By on March 4, 2007

wdwc_mickeys_car22.jpg If patriotism is a scoundrel’s last refuge, American automakers and their domestic defenders have been fixated on the end game for decades. The Car Connection’s Gary Witzenburg is only the latest industry wag to try to wrap The Big 2.5 in the American flag. In a rehash of a November 2003 editorial for Automotive Industries magazine, Witzenburg offers gullible readers a lesson from his school for scoundrels.

Witzenburg’s polemic– "What's an American Car?"– starts with a proposition. “Say General Motors decides to build Chevrolets in Japan…” The former GM PR flack argues that you couldn't consider this theoretical, made-in-Japan GM product a Japanese car because it was built by an American-owned company.

Meanwhile, back in the real world, Chevrolet builds and sells the Epica and Spark in China. Buick builds and sells the GL-8 minivan in The People's Republic. GM builds Aveos in Korea and sells them at Chevrolet dealers across America. By Mr. Witzenburg’s standards these are all American cars. By anyone else’s, they’re Chinese and Korean.

In Witzenburg's world, a Honda Accord designed by American engineers, fabricated by American workers (paid in American dollars), built in America (Marysville, Ohio) with mostly (though not exclusively) American-made parts is… Japanese. Anyone familiar with multinational automobile manufacturing knows that today's world market simply isn’t simple enough to support Witzenburg’s simplistic logic fed by yo yo bento.

For example, how would the polemicist classify the country of origin for cars built at NUMMI, the joint venture between GM and Toyota? The California plant produces both the Toyota Corolla and Pontiac Vibe. Do their respective badges make the Corolla Japanese and the Vibe American, even though they share parts and roll out of the same assembly plant? Not even dancing Tony Tuttle would agree with that.

As Witzenburg’s rhetoric shifts into high gear, the contradictions raised by his position become increasingly obvious. The writer’s definition of American cars expands to include Chrysler products— even though the company is owned (at least for now) by Germany’s DaimlerChrysler. At the same time, Witzenburg labels Opel a German car brand– even though it’s owned by General Motors.

So the location of a car company’s headquarters determines its products’ nationality; or the citizenship of the people who screw it together; depending on Witzenburg’s personal preference.

Poor Witzenburg. He lives at a time when Australian Holdens become “American” Pontiacs and German Opels become “domestic” Saturns– which are sold in showrooms next to "true American” cars (many of which are built in Mexico and Canada). The Big 2.5’s global production model has removed any remaining justification for the writer's “America first” defense, who must serve at the pleasure of the president.

No surprise, then, that Witzenburg changes tack and adopts the hackneyed “what’s best for America” argument. He states “while some (mostly southern) states continue to battle each other with big incentives to attract new foreign-maker plants to gain two or three thousand jobs, other (mostly northern) states lose tens of thousands.”

Witzenburg seems unaware that these “mostly southern” states have been trying to attract the automotive industry for years. They were snubbed by the American automakers based in the “mostly northern” states. Now the same automakers are crying foul when southern states do whatever’s necessary to lure industrial facilities, using incentives to create jobs for their citizens. Just like Michigan.

“What they did not see, or chose to ignore, is that ‘creation’ of a few thousand plant jobs here and there would eventually destroy many more and better jobs elsewhere.”

What Witzenburg doesn’t see, or conveniently ignores, is that the jobs in question were destroyed by The Big 2.5's refusal to recognize and adapt to a changing market, and the way they rolled over and played dead for the UAW. The Big 2.5’s tunnel vision led to this situation, not the efforts of a few state governors to provide a better standard of living for their constituents.

Witzenburg then quotes Jim Allard, professional organist and president of the Ford-funded Level Field Institute. “Is it more important to the U.S. economy for someone to buy a Ford Fusion, although it's built in Mexico, from a company that employs 105,000 SUV-driving Americans than a Honda built in Ohio from a company that employs 27,000 sushi eaters?”

In a word, no. If Americans bought automobiles based entirely on the number of ignorant Americans an automaker employs– not upon the vehicle's quality or value– there'd be only one domestic manufacturer. We'd all be driving something truly nasty (e.g. Lada). What's more, if foreign consumers followed the same rule, they'd never buy an automobile from an American subsidiary.

The Big 2.5 have staked their future on their ability to leverage the world automotive market for domestic success. Their plan contradicts the knee-jerk patriotism they've promolgated– or at least tolerated– ever since the foreign "invasion" began. Ironically enough, Gary Witzenberg is paving the domestics' road to Hell.

[To read Gary Witzenburg's editorial, click here.] 

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95 Comments on “It’s a Small (Minded) World After All...”


  • avatar
    starlightmica

    Extend patriot Witzenburg’s logic one step further, and you get this little bit of irony: buy a 2.5 branded import, please! Never mind that the trade deficit is at an all time high…

  • avatar
    Luther

    When someone prays on peoples sense of patriotism/guilt, it is like trying to get sympathy-sex at a bar… Pathetic.

