Tuesday, February 24, 2009

Is A Van Produced in Alabama Really an Import?

The Honda Odyssey below is built in Lincoln, Alabama. Can this really qualify as an "imported" vehicle?

From the Detroit News comes this article "Auto Team Drives Imports: Fed Task Force Has Few New U.S. Cars,"

The vehicles owned by the Obama administration's auto team could reflect one reason why Detroit's Big Three automakers are in trouble: The list includes few new American cars.

Among the eight members named Friday to the Presidential Task Force on the Auto Industry and the 10 senior policy aides who will assist them in their work, two own American models. Add the Treasury Department's special adviser to the task force and the total jumps to three.

The Detroit News reviewed public records to discover what many of the task force and staff members drove, but information was not available on all of the officials, and records for some states were not complete.

MP: The article mentions that OMB Director Peter Orszag, EPA Administrator Lisa Jackson, and Jared Bernstein, Vice President Joe Biden's chief economist, all own Honda Odysseys. Rick Wade, a senior adviser at the Commerce Department previously owned a 1998 Toyota Corolla. OMB Director Orszag and Heather Zichal, deputy director of the White House Office of Energy and Climate Change, both own Volvos. Treasury Secretary Tim Geithner once owned a Honda Accord.

And those examples above illustrate the confusion about "imports" vs. "American" cars: Honda Odysseys (pictured above) are built in the USA (Alabama), the Toyota Corolla is built in California by UAW workers (that's not an import), Ford Motor Co. owns Volvo, and some Honda Accords are built in the USA (in addition to Mexico and Japan).

From a previous CD post, slightly revised:

1. Here's a list of 8 "American-made" vehicles produced by American UAW workers, in American factories, but for foreign-based car companies. If you purchased one of these vehicles, would that count as "buying an import"?

American-made UAW vehicles:
Mazda 6
Mitsubishi Eclipse
Mitsubishi Galant
Toyota Corolla
Isuzu i-Series Truck
Mazda B-series Truck
Mitsubishi Raider Truck
Toyota Tacoma Truck

2. What about these nine Canadian-made vehicles, produced by UAW brothers and sisters at factories in Canada, for the U.S.-based Detroit Three. Wouldn't they qualify as an "import"?:

Canadian-made UAW vehicles:
Buick Lacrosse
Chevrolet Impala
Chrysler 300
Dodge Challenger

Dodge Charger
Ford Crown Victoria
Lincoln Town Car
Mercury Grand Marquis
Pontiac Grand Prix

3. What about the Chevy Aveo, which is built by Korean automaker Daewoo for Detroit-based General Motors? Or the Chrysler PT Cruiser, built in Mexico? Aren't those imports despite the American-sounding names of Chevy and Chrysler?

4. What about the 2008 Honda Pilot and Honda Civics, built in the U.S. with
higher domestic content (70%) than the 2008 Dodge Ram (68%) and the Michigan-built Ford Mustang (65%).


5. What about the Toyota Tundra, Toyota Sienna and Honda Odyssey, which rank #5, #6 and #7 for the "Top American-Made Cars" in 2008 by Cars.com?


Bottom Line: When it comes to cars, trying to define an "imported" or "American" car will drive you crazy! The Detroit News should know better....


24 Comments:

At 2/24/2009 10:47 AM, Anonymous jrich said...

It was such a big deal when Toyota entered the ranks of NASCAR's (now called) Sprint Cup ranks. It had been decades since a foreign nameplate had raced in the series and many fans didn't want a foreign car coming into the league. When some astute reporters compared where the models that the teams raced were made, they found that the Dodge Charger and the Chevy Impala were made in Canada while the Ford Fusion was made in Mexico. In fact, it turned out that the Toyota Camry became the only car currently in NASCAR that is actually made in America by US workers.

I find it quite interesting that President Obama and some uninformed (or uninitiated) NASCAR fans share the same naive sentiments over "American made."

 
At 2/24/2009 11:16 AM, Blogger Walt G. said...

People should buy what they want. After all, it’s their money. However, perception is more important than reality, so the definition of “American” car does not really matter. I know of one person whose business income suddenly dropped a lot after buying a Toyota truck. Was that a coincidence? Maybe. But, it might not have been a prudent business move in Flint, Michigan.

 
At 2/24/2009 12:47 PM, Blogger Bruce Hall said...

Perhaps one should look at the total investment and labor for the companies.

An assembly plant certainly is a large local investment, but if all or most of the research, design, component sourcing/production is done outside of the U.S., the overall impact could be far less for one company versus another. Look at the totality of investment and return to the economy versus cherry-picking an assembly plant.

