There Is A Very Bright Future for the U.S. Auto Industry; IF You Include the Foreign Transplants
BMW, Honda, Hyundai, Kia, Mercedes, Mitsubishi, Nissan, Subaru, and Toyota all have or are building auto manufacturing facilities in the United States. And not one of these has shuttered a plant during this recession or before. At a time when the domestic-owned car industry is in intensive care, with Chrysler and GM in bankruptcy, the rest of the domestic manufacturing industry is doing pretty well and continuing to benefit America and the communities in which their plants are located.
These foreign-owned plants are nothing less than the foundation of the new U.S. auto industry. In 2008, 3.1 million cars of the total 8.7 million sold, or just over a third, were produced by foreign-owned companies making their products here. That percentage is surely higher now, with the recent plant closings by American-owned car companies. And last year, plants for foreign-owned auto companies purchased $53 billion in parts from U.S. suppliers, further increasing the economic benefits to the U.S. of these vehicles being manufactured here.
Looking closely at the U.S. and non-U.S. content of vehicles sold here, the once-clear line between domestic and foreign autos becomes blurred. According to the Federal Reserve Bank of Chicago, Ford and GM as a whole had around 80% of domestic content in their vehicle lines in 2006 – but this was just barely ahead of Toyota (at 76.3% domestic)–which itself was actually ahead of Chrysler (at 71.3% domestic), see chart above.
There is a bright future for auto manufacturing in the United States–but only if you include foreign-owned auto plants located in the U.S., which have generated more jobs and helped sustain communities better in recent years than the domestic-owned auto industry.