  • avatar

    I have been awaiting this editorial. I read many automobile message forums and this is a constant running theme on many of them. This is my opinion. I self identify myself as a patriot and I also self identify as an American nationalist. However, I don’t’ equate the brand of car I drive with patriotism or nationalism. I also don’t equate as some do with any analogy of the United States is to GM as Toyota is to Japan bunk. I read those same refrains of patriotism and nationalism over and over and over again virtually everyday on autoblog and Detroit news forums by the same people every freakin day. The irony is reading them from self identified employees of Chrysler berating people for buying a car from a foreign company or reading comments on how the United States should ban foreign autos from self identified Big 2.5 employees in Canada. I am an American I love this country. How dare the supporters of GM, Ford or Daimler Chrysler try to equate my purchase of a car with patriotism. I love America because in America I am allowed to do what I want and like what I like and buy what I to want to buy and at the same time you are allowed the same opportunity. That is what being an American is all about. In their eyes I could be an ax murderer and as long as I buy a Tahoe I am more patriotic. I love America because I am the son of refugees from a communist takeover and here capitalism and free enterprise are allowed. Yet I read on those same forums from many of the same America first alleged patriots comments and questions on “Why are foreign companies allowed to sell cars here?” I love America because the American Ideal is that you are judged by your actions not by birthright, that opportunities exist for those willing to work hard. Most people that I know believe that people should be judged on their merits or actions. That is why I am a patriot. I believe in a meritocracy. Most people I know believe that people should not be judged on things like who was their daddy or the color of their skin. So why would I be upset that Toyota or Honda are successful? That is what America is about. These same people seem to feel that a company like Ford should be rewarded for deliberately not updating their successful products like the Ranger, the Focus, the Lincoln town car and the Taurus? Those were all success stories. I can’t help it if Ford was run by morons. Its not my fault that the bean counters run amok have cheapened the interiors or enforced draconian price cuts on their suppliers which may have hurt the durability of their product. Why is it that no one has been held accountable for the shitty way the big 2.5 have been run. The simple fact is that Toyota and Honda are successful in selling cars because they deserve to be successful and GM, Ford and to a lesser extant Daimler Chrysler have been losing market share because they deserve to. Auto companies and their products should be judged like people on their merits and past actions not on who they are.

  • avatar
    shaker

    The lines have blurred regarding “consumer patriotism” to the point of being meaningless. “Classic” American electronics and appliance brands have been resurrected to label Chinese-made goods of all sorts; Harley-Davidson makes more money on HD-labeled, foreign made baubles than they do on their bikes, and it seems that the best selling “American” cars are Hondas and Toyotas. If you want a definition of the “New America”, just look at the stock market, and it’s easy to see that the “Almighty Dollar” is the only product that the domestic corporations care about, with this profit built on the backs of the cheapest “labor-du-jour”. It’s a bubble that will continue to grow and burst as profiteers contimually seek to cut labor costs, by seeking the lowest ISO-Certified assembly plants on the totem-pole. The whole thing will finally hit bottom when we’re importing cars built from Bangladeshi-salvaged tramp steamers and oil tankers; hopefully I’ll know to move my 401(k) money just before this happens. With the self-destruction of the UAW (to paraphrase Darth Vader) “the circle will be complete.”

  • avatar
    philbailey

    The Car Connection is and always has been, a poor excuse for an automobile web site.

  • avatar
    Mark

    I fully agree that Ford and GM deserve the market backlash that has hit them. They simply were not delivering competitive product.

    That said, GM and Ford are now delivering product that meets or exceeds the compettion in a number of segments. For example, The Ford Fusion and Saturn Aura are just as good as the Camry and Accord—and arguably better values. GM’s + 3.7 sales vs YA point to the product driven discussion….better product will sell.

    Keep an open mind people—-please don’t turn car buying and commentary into the mess our political system is in where far right and left idiots control the dialogue. Net, you can hold Ford and GM accountable while still recognizing they have made progress over the past couple of years to field competitive products !

  • avatar
    hondaboy55

    Nice article Mr. Williams. I posted my response, or planted my seed for this article yesterday at the bottom of Chrysler Suicide Watch 9 so I will not repost it here. All I can say is that attitudes like the misplaced patriotic statements concerning “buy American” in part come from misinformed, or uninformed public. Its kinda like voting, should there be a basic competency test as you enter the polls? (should you be allowed to vote without having a clue what a candidate really stands for, or not knowing anything about them except for how they look?) After this president I’m more than convinced we need one for the office of president.

    Maybe we need a basic competency test, or at least post a reliability index for all printed, or all media launched bits of knowledge. Maybe things springing from Rush Limbaugh get a 0 and those closer to actual reality get an 8 or a 10. Would that give the Chevy truck commercials a 2 stamp.
    How effective would that make their truck commercials that include “this is our country…”be, if at the end of the ad a mandatory “This ad received a 2 based on unreliable or untrue content” For that matter how about the next election.

    PS please don’t go off an a political tangent I don’t want Robert to edit this out, just stick to the car stuff.

    later.

  • avatar
    guma

    Thank you Frank for raising this issue!

    I am sick and tired of seeing “This is my country…” type of BS.

    What’s good for America is more jobs here. And we all know who are creating new factories here, and who are shutting them down.

    I’m sure UAW-types will be quick to point out that for each Toyota/Honda/Nissan/Hyundai/BMW/Mercedes job that opens here, UAW loses more jobs.

    Well, I say: tough luck guys! It’s UAW’s fault for trying to kill the goose that lays the golden egg. Economics 101 says if you raise wages beyond a certain limit, number of jobs goes down. Live with it.

    Hell, if it weren’t for UAW, I’d bet GM/Ford will just pack up and move to China.

  • avatar
    Mark

    I think all can agree that blind patriotism is a bad thing—Hitler proved this one out.