Also, look at the taxes ... local, state, and U.S. per vehicle sold.

 
At 2/24/2009 1:16 PM, Anonymous Anonymous said...

Detroit does a great job of distorting perceptions. I was in Detroit some years ago for business. It was alternate history spooky to see no foreign badged cars on the streets. None. They have made a bubble where foreign competition does not exist.

Drive imports out of the country? Why not? They've done it in Detroit.

 
At 2/24/2009 1:17 PM, Blogger @sethstorm said...


The Honda Odyssey below is built in Lincoln, Alabama. Can this really qualify as an "imported" vehicle?

Yes, full stop. Import design, domestic assembly. I believe they call this CKD in some countries.


the Toyota Corolla is built in California

Import design, domestic assembly again.

Same thing for most of those "fake domestics" from Japan you listed beginning with the Mazda 6- ending with the flimsy-blocked Tacoma.

Japan might want to take a lesson and build more like the second list(the Canadian muscle) and less from that first list.

 
At 2/24/2009 1:20 PM, Blogger @sethstorm said...

Anon 1:16:
Same thing here in Ohio - and I'd call it a benefit.

It makes for a good selection of domestic cars - and easier repairs.

I don't have to contend with as many golf carts - plenty of affordable muscle.

 
At 2/24/2009 1:25 PM, Blogger Walt G. said...

Bruce Hall,

That’s a nice sentiment, but it will never work. Research shows anywhere from 80% to 90%+ of the people buy using a combination of three criteria: price, quality, and convenience (not necessarily in that order). Ignoring those three criteria means that you are attempting to sell to a niche market. There’s nothing wrong with a niche market if that is your business plan, but I doubt that many automobile manufacturers could lower unit costs enough to sell at the resulting low volumes and still make a profit. There’s just no way magical around making what the customer wants to buy in a competitive market.

“Buy American” is just a slogan meant to make people feel like they are doing something that cannot realistically happen in a rational world. This position causes me a lot of trouble with my co-workers, but I find few people who want to attempt to logically argue otherwise.

 
At 2/24/2009 1:41 PM, Anonymous Anonymous said...

Of course it's an import. If this car would have been made by an American company, the losses would have stayed in America.

 
At 2/24/2009 1:42 PM, Blogger misterjosh said...

@Sethstorm said:
Japan might want to take a lesson

um... why? Their cars are more popular than "American" cars.

I don't have to contend with as many golf carts

so... bearing witness to the existence of foreign-designed vehicles counts as contending?

 
At 2/24/2009 3:26 PM, Blogger OA said...

"The Honda Odyssey below is built in Lincoln, Alabama. Can this really qualify as an "imported" vehicle?

Yes, full stop. Import design, domestic assembly. I believe they call this CKD in some countries."

@sethstorm, what's your opinion of outsourced manufacturing then? As long as it's designed in the US, no worry on where it is built?

Are Nike shoes domestic? How about New York designed clothes made everwhere but the US? Ever check where computer software is actually packaged?

The real issue is where are the jobs? Some of the biggest American corporations like Procter & Gamble and Johnson and Johnson actually have huge overseas operations to supply local markets there. Caterpillar and GE do the same to a lesser extent.

 
At 2/24/2009 3:33 PM, Blogger Ken Braun said...

I grew up in Michigan during the late 70s and early 80s, when the economic xenophobia of the day was directed at cars that really did come from Japan. (The iconic symbol of this was the evil beating to death of Vincent Chin -- a Michigander of CHINESE ancestry attacked by extremely ill-willed and otherwise geographically miseducated autoworkers who thought him to be Japanese and thus the source of their employment problems.)

Fast forward to today, and we're now afraid of minivans from ALABAMA?!?!

And during her State of the State speech a few weeks back, Gov. Granholm mentioned that we should wean ourselves off of coal from places like Montana.

Enemies are everywhere!

Where does the nonsense end? Is the economic policy of Michigan going to be that Ypsilanti should not trade with Ann Arbor?

 
At 2/24/2009 4:34 PM, Blogger Bruce Hall said...

While it is theoretically possile to import all goods we consume or import all research, design, and engineering for prodects we assemble with semi-skilled labor, the resulting economic stratification of our population with the shrinkage of the "middle class" might not be seen as a great benefit... except, of course, for the well-educated and individually successful who will have plenty of low paid people anxious to perform "service" work for them.

Who needs the jobs and wealth from American-based business when we can import all of our needs without consequences?

 
At 2/24/2009 5:53 PM, Anonymous Anonymous said...

Compare and contrast sethstorm and Ken Braun.

Ken Braun wins handily.

 
At 2/24/2009 6:17 PM, Blogger Ken Braun said...

