'Buy American' No Longer Black And White In Auto Industry

Newhouse News ^ | 12/14/2007 | Peter Krouse and Robert Schoenberger

[Incorrigible]

'Buy American' No Longer Black And White In Auto Industry

By PETER KROUSE and ROBERT SCHOENBERGER

	Honda may be a Japanese brand, but it makes cars in Ohio, where it employs more than 15,000 workers, including Lori Dennis. She believes her job in Marysville is as American as those who work for Ford, General Motors and Chrysler. (Photo by Thomas Ondrey)

Buy American doesn't mean what it once did. Not in the auto industry.

Honda's best sellers come from plants in Ohio while Ford imports cars from Mexico. Toyota opened a plant in Texas this year while Chrysler brought in cars from Europe.

And vehicles assembled in the United States are made with a growing number of foreign parts.

"Ten years ago, it was a much more regional business," said Dave Cole, chairman of the Center for Automotive Research.

Parts suppliers once clustered around U.S. plants making General Motors, Ford and Chrysler vehicles. Now, Detroit's Big Three comb the globe for high-quality parts at the cheapest price.

For buyers, these changes have blurred the emotional, decades-old conflict between domestic and foreign cars.

Which is which these days? How can a Honda made in America, by Americans, be foreign? How can a Chevrolet with a large share of foreign parts be American? The questions will only grow more difficult as automakers grow more global. And as more young people, lacking the us-versus-them allegiance, become car buyers.

The trend seems unlikely to retreat.

The Big Three still have more domestic content — defined as made in the United States or Canada — on average than their foreign-owned competitors. But the gap has closed considerably since Honda quietly opened the first Japanese vehicle plant in the United States in Marysville, Ohio, some 25 years ago.

Honda and Toyota still get a substantial volume of components from Japan, although those numbers are shrinking. Meanwhile, imports from Mexico, largely to the Big Three, are rising.

Chinese imports also are increasing, but those generally go to parts stores and repair shops. That's starting to change as General Motors and others use those parts in new cars and trucks.

Two-thirds of the value of a car lay in parts produced by independent suppliers, said Jim Rubenstein, a Miami University professor who has co-authored a soon-to-be-released book called "Who Really Made Your Car?"

"In other words, there really isn't that much Toyota or that much Ford in your car," he said.

That percentage has increased over the years as producers have looked to outsource as much production as possible to lower costs.

The trend has both helped and hurt domestic auto production.

Visteon, Ford's former parts division, and Delphi, GM's former parts division, have both found new work making parts for Honda, Toyota and Nissan plants in the United States. But much of the work those companies used to do for Ford and GM has gone overseas.

For all of the Asian-Pacific countries combined, imports of auto parts to the United States totaled $16.1 billion in the first half of 2007, up 4.2 percent over the same period last year. Mexico's jumped 6.4 percent to $14.4 billion.

Still, groups such as the United Auto Workers would like to see Americans avoid cars from those companies. It releases a list each year of vehicles it recommends from union-staffed plants in Canada and Mexico. That list includes two Toyotas built at a GM/Toyota joint venture in California and eliminates imported Ford, GM and Chrysler vehicles.

Toyota countered in 2005 and last year with a series of commercials that advertised its investments in U.S. plants, research centers and sales offices.

For all but the staunchest of "Buy American" advocates, the level of foreign-made parts in a vehicle is largely unimportant. Most Americans don't care about domestic content or whether a car was assembled at a union plant or a nonunion plant, said Rubenstein, the Miami University professor.

They are partial to certain brands, however. The most loyal American buyers drive Ford and Chevrolet pickups, Rubenstein said, but when it comes to cars, the Japanese brands have the edge.

That said, the buying habits of American consumers do transcend their own personal enjoyment.

While the Japanese do more than just make cars in the United States, evidenced by the 1,000 engineers working for Honda of America near Marysville, a purchase from one of the Big Three means that all the profits go to an American company. It also lends support to a greater number of U.S. workers producing parts.

The Level Field Institute, an organization formed by former UAW members, publishes reports on employment levels by foreign-owned automakers. The institute encourages buyers to consider the domestic content even when deciding between a Honda and a Volkswagen.

Honda makes cars in Ohio and Alabama out of parts produced in this country. VW imports all of its cars.

"Buying a Honda supports nearly 2.4 more U.S. jobs per car than a VW," the institute says on its Web site.

Rubenstein would take the argument further.

"Buying a car made by Ford, GM or Chrysler, on balance, is putting more money into the American economy than buying a Toyota or Honda," Rubenstein said.

(Peter Krouse and Robert Schoenberger are reporters for The Plain Dealer of Cleveland. They can be contacted at pkrouse(at)plaind.com and rschoenb(at)plaind.com.)