    That said, rooting for the home team to win is not something that is either misinformed or uninformed. If Ford and GM launch a competitive product—I will look at them and consider for purchase. If they don’t—I’ll pass and hold them accountable via my wallet.

    Sadly, most of the posters and editorial staff on this forum are not as open minded. The mere suggestion that they look at a competitive (see Fusion / Aura) Ford or GM product is met with a “how dare you suggest that” disdain….”i would not ever want my friends to see me in an American car”

    Holding GM and Ford accountable is one thing (don’t buy their cars !). Happily rooting for them to lose is kind of sick given their historic and current contribution to the US economy.

  • avatar
    Glenn

    I think that GM Ford AND whatever’s left of Chrysler WILL pack up and move to China, just as virtually all of the so-called American electronics manufacturers did. Sure, there may be some kind of “headquarters” for once proud US electronics brands within the borders of the United States, but on every single box you look at, it says “Made in China” (meaning, a communist country), “Made in Taiwan” (the “real” China government and people, at least the non-commies), “Made in Mexico” (assembled there from Asian components, in other words, taking away assembly jobs in the United States where, at the last, electronics were made with Asian components).

    It won’t be long. A few years. The UAW is going to be only found in the history books.

  • avatar
    hondaboy55

    Well, its not to say that labor unions don’t have their place. Lets not forget what brought about the union in the first place. And looking at how Nasser, Billy, Al, and Rick, and whoever runs Chrysler, how these guys loot the chest as the company makes negative profits we can only imagine how much more poorly labor would be treated without the union.

    The problem is greed, and its present in management, labor now that they have lots of power, possibly too much. But then labor, and unions with 2 notable exceptions have been losing power, and size for decades now.

    Once the UAW is broken, and it will happen in bankruptcy, wages will fall to match what the transplants are paying. And keep this in mind, When globalazation envougued our leadership it was like taking 2 unequally filled glasses of water placed on the same table, and attaching a pipe from just above the base of one glass, over to just above the base of another glass.

    Just as intended, labor and standard of living went up in countries where typical wage for building a car might have been $2/day. But higher living countries had to fall because more comparable product was available at more competitive price. Only one short Texan tried to inform a stupid public about the unadvertised consequences of NAFDA.

    We should have been more patriotic then.

  • avatar
    Windswords

    hondaboy55:

    If you don’t want this discussion to go off on a political tangent whan why are you posting about politics? Your not very veiled barbs against President Bush and Rush are an blatant example of what you are asking us not to do. So lets keep it non-political and about cars. But since you brought it up we should have had the competancy test back when we elected our last president to office. Remember him? I rest my case. Let’s keep on topic. RF, would you like to say something policy related about this?

  • avatar
    carguy

    Well said Frank – this really needed to be said.

    Mark – I think there are not too many TTAC posters that want the domestics to fail or dislike them for some irrational reason. Most, like myself, want them to succeed but have been constantly disappointed and frustrated by their inability to keep Toyota, Honda and even Nissan from taking their market share. However, there are signs of life at GM (less so at Ford and not at all at Chrysler) and some of their new products look to be competitive. I for one a could not be happier – these products will sell themselves and will not need loud, cheesy and jingoistic commercials to guilt Americans into buying them – they will buy them because they want them. Which is how things should be in a market economy.

  • avatar
    kablamo

    Mark said [i] “Sadly, most of the posters and editorial staff on this forum are not as open minded. The mere suggestion that they look at a competitive (see Fusion / Aura) Ford or GM product is met with a “how dare you suggest that” disdain….”i would not ever want my friends to see me in an American car” “[/i]

    I think that’s a bit of an exageration. Plenty of people on this forum (like many in the country) have had very bad experiences with products from domestic auto manufacturers. These, whether they consist of appalling treatment from the company (or dealer, it’s all the same to most customers), outrageous repair costs, having been exposed to serious safety hazards, persistent problems, can all cause extreme frustration. For these people, it doesn’t matter how good current domestic autos are, as long as they are satisfied with what they currently have.

    As for some of the comments you are quoting, I can’t say I even remember reading anything like that here, in editorials or comments.

  • avatar
    hondaboy55

    Mark I disagree with you. My car company is Honda, they produced a great car and I am more satisfied with it than my previous fords. But I also own a Dakota, its very nice, and I am disappointed that my sisters 2000 Dakota has all the problems my 88 had, plus a bunch of new ones that include the possibility of the wheels falling off at while in its first 30,000 miles of ownership. The fact that dodge had to be dragged to court to fix this, and the fact that the new parts also lack a grease fitting disappoint me greatly.

    For some people reliability drives more on the decision phase than looks, reviews, colors, 3ed row seats, cup holders, younameit. For me, while I think the Ford 500 is a nice car, comfortable, and you have a nice view of the road. I pay no mind to reviews by any magazine, or website.

    For me to consider the 500 for purchase, either new or used, this car will have to have had all the right color circles filled in on consumer reports long term ownership survey. Same for any other car. The 99 Accord is off my list because of its transmission problems. Not cause I think Honda won’t fix it, they have fixed my dads with a smile and no expense for him. I just won’t consider it.

    While I made my living in labor for 18 years I can say that a $20,000 investment is not a light one. And I expect the vehicle to last more than 10 years, and have a 100,000 mile “gas and go” period. Honda is the only car I trust for that now. And I will have to see evidence of that dependability in F, GM, C or any other before I plunk down my cash I earned diggin holes to plant trees.

