What Is an American Car? Why Should Government Offer Special Deals for Uncompetitive Cars?
Before “loaning” billions more in taxpayer money to some very bad credit risks, simply because they are old American brands associated with Detroit, we might ask what distinguishes these companies from others.
The not-so-big three are certainly are no less global than, say, Honda. General Motors gets 44% of its revenue from other countries and Ford gets 53%. A German company, Daimler-Benz, still owns a fifth of Chrysler, and a group of affluent private investors owns the rest.
An “American” brand tells you little about where all the parts in a car are made.
Cars.com found only 4 cars and 6 light trucks with a domestic content (meaning US or Canadian) above 75%. That list includes the Toyota Tundra and Sienna and the Honda Odyssey. Other Honda’s have a 60-70% domestic content, barely missing the cut.
The “Detroit” metaphor for primarily domestic vehicles is also inappropriate. Among the remaining seven vehicles with a very high domestic content, 3 are made outside Michigan —the Chevy Malibu from Kansas and Cobalt from Ohio, and the Ford Explorer from Kentucky. Ford’s F-150 truck might be made in Michigan or Missouri, the Chevy Silverado in Michigan or Indiana.
The only strictly “Detroit” cars with high domestic content are the Pontiac G6 from Orion MI and the Chrysler Sebring from Sterling Heights MI. Consumer Reports says, “The G6 isn’t a very good car” and “The Sebring is one of the least competitive family sedans on the market.”
Yet these are the only Detroit-made sedans with a high domestic content. Does anyone really think taxpayer subsidies can save cars like that? And why should the federal government offer special deals for uncompetitive cars made in Michigan, thus tilting the playing field against better cars made in, say, Ohio, Tennessee or South Carolina?
~Alan Reynolds at Cato Institute