"Who needs the jobs and wealth from American-based business when we can import all of our needs without consequences?"

You see, that's just the point. The big fear thirty years ago was that the middle class would vanish because we were importing the cars from overseas. We were supposedly going to ship our money and our standard of living across the oceans and all be left flipping burgers and having nobody who could afford to buy them.

This was the future spelled out to me in high school when I actually believed the "don't buy Japan" nonsense.

Guess what? Those dastardly foreigners started re-investing billions in factories RIGHT HERE that employed middle-class AMERICANS to build cars, all on the assumption that MOST Americans would be open to buying them.

But they didn't put those factories in Michigan, the supposed car capitol of the world. Ever wonder why that might be?

Perhaps we worked a bit too hard at building that "DO NOT ENTER" sign. Makes a lot more sense to invest in building cars where the people will be open to buying them, rather than openly hostile to your product.

Go figure.

So now, the panic changes with the facts so as to justify our self inflicted misery. Now, the horror is supposed to be that the furriners are what... investing TOO MUCH in America as a way of making a buck for their shareholders (many of whom are also ... ahem ... Americans)?

Once upon a time, our capital was flying away. Now, we're upset because it's coming back.

People invested in fear have been betting on the demise of the American middle class for decades. People investing actual money -- namely those foreign auto companies -- have spent that time placing bets that this same middle class will be around to both build and BUY their cars.

Guess who won? Just about everybody involved in the trade. States with virtually no manufacturing base 50 years ago -- such as Alabama -- may soon eclipse Michigan's average standard of living.

Who lost? Poor, silly, xenophobic, over-unionized, Michigan, got left out shivering in the economic cold.

This is a great place to live. It took an awful lot to screw it up.

 
At 2/24/2009 6:38 PM, Blogger QT said...

Ken,

Well reasoned post. My compliments to the chef :)

 
At 2/24/2009 6:47 PM, Blogger @sethstorm said...


Where does the nonsense end? Is the economic policy of Michigan going to be that Ypsilanti should not trade with Ann Arbor?

At the national level.


@sethstorm, what's your opinion of outsourced manufacturing then? As long as it's designed in the US, no worry on where it is built?

I'm not terribly worried if it's somewhere like Canada, the UK, or pre-expansion EU nations.

That's how I can at least settle with having a Canadian built Regal. The parts that usually break are the ones from China - such as the "replacement" door handles.

Yes, these are the 2-door, handles on the pillar assemblies. Cracked metal, fitting problems, and is worse than (maybe) the original design.


Are Nike shoes domestic?

Wouldn't know about the first question - my shoes are Missouri made Altamas. They weren't designed in some foreign country and made here - the design and manufacture is domestic.



The iconic symbol of this was the evil beating to death of Vincent Chin -- a Michigander of CHINESE ancestry attacked by extremely ill-willed and otherwise geographically miseducated autoworkers who thought him to be Japanese and thus the source of their employment problems.

Michael Nitz and Richard Ebens, formerly of Chrysler. I would admit that I don't condone their actions, but I understand them. The irony is that if that happened today, they'd only have the geography part wrong.


People investing actual money -- namely those foreign auto companies -- have spent that time placing bets that this same middle class will be around to both build and BUY their cars.

You confuse oversized golf carts with actual cars. Do you wonder why I have no problem with those Canadian built (and affordable) behemoths in that list?

The shame is that the Police Interceptor versions of the Crown Victoria aren't easier to find for sale, used. Same thing for the Impala equivalents.

 
At 2/24/2009 7:19 PM, Blogger Ken Braun said...

"Michael Nitz and Richard Ebens, formerly of Chrysler. I would admit that I don't condone their actions, but I understand them. The irony is that if that happened today, they'd only have the geography part wrong."

Sethstorm, I am at this point inclined to believe that you are deliberately playing a role to incite further discussion rather than stating your actual views. At least, I want to believe that this is true.

 
At 2/24/2009 7:22 PM, Blogger Ken Braun said...

QT said...

"Ken, Well reasoned post. My compliments to the chef :)"

Why, thank you. You're too kind. ;-)

More rants here if you're so inclined:

www.charliemarlowswar.blogspot.com

 
At 2/25/2009 8:17 AM, Blogger @sethstorm said...


Sethstorm, I am at this point inclined to believe that you are deliberately playing a role to incite further discussion rather than stating your actual views. At least, I want to believe that this is true.

I stand by my views on those two. The only thing over the top may have been my last sentence regarding those two.

 
At 2/25/2009 9:56 PM, Anonymous Anonymous said...

They should really make a sequel to the 1980s movie Gung Ho.