    The problem for the US and A manufacturers is that ” the cheap shows through ” and they just don’t last.

    later.

  • avatar

    Frank, I agree with the notion that the definition of a car’s nationality no longer includes the location of its production or the nationality of the workers assembling it. But you have touched upon and then entirely ignored over a very important part of that definition. “The location of a car company’s headquarters determines its products’ nationality.” This is vitally important and you have dismissed it as irrelevant. At the end of the day, what matters more than where a car was assembled or by whom, is where the revenue and hopefully profits from that car’s sale end up.

    The truth about cars is that if you buy Japanese your money supports the Japanese economy and builds wealth for the nation of Japan. If you buy American, your money stays within the United States and builds American wealth.

    The truth about cars is that new car buyers buying cars from American companies, regardless of where they are produced, is better for the American economy than spending their money with a foreign company.

    The truth is also that American car buyers have amply demonstrated that they are no longer willing to give American automakers a pass on quality and design and are willing to send their money to a foreign treasury. That is their prerogative in our free market economy. Any judgement of that is a political issue and not appropriate for this forum so I will refrain from judgement and ask others to do the same.

    Right here on TTAC recently we have seen many examples of cars that the domestic automakers have gotten right, and as an American I have the highest hopes and best wishes that that trend continues. If American automakers disappear we all lose, and an opportunity to make new American wealth is lost.

    The auto industry has been guilty for a long time of abusing the patriotism of American car buyers, substituting jingoism for quality and innovation. But in and of itself, there is nothing wrong with asking people to support their national economy rather than another nation’s. Let’s all hope that going forward American automakers do everything they can to earn their American domestic customers loyalty rather than take it for granted. Lord knows they’re going to have no other choice.

  • avatar
    hondaboy55

    well said Brandon. But in a world where the Company is publically held, and holders, in the USA, of Honda stock have for example doubled thier money in the last 2 years, the welth does not necessarally end up entirely in another nations pockets.

    But I still give you ten points for your posting. Very well said.

  • avatar

    Mark The problem is not whether someone is open minded or not. The domestics have a very hard obstacle to overcome. If someone had purchased a product from a company and was subsequently extremely dissatisfied with the purchase in relation to a subsequent purchase from a competitor, then tell me how many of those same people are going to automatically dump the second companies product to jump back to the original company. There are some who feel that if GM Ford etc make a competitive product that some how automatically that lost market share will return simply because after all GM Ford etc are American.

    It is my belief that GM has competitive products. While many on this forum disparage the Cobalt and the Impala. I believe that they are competitive products (hey its my opinion). The problem is that most of my friends and neighbors now have had fantastic experiences with their honda and toyota vehicles and it will be difficult to get those people to even try GM products becasue A) they had a shitty GM or Ford car in the past and B) they had a great Honda or Toyota.

    Can anyone blame them? Would it be any different for any other product? Why would it be differnt for automakers?

    Also for the record in one of my jobs I work at blue collar union job in Florida. More than half the cars where I work are imports although the majority of trucks are domestic. While no one will cheer the demise of any of the big 3, generally no one outside of Detroit is going to buy a car simply based on national origin. No One.

  • avatar
    graham p

    Best to build on national interest, and not abuse it.

  • avatar
    jaje

    It’s all excuses – first we have the currency manipulation issues (Bank of Japan hasn’t directly affected changes since 2003 and does on a rare event – we are talking the nation of Japan that has almost no natural resources besides it’s people).

    Next we have Big 2.5 mentality of built it and people will buy it when Toyota & Honda would travel around the US perfecting the product based on real world customer tastes – then building it properly.

    Then we have Big 2.5 excuses that there is a “perceived” quality gap only and not in real life. That’s pretty amazing when you sit in an Aveo and a Honda Fit and compare the two. Or a Cobalt and a Corolla. Get in a Solstice and rev the ecotractor engine then compare it to a Miata or an S2000’s engine. Get real giddy and compare to a Z4 or TT’s engine note. Sports cars are meant to sound like a sports car not just look like them. The Big 2.5 is stuck selling to rental fleets b/c they are the only customers left. Now that they’ve pulled back and rental car companies need cars who will wind up selling to them? Big 2.5 will have to dump its average 1M inventory into the fleets.

    Now it’s patriotism – the last bastion of excuses to buy what you sell. And hopefully the last excuse to buy an average or sub standard car.

  • avatar
    guma

    Mark: I don’t buy into this “posters and editors not being openminded” thing.

    The posters and editors have nothing to do with it. If the business is doing the right thing, people will respond.

    I only hear GM/Ford whining about how the consumers and the evial media are biased.

    Did Toyota/Honda bitch and moan about biased consumers/media in the 70’s when they were trying to overcome their reputation as rustbuckets? No, they did their product do the talking.

    Did Hyundai bitch and moan about biased consumers/media while trying establish their reputation after the crap they sold in the 80’s? No, they did the product do the talking.

    The odd thing is that, the more Detroit complain about the biased consumers and the media, the more I give them less credibility. Let the damn product do the talking, and not the PR droids! Consumers are not fools, despite what marketing folks think.

  • avatar
    graham p

    It would be interesting to hear more about the alleged currency manipulation – that does seem to be the most recent excuse i keep hearing.

  • avatar

    Brandon I have heard those arguments repeatedly and typically when we are asked to remember where the company headquarters is located what they mean is don’y buy Toyota or Honda buy GM, Ford and perversely Chrysler. In almost every case when that argument is raised Chrysler is left out because it is a German based company now.

