Wednesday, June 10, 2009

There Is A Very Bright Future for the U.S. Auto Industry; IF You Include the Foreign Transplants

As we learn more about the troubles of GM and the other U.S.-owned car companies, we should reconsider what it means to be an American car company and look at which car companies are really benefiting our country, our workers and our communities.

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.

20 Comments:

At 6/10/2009 10:53 PM, Anonymous gettingratioanal said...

Do we ever have any commentary on the impossibility of U.S. auto manufacturer's to export to most other countries? NO! Because most influential financial commentators are stuck in the 1980's mind set the U.S. can "Ropa-Dopa" with other economies. Not anymore -- we are on the ropes and our citizens are getting financially pummelled. Let us catch up with reality.

 
At 6/10/2009 11:53 PM, Blogger misterjosh said...

where have you been? Perry's mentioned GM's international operations repeatedly over the last month. GM does exactly what Toyota does. Builds the vehicles in situ.

 
At 6/11/2009 12:07 AM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/11/2009 6:03 AM, Blogger Walt G. said...

Robert Miller,

A lot of the same people who support Buy American campaigns support other irrational notions such as patriotism. It really just boils down to how each person looks at things: Doesn’t it?

 
At 6/11/2009 6:33 AM, Blogger bob wright said...

Walt,
Why do you see patriotism as irrational?

 
At 6/11/2009 7:26 AM, Anonymous Anonymous said...

"A lot of the same people who support Buy American campaigns support other irrational notions such as patriotism."

There's nothing more patriotic than celebrating individual liberty..that includes the freedom for each individual to drive whatever automobile he/she wants, without being cast out as a black-hearted traitor. I, like Mr. Miller, have driven many types of automobiles based on my tastes and preferences. Perhaps the best response that a driver of a "foreign" automobile brand can give when asked why they did not buy an American car is, "I simply did not wish to over-ay for an inferior product simply to prop up a bloated labor union and a mis managed company. So I bought this one."

 
At 6/11/2009 7:44 AM, Blogger Walt G. said...

I support anyone's right to buy or not buy whatever they want as individuals. I also support people that decide to band together for whatever cause they feel to support. That includes dying for their country or buying what they consider an "American" car. Free people have a right to be irrational.

If you think about it, though, not buying a car because it is union-made or made by a "mis managed" company is just as irrational as buying a car because it is “American” made. Isn’t it?

 
At 6/11/2009 7:46 AM, Blogger Walt G. said...

bob wright,

Let base patriotism on someone’s willingness to go to war and die for it and nothing else. Here my logic:

The main purpose of life is to live. If you go to war you could easily die. Therefore, you should not go to war.

You can throw a lot of “what ifs” into that and try to make an argument otherwise, but you have to qualify that the conditions where you would be better off dead than alive apply to do so.

 
At 6/11/2009 8:19 AM, Blogger Paul said...

"If you think about it, though, not buying a car because it is union-made or made by a "mis managed" company is just as irrational as buying a car because it is “American” made. Isn’t it?"

No. I don't support union thuggery backed by government, and especially Democrats. Nothing irrational about that. I also don't wish to buy a piece of crap product put together by a "mis managed" company. Nothing irrational about that either.

 
At 6/11/2009 9:13 AM, Blogger Walt G. said...

Paul,

Aren't you talking about the same kind of ideals that the Buy American camp is using?

OK, so you don't buy it because it is a piece of crap: That's rational. But, how does your perception about a mis managed company or union thuggery fit into a rational decision- making process?

I think a “Buy American” campaign is a nice marketing ploy; however, I don’t think it should be any type of law. On the other hand, I don’t think limiting your choices to just cars made by the transplants make common sense either. Tests drive TODAY’S cars and don’t let the past cloud your present buying judgment. There’s a lot of very good metal out there for sale today at a value not seen in our lifetime. Choose wisely using all of the facts.

 
At 6/11/2009 9:14 AM, Anonymous gettingrational said...

I support the right of consumers to have choices ("Free to Choose").
I also will fight the corrupt mindset that our trading "partners" get a pass anymore. The way to defend a system of choices is to curtail trading activity with non-choice countries that defy trade agreements.

I will ask again why we do not question the lack of ability of domestic auto manufacturers to export to other countries? Why don't foreign consumers have the choice of a Ford F 350 pickup truck; Mustang; Cadillac CTS; GMC deilvery truck; Ford Fusion; Chrysler Minivan; Jeep Cherokee etc. Do Japanese or Chinese consumers, that can afford them,
have the choice to readily obtain one of these? Very difficult.

