan; they have a styling house in California; and the car was manufactured (NOT just assembled) in Montgomery, Alabama. The new 2009 Sonata interior and exterior were entirely designed in California and are a nice improvement on my wife’s 2007, which had some design input from the US, and some from South Korea.
I “thought” (very incorrectly) that the Hyundai factory was probably just an assembly hall and that “kits” from South Korea came in and were put together like the models I bought when I was a kid.
Nope. I was there on a tour with my wife and we saw it first-hand in January.
Full scale factory, with rolls of galvanized steel (“US Steel” on the round end plain to see), a paint facility (more than up to date – and yep, my wife’s Sonata – built in Montgomery – has the nicest paint I’ve ever seen on a car, bar none), a press plant, automated welding plant, engine plant for BOTH four cylinder and automatic engines and of course, an assembly plant.
It’s a sign of the times that a “car guy” like me, born and bred, raised and worked in Michigan for most of my life of 51 years, couldn’t get in to see American (branded) cars being built and had to do a 2300 mile round-trip to see Hyundai Sonata sedans and Santa Fe SUV’s being built. At least it was in January and we got away from the cold for a few days…
skooter how many times does it take a person getting screwed over by a lousy product/ service before he votes with his feet? I hear very few stories about satisfied domestic car buyers. I hear lots of unhappy stories.
As for the talking head blaming the victim. When the companies you hob-nob with started cutting head count and shipping jobs overseas did they ever stop and consider what they were doing to their customer base? People have to maintain a certain standard of living to afford new cars. Downsized folk are lucky to hang onto what they have let alone buy new stuff.
I just double checked, now that I’m home, and have an addendum to my post about “how to tell a car is sourced from (name the country)”
USA also has “5” as the first place in the VIN, as well as “1” and “4”
“2” is Canada.
“3” is Mexico
Etc.
My wife’s Sonata VIN actually starts with 5, and our Clipper pop-up actually starts with 1.
I think I read somewhere that the worldwide organization started to run out of VIN numbers for the US so assigned “5” as well as “1” and “4”.
At one time, except for the handful of priests, soldiers and prostitutes, everyone worked in agriculture. But over time, human creativity introduced improvements that allowed only 2 to 3% of the population to feed everyone else. That same trend is happening with manufacturing. And it’s happening everywhere, even in the China’s of the world. For every new tech plant that hires hundreds of Chinese workers, there’s a giant obsolete steel mill employing tens of thousands that can’t compete with a US mini-mill with dozens of employees. It’s called productivity and it isn’t going away. Try to stop it, and you’ll find out what a real economic depression really is.
And there is an economy that tries hard to keep it all local — North Korea. That works so well that their people have starved by the millions and the survivors are stunted compared to their neighbors to the South and North. In fact, the only thing keeping them going is cash from the South (out of fear of reunification costs), fuel from China (out of fear of refugee hordes and a reunified modern Korea on their border), cash from Japan (from exiles paying to keep their families back home from being sent to death camps), and cash from drug smuggling and counterfeiting (US successes in cracking down on those activities directly led to the nuclear test). But gosh darn, those North Koreans keep it local.
GM, Ford and Chrysler are part of the American Corporate movement which is pushing as many jobs off-shore as possible, including white collar jobs. The Fusion is based on a Mazda design, the Taurus on a Volvo and the upcoming Fiesta is a European design.
The problem with the buy American argument is that for a very long time the engineers, managers and workers who built “American” cars didn’t feel any responsibility towards their fellow citizens who bought the things. All those years of callous disregard for the customer are sadly coming home to roost.
Who supplies the bulk of the Sonata’s parts? American, Japanese, or Korean sourced suppliers?
Yeah, I will stick with my 100% made in Japan Forester. Call me crazy but I enjoy a vehicle that is reliable and holds its resale value.
People make the where-the-profits-go argument as if it were an obvious truth. It isn’t.
There’s a 1,100+ comments thread on this site somewhere that includes this topic….
Buying vehicles made in transplant factories has more domestic economic leverage than buying an import from a foreign company. But it gets much murkier from the collective domestic benefits standpoint when comparing transplant output with domestic and NAFTA output. The transplant purchases support the highest value headquarters jobs in their home countries, including the intellectual capital associated with R&D. Those jobs are not located in the US and do not benefit our economy.