    Better yet I offer you this. Walmart is an American company. It is based in the US of A. The profits go here and build wealth according to your argument. According to you if I buy from Walmart I am supporting the good ol USA. Is that more true than if I buy from 7-11. I beleive that 7-11 was purchased by a Japanese company.

    Better yet, If the majority of items at Walmart by and large are made in China but the profits go to Walmart then by your argument this is a good thing. I have never had anyone of those look where the profit goes posters come up with a good counter argument. If buying a Mexican built Ford is better than buying an American made Honda because of where the profits go, then by that same reasoning buying Chinese made goods at Walmart is also a good thing. Yet strangely the same people who post those arguments never seem to agree. Why is that?

  • avatar

    Brandon D. Valentine: Frank, I agree with the notion that the definition of a car’s nationality no longer includes the location of its production or the nationality of the workers assembling it. But you have touched upon and then entirely ignored over a very important part of that definition. “The location of a car company’s headquarters determines its products’ nationality.” This is vitally important and you have dismissed it as irrelevant. At the end of the day, what matters more than where a car was assembled or by whom, is where the revenue and hopefully profits from that car’s sale end up. So if I understand what you're saying,  the only thing that matters is if the head office is in America and that they get the profits.  Following that line of reasoning, no one should buy a Chrysler or Dodge because ultimately the the revenue from those sales ends up in Stuttgart in the coffers of DaimlerChrysler. That would leave the vehicles made by Ford and GM as our only choice, and it doesn't matter whether the money paid for assembling them goes into American, Korean, or German pockets, so long as the profits from the sales end up in Detroit.  I'm sorry, but I can't buy into that line of thought.

  • avatar
    hondaboy55

    Guma is right, If F, GM, and C are making better products, they will have to sit on their current, or falling production numbers until thier products show their stuff. I was surprised to hear in one news report from the detroit auto show that in the new chevy something (sorry don’t remember but its an old name reinvented) in that car they are spending an extra $200. on improved materials for the interior. For me this is almost a Bold Move in admitting they need to improve quality, and yes they still do.

    Guma is right, GM, F, and C are where Toyota, Honda, and Hyundai were years ago, now they need to get-er-done!

  • avatar
    guma

    Brandon: “The truth about cars is that if you buy Japanese your money supports the Japanese economy and builds wealth for the nation of Japan. If you buy American, your money stays within the United States and builds American wealth.”

    But what if the Japanese car was designed and built in the US with more US contents than the so called American car?

    And also note that it’s not like Japan is some evil empire; it’s one of the best US ally. In addition, it’s in the Japan’s, as well as the Japanese auto manufacturer’s best interest for the US economy to remain strong.

    Plus, as Hondaboy said, we can buy ADR’s for the Japanese companies here.

    In short, I thought the whole point of Frank’s article is that everything is not as black and white as a lot of flag wavers portray the issue to be.

  • avatar
    hondaboy55

    What we need is for someone (Robert, Frank) to go to a few dealers F, C, GM, H, T, Hy, and do a survey. How informed are customers on origin of parts, assembly, and include customer loyalty, all the topics discussed here. And report back here on it. and respect the fact that they will be able to do it unbiased, and lets see what they say. Lets see just what the average customer takes with them as fas as knowledge goes when they go looking for a car. Maybe this stuff only enters into only a few shoppers minds.

    howboutit guys…..

  • avatar
    Lichtronamo

    We bought our Honda Accord because we thought it was a better car than anything out there (including GM or Ford products).

    I bought my Nissan Maxima because I liked it.

  • avatar
    Luther

    First thing I would do as Dictator of the world is to resign… But before that I would force every auto manufacturer on earth to headquarter on the Principality of Sealand just to quell the nationalistic nonsense… Oh, and before I resigned I would use a cigar on a young intern in a blue dress. (I would not make a good dictator because I have zero desire to kick other people around BTW)

  • avatar
    Adrian Imonti

    Brandon D. Valentine:
    –At the end of the day, what matters more than where a car was assembled or by whom, is where the revenue and hopefully profits from that car’s sale end up.

    If your concern is with the economic benefits of automaking to the local economy, this statement couldn’t be further from the truth.

    Take a look at the financial statements of your typical automaker (or, for that matter, any large manufacturing company outside of high tech), and you can see that very little of the revenue generated by these companies results in profit. (In the case of GM and FoMoCo, there are currently zero profits, which means that the taxpayer is effectively subsidizing their continued existence.)

    Most of the revenues — over 90% — go out the door in the form of expenses. Most of those expenses are spent on components, labor and taxes, in that order. From an economic standpoint, the greatest impacts of those revenues will be felt where the factories are located (that’s where the workers are employed) and where the parts are purchased. Most of those parts will likely be built within a reasonable radius of the factory.

    The tiny fraction of money that remains as after-tax profit will largely be reinvested into activities that, if successful, will help the company to grow. Much of that reinvestment goes into new plant and equipment, and acquiring other assets. Some of it goes to the investors in the form of dividends.

    Armed with these economic realities, take a step back and look at the implications of this reality:

    -The main sources of economic benefit to the greater economy are where the parts come from and where the workers are employed. You’re doing far more for the US economy by buying a US-built Accord or Camry than you would by buying a Korean-built Aveo, Mexican-built Fusion or Swedish-built Saab.