 
At 2/27/2009 2:53 AM, Anonymous Anonymous said...

"Wouldn't know about the first question - my shoes are Missouri made Altamas. They weren't designed in some foreign country and made here - the design and manufacture is domestic."

"Altama Delta Corporation was founded in 1969 in Darien, Georgia where the Altamaha River meets the Atlantic Ocean. Originally a children's shoe plant, the facility was converted to manufacture green jungle boots for U.S. Soldiers stationed in Vietnam.

ALTAMA moved its headquarters to Atlanta, Georgia in December of 1987"

once again, facts are distorted by opinions and myth.

just like American made. I find it hard to find much that is American made. And for all of those who claim Muscle cars and quality is only in American cars.. Facts tell us that more so called foreign cars with high miles, lasted longer, and still working fine.
Also, the fastest mass marketed production car today is a Nissan.
Facts. go look them up yourself.

 
At 6/02/2009 8:48 PM, Anonymous Lithous said...

For fun lets start with Ken Braun. The Japanese have been known to be brutal to others like the Chinese yet we forgave them enough to start buying their cars, when did Toyota setup shop over here? 1957? Pretty close to WWII. The point is you gonna dwell on the death of a person by some misguided people and use that as an example of what? All Americans who like to buy American?

And the loss of the middle class, that possibility isn't over. GM was on top of world sales for 75 years and then C11. It isn't over until it is over and the middle class will continue to suffer and possibly die out starting when no cars are made here anymore and they are made in China.

And the reinvesting that the Japanese did... we should ask the economic professor... GM had how many hundreds of thousands of U.S. employees at their height? I've heard betwee 400K and 600K. Has there ever been a net gain of jobs from the foreign automakers setting up shop in the U.S.? Also, you must as economist help out Ken by mentioning the hundreds of millions in tax breaks the Japanese received for building new plants.

 
At 6/02/2009 8:49 PM, Anonymous Lithous said...

Add the import restrictions that could be ducked by assembling here, the fact that only .5 (not 5 but point five) Japanese factories in the U.S. are unionized (harder to fire a union employee) and the fact that 50% of Honda and Toyota world profits came from this one country and you see a no brainer that they make cars here. Not out of the goodness of their heart like you would like us to think.


You should be afraid of a minivan made in Alabama because I am telling you this... cars will be made in China because of that Alabama minivan. As much as unions have been crap to the auto industry, the one saving grace is that, like nearly every product, cars would be made in Japan if not for the U.S. car companies and the union. That is just about the union's only benefit. So, that un-unionize Alabama built minivan would be built in China or at the very least Japan if not for the unions. Look at the internal memo sent out by Toyota asking why assembly workers get paid so much in America. It is because of the union and the Japanese wanting to keep up to keep them out. That is your middle class being saved by Detroit indirectly.

Speaking of "DO NOT ENTER" sign, that is the Japanese. They are such a diverse country aren't they? The funny thing is that you accept that a "CHINESE" guy being mistaken for Japanese is stupid. That could only be the case in a country where you have no diversity. I mean, someone who looks Chinese and has a Chinese last name could be 100% born and bred American. Even though that was a terrible situation with the killing, it goes to show how dumb you are for accepting that someone "CHINESE" could never really be Japanese (in citizenship) because they aren't diverse enough for that.

And Japanese corporations, "DO NOT ENTER" mr. American into our board of directors in the homeland. We let one of you in after 37 years of loyalty and you fled to Chrysler (where you did nothing for them, btw, why couldn't he, didn't he learn from the best?)

Please, Ken, keep supporting your Xenophobic Japanese you love so much by calling some Americans Xenophobic. Ah, actually, Xenophobic ways have suited the Japanese well so your theory that it killed Michigan is, um, not very strong. What killed Michigan is misguided logic like yours that you can't even see what is in front of you. Talking about Xenophobia while defending the uber-xenophobic.

What's next, kiddie port is good because it keeps kids off the streets?

 
At 6/02/2009 8:49 PM, Anonymous Lithous said...

Anyway, to the professor, the Corolla is also built in Canada but you fail to mention that.

Also, to the person who mentioned the NASCAR thing about the Canadian and Mexican cars... At least GM could rename the Impala in the Sprint Series to be Malibu, G6 or Aura (is that enough choices or what?) and they would have an American made car. Unlike the Camry, those have all been made here and not supplemented from Japan (even the hybrid Camry is still from Japan.)

Anyway, if I had more time, much more where that came from. A little American whoop ass, anyone? Any day of the week and twice on Sunday I will support factory workers here that can own their own house. Look up Japanese car factories in Japan and the dorm style living many partake. That is how I want my middle class to see fit to convert to doing.

 

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