Not for commercial use.  For educational and discussion purposes only.

[RegulatorCountry]

I’ve had several Maximas, the first two were awesome cars, especially for the money. That ended with the 96 I bought. It had problems. I’ve been a Toyota man for years, but they’re slipping. This GMC Acadia is the first domestic make I’ve bought in over 20 years. I’m pleased with it thus far.

[absolootezer0]

yup, that’s a nice plant too. i drive by it every day on the way to and from work. they have a couple of the acadias sitting out on the lawn that borders on I69.

[org.whodat]

Chinese imports also are increasing, but those generally go to parts stores and repair shops. That's starting to change as General Motors and others use those parts in new cars and trucks.

They all use parts made in china, at one time you would never see a tail gate fall off a truck, now chevy's fall off because the cables are made in china, and ford rust off because the hinge made in chain is not rust proofed. And the foreign cars assembled here are mostly foreign parts.

All farm tractor are made overseas, except for the large, large one's and they are assembled here because of shipping.

[Responsibility2nd]

“Made in China” on the key fob?

Lotsa lead there, Im sure!

Not so sure I’d be sticking THAT down my pants pocket anytime soon.

LOLOLOL

[Alberta's Child]

The profits sail across the seas to Japan and Korea.

Those profits go to any shareholders of those companies, and the profits don't always have to sail across any seas at all.

It sounds kind of bizarre, but an employee working on Ford's assembly line would be better off having Toyota stock in his pension fund than Ford stock.

[Responsibility2nd]

I’m with you regarding Nissans. Love them

Wife loves her X-terra (2005) and so do I. I traded in my Silverado and bought a ‘06 Frontier.

Great vehicles.

[Alberta's Child]

And the corporate profits go where?

See #25.

[cyberaxe]

.....I really don't see it that way.....

.....BMW makes cars here in my home town.....

.....they pay workers here in my home town.....

.....those workers buy groceries here in my home town.....

.....those grocery stores have to build new stores in my home town.....

.....I build grocery stores in my home town.....

.....so now i can afford to have my wife drive a BMW in my home town.....

.....still looks kinda gray to me.....

[hermgem]

American’s are extremely lucky to have Japanese open non union shops in this country.
Just assume where the US economy would be if these Japanese would have opened shops in Mexico or Canada.
Look at the disasters and deteriorations of Michigan or specifically Detroit the former self proclaimed automobile capital of the world.
It’s those Japanese non union shops in the south with vastly enhanced productivity and lower pricing that literally saved this country’s automobile industry.

[RightWhale]

My old Chevy ‘87 is about 50% foreign parts. At least my new Toyota admits it is 100% Japanese, excepting those parts from China, Taiwant, S Kor, India, Mexico, . . .

[1rudeboy]

And the foreign cars assembled here are mostly foreign parts.

I haven't been to an auto dealer recently, but my understanding is that all autos sold in the U.S. must have a domestic-content sticker (required by Federal law). So your "mostly" is easily verified. To be false, that is.

[MajorTom56]

I wondered how long it would take for someone to bring up the greatest of all buy American vehicles: The GTO (not the recent Australian import). I join you in your appreciation of true American Horsepower. I daily drive my ‘71 El Camino SS 454 and you should see the looks from all the pitiful Sentras and Civics. Fortunately, I only have to drive 6 miles round trip to get to work everyday. Its pretty efficient when you consider that it has 400 hp. American Muscle Cars Rule.

[jmyrlefuller]

After 38 cars in 35 years, I will never buy another Ford, Jeep/Dodge/Chrysler, GM, Subaru or Toyota product.

I don't think the car is at fault here...

[Chi-townChief]

And in 5-10 years, we’ll all be riding around in these little egg-shaped Chinese cars.

[Chi-townChief]

I always buy used so do I get a vote??

[RegulatorCountry]

Chances are, if you own a vehicle built in the past five years, that the key fob remote for your car or truck was made in China, too. Injection molded plastics and simple electronics. Right up their alley, much as I dislike it.

[wastedyears]

Those little ricers with four-bangers don’t make any horsepower. If you want horsepower, you need a big V8.

[Incorrigible]

If you were driving a Chevy Equinox with the V6, your engine would be made in China too!

[bert]

If you are seeking the profits, buy the Japaneese or Korean stocks.

We live in the world ob business

[N. Theknow]

I don't think the car is at fault here...

A lot of company cars in that total with three jobs changes in 12 months. I also personally had three GM cars in 8 months that all crapped out during the first 5,000 miles.

Couple that together with 3 teenagers learning to drive on icy New England roads and Voila!

It really doesn't take much of an accident to total a car.