    -The main benefit of the profit component comes from the choices made by the automaker to reinvest them. The US gets far more benefit when Toyota, Nissan, Hyundai build a new plant Stateside than it does when GM blows $4 billion on a failed acquistion of FIAT, or when Ford builds a factory in Mexico. And since most of the automakers are publicly traded companies, many of the dividends end up going to institutional investors in the US, Europe and Japan.

    Which leads to this: the American automakers have been busy firing workers, shutting down local plants and looking to shift their operations elsewhere, while the “transplants” have been building factories in the US, buying parts made in the US, and hiring Americans who will pay taxes. Where the corporate headquarters is located is largely irrelevant, given that the HQ generates few of the costs and creates relatively few jobs compared to the manufacturing plants.

    The automakers are ultimately loyal to no flag. In a world where Mazdas are built in Michigan, PT Cruisers are built in Mexico, and Chevrolets in Europe are rebadged Korean-made Daewoos, the world is not as simple as it used to be.

  • avatar
    hondaboy55

    Adrian Imonti: 10 points! you very clearly see how production based business makes and spends its money. And has a greater impact locally today with Just In Time inventory.

    Well said!

  • avatar

    Twenty years ago I bought a Ford Taurus. Although it was a decent basic car, it needed further refinement to be truly competitive with the market, and the dealer ‘experience’ was absolutely crap. I wrote to Senior Ford management (Hal “Red” Poling) at the time and suggested they owed this car and the folks who designed an built it the time and money to make it truly world class. It was at the time the best selling car in America. Unfortunately for Ford, they put their money and time into the ‘short-term-profit’ Explorer and not into the Taurus. They are living today with the long term results of poor product development.

    A few years ago, I had several opportunities to rent a Lincoln LS, another really decent car which needed only slight refinement to be truly competitive in its market. My feelings prompted another letter to senior management at Ford.

    Neither of these letters to Ford ever received a response.

    My choice, as an American, is to vote with my wallet; every time I’ve bought a new car in my adult life, I’ve looked at the domestic offerings and found that they simply did not deserve my support.

    Just as no one would today say that a 1940’s German citizen was ‘unpatriotic’ if they did not support the Third Reich, so to will future Americans see those of us who demanded excellence from our car companies, our manufacturers (and our leaders), yet found it wanting.

    Nazi Germany and Stalin’s USSR proved that flag-waving and appropriate action are not the same thing.

  • avatar
    hondaboy55

    Basic transportation includes wheels, engine, transmission, doors, etc. Todays cars are advanced means of transportation. They all include advanced fuel delivery, and management. Brakes are more refined and very precise technical things. Engines now consist of composits, and aluminum alloys, etc.

    To call a Taurus a basic car means it passes the engine, transmission, doors test as in “these items are prefected” lets move on. The Taurus failed big time on one of the basics, its transmission was a joke from day one. Chevy made a car in the same time period as the early Taurus, and the doors fell off because they choose to glue them on.

    Sorry to say, but many US and A cars fail at just being “basic” in the term basic transportation. Basic transportation is something you can depend on to get you to work. I think its one of those basic expectations from a car in this day that our domestic name plated manufacturers have failed to deliver on.

    And yes there are exceptions, and there are the real dogs. But one of the best selling fords of recent times had soooo many disapointing experiences behind it, that they will have to deliver a product not “as good” or even “better than” the transplants, but for many of us will have to be “Much Much Better” than….. to be considered.

    Unfair or not, it is what T, H, N, and Hy have delivered as they grew to gain many of our sales and loyalty.

  • avatar
    starlightmica

    We’ve bought 3 new cars in the past 5 years, as a result of getting married and having kids. The old cars simply weren’t big enough for the job.

    Fall 2001: was there a 2.5 budget family sedan with ABS and side + curtain airbag? No. Heck, Chevy was pushing the Impala with just a driver’s side only airbag, something about liability and small front passengers leaning into a side aibag during deployment.
    Spring 2004: was there a 2.5 minivan that had side curtain airbags, traction control, ESC, and could hold 8? No.
    Winter 2007: was there a 2.5 budget vehicle that could hold 3 large car seats? No.

  • avatar
    Justin Berkowitz

    Two authoritative scholarly articles on the topic – don’t let the dates of publication fool you, they are just as relevant today:

    “Who is US?” by Robert Reich, Harvard Business Review (Jan-Feb 1990, pp53-64)

    and the response:

    “We are US: The Myth of the Multinational” by Ethan Kapstein, The National Interest (Winter 1991/92)

  • avatar
    Justin Berkowitz

    forgot to mention – if anyone wants the text of those articles, email me at (name- all one word) at yahoo.com and I’ll hook you up.

  • avatar
    Mark

    Edgett: “My choice, as an American, is to vote with my wallet; every time I’ve bought a new car in my adult life, I’ve looked at the domestic offerings and found that they simply did not deserve my support”

    Brilliant post and my point from the start. If every buyer was as openminded as Edgett (he will look at American Cars), MOVING FORWARD….Ford and GM will be better off. Ford and GM’s responsibility is to make competitive cars….it is my belief that they are currently taking steps in this direction.

    As far as balanced reporting in the mainstream press against American Auto companies…I believe it exists. Some of this is deserved given their arrogance during the 70’s-90’s. But come on folks—-if GM had to settle a 3.5 million person class action lawsuit like Toyota recently did for engine sludge—it would be front page NYT and first strory on CBS. Additionally, if GM Rick had to resign in disgrace over sexual harrassment—like the former head of Toyota”s US operations did—-it would have been front page scandal news. It is not media balance when neither of these recent Toyota embarassments did not make the mainstream press.