US production by US companies using mostly US-sourced content obviously has the highest economic leverage for American automotive consumers. NAFTA production is often derided here as having inferior value to transplant production. Not so. NAFTA production relieves some stress on our southern border, which is expensive to overcome through other means, and Canada is our largest trading partner and a tightly-integrated neighbor. NAFTA production returns cash to Michigan, which whether profitable or not at the moment, is helpful to the turn-around progress of these companies. Any NAFTA production purchases, ala Fusion, also directly support the rich cache of US HQ jobs associated with the Detroit 3, and their large R&D budgets. Forbes is right: if you are buying a car and want your purchase to be of maximum benefit to the US economy, buy something US or NAFTA-produced from GM, Ford or Chrysler.
No, I’m not entertaining any caterwauling about your 198X Oldsmobile, Escort or Omni. Nor your bawling about a head gasket problem in something made in 1993. Nor am I sympathetic to the imagined trivial advantages that a Corolla allegedly has over a Focus or Cobalt. I’ve driven all of them. Yup a Civic is the most refined, but don’t even think about defending its category-common cheesy interior and paper-thin plastics. I’ll take a Cobalt SS, please. Or maybe an HHR SS. HHR is clearly embraced by the buying public and I have to remind you, it’s just a Cobalt with more interior space, yet is pleasing owners by the tens of thousands.
It’s 2008. From Focus through Fusion through Taurus, Flex, Lincolns and trucks; from Cobalt through Malibu through Impala through LaCrosse, Lucerne, CTS, STS, SRX, XLR, Escalade, Silverado, Corvette; we have choices for good (some great), competent, reliable American vehicles. Some are standout, some are mid-pack, all are competitive by any realistic measure of the way people actually evaluate cars for purchase. No, don’t try to persuade me that the pocket-protector data criteria claimed by the Camry/Accord market is majority mindset.
I’m not arguing for “patriotic” purchasing. There’s nothing patriotic about buying something conclusively inferior just because of where it’s made. Kill the truly inferior Detroit products as quickly as possibly by shunning them. But drop bias, history, bigotry, resentment and choose from the D3’s competitive mix if you want your automotive purchase to have maximum domestic economic leverage. If you don’t, then don’t. Your call. What you can’t do is claim you’re interested in the persistence of a domestic automotive industry and then eschew D3 products, rationalizing that “we have an American auto industry — it’s the US factories of Honda, Toyota, Nissan, et al.” No, it isn’t. That’s just a collection of foreign-owned manufacturing capacity and attendant labor. Better than nothing, but not peer to a domestically-owned and headquartered automotive industry.
As for those Chinese and Korean factories operated by GM, the company is also profitably active in those markets. It is reasonable for GM to import some production in those countries when its cost basis here in the US precludes sustainable manufacture. Should it stay that way? Not if they can manage their domestic costs to sufficiently lean production to make money on US manufacture in the thinnest-margin sectors. But in the meantime and even as a US manufacturer, it’s better to sell an Aveo, for instance, than to vacate the sector entirely. They can always bring it back home later.
True, free market principles work best, and free market means free will. The buying public will do what it wants, but it is also free will to include the national socio-economic context in your buying decision. “Free market” does not coerce you into making an artificially restricted product decision, nor does it compel you to artificially expand the scope of factors that weigh on your purchase. But anyone who buys an import or transplant when a competitive domestic alternative is available, is also undermining to varying degrees their own interests.
If Americans want and care about persistence of a domestically-owned, large and vigorous automotive manufacturing industry, we collectively have in our reach the economic power of many individual decisions to finance the turn-around of the D3, without a single tax levied or governmental liability offered. Even in a sluggish 13 or 14 million units year, the swing of a few million customers who choose the larger context of community over narrow product differences can underpin the recovery of the D3. Yup, the executives have to change their ways, but given the crisis and the time to solve it, it’s really up to us. The only question open is, “Do enough of us care?” It’s not patriotic buying; it’s self interest. I know it’s possible: I’ve had Camry-like reliability from built-in-USA Detroit 3 cars since 1983.
Phil
Whether domestic or foreign or a mix of both, vehicles have to be powered by something. If it is oil, we import over half of it. When we do wealth flows out of the U.S. economy and into the hands of oil exporters, many of whom do not like us very much to put it mildly.
Perhaps the best way to support the American economy is to drive less or do without a car if possible. Failing that, running your car E85 keeps a very large share of the wealth at home. Even E10 helps out a little.
As the Post Peak Oil world unfolds it is likely that globalization will have to decline due to expensive oil and the costs of shipping parts around the globe. It may be that at some point it will become uneconomic to have other than domestically produced cars.
These cars will be made by foreign companies but will have high domestic content to save on transport costs. The Detroit 2.8 would have had a home court advantage, but they are so screwed up product and management wise that it won’t help.
It will probably be that foreign producers like Toyota will be producing cars of high domestic content Post Peak Oil. They will be small, fuel efficient cars like the Yaris or the Prius which Detroit seems incapable of competitively producing.