Monday, February 23, 2009
Glenn Reynolds links to a story about the cars driven by members of the President's task force on the automobile industry: "Auto team drives imports, Fed task force has few new U.S. cars." The story then goes on to categorize the Honda Odyssey and the Toyota Corolla, both of which are made in the United States (and driven by members of the Obama team), as "imports". This is just bad journalism. A car is not an "import" because the badge on it is Honda or Mercedes rather than General Motors, Ford, or Chrysler, and it is not "American made" just because it has a Detroit Three badge. Toyota, Honda, Mercedes and BMW all make plenty of cars here, and the Detroit Three make lots of cars in Canada that are then imported into the U.S. market. The classification scheme used in the linked article (and many others) is therefore false in substance, and serves no purpose other than to deceive consumers into thinking that they are hurting American workers if they buy cars with Japanese or German brand names.
Well ... have a look at the "American" cars built/assembled/etc. in Mexico. The car carrier trains thru AZ tell the story ...
The jobs to build them are south of the border. Honda makes good cars, as do Toyota and other companies, and those jobs are in places like South Carolina and Tennessee.
What really drives the chattering classes wild is that the US manufacturing facilities of the Japanese car makers are almost, if not entirely, non-union. I suspect that's of more concern to them than where the car content originates.
I once owned a 1992 Honda Accord staion wagon. This was only built in Marysville, Ohio (non union factory, btw). This model was never built in Japan. It had >90% American content (some electronics and other items were from Japan).
Some years later, I bought a 2000 Mercury Villager van, which came out of the same factory in California as the Nissan Quest (virtually the same vehicle, by the way). They both (Quest and Villager) had about ~80% American made content.
Which was the import and which was more "American" in content?
I presently own a 2007 Ford Edge, and a lot of the content is from Mexico and Canada, although it was assembled in the US.
I read the list, and what struck me is that most of these people had pretty old cars. Shouldn't they be buying newer cars and "stimulating" the economy, or are they being thrify and living within their means?
While out on the Chesapeake Bay we see a lot of car carriers going up and down to and from Baltimore. These things are huge and have such a large amount of windage, I'd not want to go to sea in one.
The point I'm trying to make is that turnkey cars are big and mostly hollow. Banging sheetmetal and bolting it together is fairly low tech, but making powertrains is not. Powerttrains are also very compact. I'd be surprised if any of the transplant car makers built their high-value components here. The only reason a transplant would build these high-value parts here is if JIT, Just In Time, inventory control is paramount. I know that, in good times of course, If the tunnel between Detroit and Windsor, Canada, gets backed up, car production suffers.
I think the percentage of product made in the US for that product to have "Made in the USA" on it is 65%. I could be wrong.
As a previous commenter mentioned, the profits are exported.
Most of the Hondas built in Marysville, Ohio have >90% domestic (US) content. Which is probably greater than most Fords and GM cars, which have significant manufacturing in Canada and Mexico.
There is an engine factory in nearby East Liberty, Ohio, as well as a transmission factory up the road. There is a whole network of keiritsu factories that have sprung up in the area since Honda set up shop there in the early '70's (first making motorcycles).
What good does it do to buy a vehicle (or anything else for that matter)just because it is made in the US? I would argue that you should buy the best product for your situation regardless of who made it. If I let "American Made" trump "Good Value" then doesn't it discourage American companies from making better products? To me, this would seem to be bad for US companies over the long term.