  • avatar
    Rastus

    I love this idea of having an “open mind”.

    Yet the very REASON GM and Ford are doing as well (if you wish to call it that) as they are is due to having a CLOSED mind.

    The generation which consists of loyalists …those individuals who will buy ANYTHING and of ANY QUALITY which GM and Ford spit out…that generation and warped mindset still exists today!

    Just know that that pool of individuals is shrinking. Most of those individuals are in their 60’s and will be dying off shortly.

    So, how can GM and Ford (notice I fail to mention Chrysler…they really aren’t worth mentioning, now are they?)…how can GM and Ford ask you to “open your mind”, when the very fact they are still alive and breathing (albeit on life-support) is due to having a CLOSED MIND?

    All’s well that ends well…right?
    (And it’s all ending quite nicely…Adam Smith himself would be proud).

  • avatar
    hondaboy55

    Mark; not to backtrack on the whole nationalism discussion but While we know the names of our local auto manufacturers presidents, or CEOs. I can say that while my cars of choice are Honda, I don’t know any of the brass over there. And the company headquarters as far as I know are thousands of miles away.

    In addition, in the Dakota/Durango story I saw on tv which included the ball joint/wheel collapse recall, The news media was directly involved. The TV story was perhaps covered in more detail because our anchor had one of the cars in question, and had a bad experience with it. It was a local story that was found to be a limited national issue.

    My brother has one of those Toyota trucks with the engine sludge problems, and his does not have any sludge.
    One reason may be but not only that he is old school 3,000 Mile oil change. He/We also accelerate less than moderately, thus limiting blow by. Same with the Chrysler oil problems, some are fine, many have failed. Some of the media focus is not just the problem, but how its handled. Toyota was taken to court over it possibly in part because engine failures are not as common in toyotas, and as such much less tolerated. They may and most likely were arrogant in their own right because of their standing in reputation. They were rebuked in court and I’m sure they learned from it.

    I would imagine the Toyota CEO resignation was in fact front page news in Japan.

  • avatar
    hondaboy55

    Rastus also makes a very good point. Adam Smith wrote the future of our domestic name plated auto manufacturers. Also that guy that was featured on PBS years ago who tried in vein to sell detroit on a quality feeback loop for their companies.

    I wish I knew his name or could remember him, but I can’t maybe someone knows and can help out here.

    I think it was in the 60’s maybe even earlier.
    He wrote a book about new manufacturing principals including problems in design, and constant product quality feedback. Funny he was as I remember American, but found his only audience in Japan.

  • avatar
    Rastus

    http://www.amazon.com/Out-Crisis-W-Edwards-Deming/dp/0262541157/ref=pd_bbs_sr_1/104-5850995-8926319?ie=UTF8&s=books&qid=1173033291&sr=8-1

    His name is Deming. Back in the late 60’s and 70’s he tried his damndest (is that spelled correctly?) …he tried like hell to sell his message to Detroit.

    Nobody would give him the time of day.

    So he packed up his stuff and went to Japan.

    The results speak for themselves, yes? :)

    Arrogance will bite you in the ass every time.

    So PLEASE…keep a CLOSED MIND, people, and trot on down to your local Chevy dealer. They NEED more people like yourselves…be good little sheep, hear?

  • avatar
    Rastus

    And please…not the title of the book.

    GM and Ford…well, they prefer to STAY in their little crises modes…I guess a crisis is their “comfort zone”.

  • avatar
    hondaboy55

    Thank you Deming was his name. now I remember.

    Rastus… I lost a set of keys……

  • avatar
    Rastus

    That’s ok…losing a set of keys is quite a minor thing.

    Losing an entire generation of customers (for life) is quite another story! ;)

    Cheers!

  • avatar
    NamDuong

    American autocompanies should just stick to SUVs and trucks!

  • avatar
    wstansfi

    Frank – I believe that your article is an excellent rebuttal to the car connection article, which is skimmed through the other day. I disagree that that article even needed a rebuttal. At the end of the day, the real question is: If you buy an “American” car just because you believe that it’s more “American” than some other car, even though it doesn’t deliver the same value, then how are you “supporting” that “American” car company? That’s not support… that’s contempt!

  • avatar
    Mark

     All- Jim Press (you may have seen him lately) is the new head of Toyota's US Operations. He succeeded the former head who resigned due to sexual harassment that occured in the US !! Not surprising that you don't know this as TTAC and the mainstream press did not cover it. I 'm not asking the US mainstream press to be mouth piece patriots for the US auto industry they either recover on their own merit or they die—-I just want balance. Sexual harassment from the Toyota US head—you can hear the crickets chirping. If this was GM Rick—–well you know the rest of the story…it would be the headline on the next TTAC GM Deathwatch

  • avatar

    Mark I read about the sexual harassment suit. I also read a lot of claims of media bias on the detroit news website. Having said that I am not sure where you hail from but if you are from Michigan I have an explanation for the “media bias” claim that is often put forth.

    I live in Tampa Florida. We have several major theme parks in Orlando and 1 in Tampa (Busch Gardens). Unfortunately every now and then someone is either kiled or maimed at one of these theme parks. Everytime it happens, guess what, it is front page news here in tampa. Likewise when some is killed or maimed at a theme park in Geogia like six flags or Knottsberry farm or Disneyland in California there is only a little paragraph on page 7. This does not mean that the media in Tampa is biased against Busch gardens in and only gives favorable coverage to six flags.

