The Detroit News, which is on the verge of going out of business, reports that many Obama administration officials are just like most other Americans — they prefer foreign to domestic when it comes to cars.
Of course, figuring out what counts as an "American" car these days ain't easy. As UM-Flint's Mark J. Perry points out, several American cars, including the Buick Lacrosse and the Chevy Impala, are made by UAW workers in Canada. "What about the 2008 Honda Pilot and Honda Civics," he asks, "built in the U.S. with higher domestic content (70%) than the 2008 Dodge Ram (68%) and the Michigan-built Ford Mustang (65%)?" And don't forget about the cars that sound foreign, like the Mitsubishi Galant and the Toyota Corolla, that are often made by UAW workers in the U.S.
It's all a little confusing. Unless, like me, you've got a 1990 Camry that's paid off and a San Francisco-sized mortgage. I'm not paralyzed by choice. I'm broke.
UPDATE: An insider at one of the Big Three points out that there's a big difference between "Made in America" and "Assembled in America."
The distinction that is being made about what is "Made in America" is a subtle one. More accurate for many foreign nameplates with factories here is "Assembled in America". A significant part of the cost of a vehicle is in the assembly process (i.e. the factory workers who make $40-60K per year and use that money to buy things in their communities). An equally significant piece of the cost structure are the support functions that also help build middle class neighborhoods in Flint and Detroit. These are the engineering, purchasing, finance, and IT functions just to name a few. Thousands of these folks work for the auto companies and these jobs go away when volume drops just like the factory jobs. One of the differences between a foreign company and an American company is that these jobs - thousands of them - are here in the US - not in Japan, or China, or Korea. Some of these companies may have a design center here and there but the vast bulk of their support groups are in their home country. So saying that a Japanese car assembled at a factory here in the US is just as American as a Chevy or Ford assembled in the US is not correct. The dollars traded within our communities by employees and families of the Detroit Three far exceed those traded by factory workers of foreign nameplates.Think about this for a minute. One day, when the volume and demand return for auto purchases again, every car company in the world will be making money. When profits are made, people get raises and maybe even bonuses. The support employees right up to the mid level managers may get a modest bonus in a good year - say $3 - 6K. They may use that money to build a new deck, put on a roof, replace the windows on their house, take a vacation - you name it - the point is they put that money back into the economy. The big guys with the bigger paychecks put more back into the economy and often donate more as well. Nearly 100% of the cultural centers in Flint and Detroit are due to the generosity from the folks who helped create great wealth from the auto industry.
So when Toyota makes money, where does that wealth go? Right back to Japan.
Where a car is assembled is not the only measure of what constitutes "Made in America" and I would argue that the wealth and support of the US economy by a foreign car assembled in the US is dwarfed by an American car company assembling a car anywhere in north America. Think about that next time you want to justify your support of the US economy by purchasing a Honda assembled in Ohio.