This can be said of most domestic manufacturers of goods and services from software to pharmaceuticals and a myriad beyond.

I am glad to see foreign auto manufacturers assembling in the U.S. but the ability to export U.S. goods and services needs a stand taken RIGHT NOW.

 
At 6/11/2009 9:47 AM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/11/2009 10:46 AM, Blogger Walt G. said...

Robert Miller,

You take offense where none is intended. I don't make an argument to Buy American unless you are so inclined. And we don’t need a law that says you should. We can leave the selling methodology to the marketing gurus and recognize it for what it is. I don't really know what an “American” car is anyway.

I am simply arguing that refusing to buy a car just because it is union made is as irrational of a decision as a Buy American campaign. If we are going to make emotional decisions, which is the right one, and which one is the wrong one?

Thank you for defending me and my country. I personally and sincerely appreciate it both as an individual and as an American.

 
At 6/11/2009 10:53 AM, Anonymous gettingrational said...

Mr. Miller you retort about racial bigotry is odd and pure nonsense.

Your smug smog must be of the same makeup that George W. Bush had regarding outsourcing. I remember him visiting the workers in India that were doing work for U.S. companies. He was very proud of their work. I wonder how many of them pay U.S. taxes to support American fighting men and women? How much of a tax do they pay to the U.S. Treasury for retirements of our noble service people?

You are digging a deeper ideological trench. This has nothing to do with the UAW or other unions. The great majority of American producers of U.S. jobs are not unions and are shut out of the markets they should be competing in. Please reconsider for the sake of preserving freedom.

 
At 6/11/2009 11:37 AM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/11/2009 8:02 PM, Blogger 1 said...

gettingirrational says: "Your smug smog must be of the same makeup that George W. Bush had regarding outsourcing"...

ROFLMAO!

To much kool-aid dude, give it a rest...

What Constitutional power does the President have to determine outsourcing?

Yet someone else suffering BDS...

 
At 6/11/2009 10:11 PM, Anonymous gettingrational said...

@"1"

Constitutional power for outsourcing? None: Duh. But your link to FrontPage is enlightening in that it links to: JihadWatch.Org. This is a great site.

George Bush squandered his opportunity to stategically contain radical religious aggression. He also squandered his opportunity to help build a strong economic base to export goods and services and not on huge debt.

Does it make any sense he was so happy for the success of the people doing the outsourced work?
Please fight to open markets for U.S. produced goods and services and stop the charade.




















.

 
At 6/12/2009 12:05 AM, Blogger sethstorm said...

Domestic built, foreign designed and inspired, including the "transplant brand directed, US built vehicle".

Detroit doesn't make copies off of other manufacturers extensively(Kia/Hyundai/Ssangyong, Hummer), put performance at a unholy premium for the chattering classes(Mercedes, BMW), attract exotic gasses and improperly mounted metals/plastics(Honda, Toyota, Kia, Nissan, Subaru, and about every other clown-car company), de-power their cars on a concerted basis(entirety of Japan), and receive government assistance (all transplants).

That is why Detroit owns the Midwest. It has not had any of those lacking qualities for its existence. The only point you might have is that now they're all even on government assistance.


No. I don't support union thuggery backed by government, and especially Democrats

I don't support front group and lawyer-directed thuggery such as done by businesses against those who wish to take action against the conditions presented to them. Perhaps the Republicans could tell the union-busting agencies to pound sand, as they're harming our nation (and branching out towards non-union thuggery via Grigsby & Cohen).


It has everything to do with unions because they have muscled their way into unsustainable wages and protectionist policies for decades.

...and their opponents are getting more aggressive with their lawyers in delivering the final blow. No difference on thuggery.

 
At 6/12/2009 7:04 AM, Blogger 1 said...

"George Bush squandered his opportunity to stategically contain radical religious aggression. He also squandered his opportunity to help build a strong economic base to export goods and services and not on huge debt"...

No argument there...

Couldn't have said it better...

In many respects a very disappointing time...

 
At 6/13/2009 10:35 AM, Anonymous Anonymous said...

"George Bush squandered his opportunity to stategically contain radical religious aggression. He also squandered his opportunity to help build a strong economic base to export goods and services and not on huge debt."

@ gettingrational.

This is what is technically known as an ad hominem attack. It doesn't help prove your point.

 

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