    Yet those are the ridiculous claims I always read on other forums. Generally on places like autoblog and of course here and other places you will see equal coverage. If the president of Hyundai is in trouble they post it, If Mark Fields gets a bonus they post it.

    Again I do not know where you live or if you have any connection to the domestic car industry. But in my opinion the pity party that many domestic car employees carry on about is not helpful but actually highlights the problems the domestic industry is facing. In all too many cases they do not own up to their own failings and instead come up with scape goats. The media is not the reason people have turned away from the domestic car makers.

    Yesterday in response to Consumer Reports release of reccomended reliable cars report GM responded. According to GM their warranty claims are down 40 percent compared to 5 years ago. Now I ask if their warranty claims now are down 40 percent from 2002 then what does that say about the cars that GM was making from 1999 to 2002. Does that not also validate the claims of many that they have had more reliabilty issues with GM than with Toyota or Honda. Yet upon mentioning CR all you hear is “they are biased”. The seeming total inability of the culture of the domestic auto industry to even acknowledge their current shortcomings is astounding. Instead anyone be it a magazine a blogger or just a person is labelled with “Oh you are biased so your opinion does not matter.”

    GM Ford etc will only recover if they win back people who do not like their cars. There are not enough domestic loyalists for lack of a better term for them to continue to ignore media or people that voice criticisms.

    the

  • avatar

    Thank you, Messer. Williams for a thoughtful counterpoint to the propositions put forth by Messer. Witzenburg.
    Having such national debates in the media (at least on the ‘Net), is a vitally important part of our democracy.

    My comments:

    In his article titled “What is an American Car?,” Messer. Witzenburg states:
    “…import vehicle makers began achieving serious penetration of this market during the fuel-crisis 1970s…”

    The question begs to be asked: How did the foreign auto makers penetrate the U.S. auto market in the early ‘70’s? Could it be that most fuel-efficient cars were more than likely made by companies based off-shore?

    Messer. Witzenburg goes on to state:
    “Because our domestic makers during the 1980s and ’90s were not especially worthy of protection.”

    Translated into plain English (a.k.a. the Truth), this means the U.S. auto makers were building cars that were simply not competitive with some foreign-made cars. Consumers here noticed, and voted with their dollars.

    So for thirty long years (the 70’s, 80’s and 90s), many car buyers in the U.S., who valued economical and reliable autos, found what they were looking for in cars made by companies based outside of the U.S.A.

    Thirty years, a time span covering what I would define as “prime time” for marketing to the baby boom generation (and sewing the seeds for generations beyond). A time span where, by his own words, Messer. Wizenburg tells us that American-based companies were simply not competitive for one reason (fuel efficiency), or another (product quality).

    If we include the late ‘90’s into the 2000’s, when Detroit left the mid-size-, and especially, the small-car market to others, an instead focused on SUVs and pickup trucks, one could argue that the time of ignoring at lease certain market segments expands to four decades, or forty long years. In the marketplace, steadily loosing customers for such a long time span makes overcoming a competitive disadvantage nearly insurmountable.

    Finally, near the end of his article, Messer. Wizenburg states:
    “And should Americans buy “American” out of patriotism. No, but they should carefully consider U.S.-brand vehicles – now that most are competitive or better in design, engineering, quality, and fuel economy – out of their own economic self-interest.”

    Cars now being built by American-based companies may (or may not) be “…competitive or better in design, engineering, quality, and fuel economy…,” but when companies allow 30 or 40 years of opportunity to go by the boards, can you really feel sorry for them?

    Compelling as the case may be (i.e. American job counts), the Truth be told, who is at blame? Is it the American consumer, or the companies that ignored the needs of many of their customers for so very long?

  • avatar
    Mark

    I do not think anyone is denying that the US Auto industry is to blame for the mess they are in….nor should anyone feel sorry for them. Car purchases at the end of the day are usually for very personal and self interested reasons.

    Mr Wizenburg clearly backs this position:
    “And should Americans buy “American” out of patriotism. No, but they should carefully consider U.S.-brand vehicles – now that most are competitive or better in design, engineering, quality, and fuel economy – out of their own economic self-interest.”

    “Carefully Consider”—is much different than saying anyone that doesn’t buy american is unpatriotic.

  • avatar
    tony-e30

    After serving in the US Navy Submarine Service for 8 years and now working on the civilian side of the sector, I consider myself as patriotic as the next guy. I also would consider buying an American made (how many really are?) 2.5 product in an effort to support my fellow Americans, even though I consider the products substandard when compared to German and Japanese efforts. What I really can’t swallow is the massive depreciation incurred the moment I drive off the lot in my Mellencamp-mobile when compared to the foreign competition.

    Why should I, as a patriotic American, voluntarily pay for the 2.5’s follies? I have no loyalties for any corporation who would have me throw good money after bad and prey on my patriotism in an effort to get me to do so.

  • avatar

    Mark: “Car purchases at the end of the day are usually for very personal and self interested reasons.”

    Mr. Wizenburg: “…they should carefully consider U.S.-brand vehicles…out of their own economic self-interest.”

    What consumers do, and what Mr. Wizenburg advises (i.e. “carefully consider”) seem to be at odds.

    It’s reality vs. what someone would like them to do. Advise away, but I just don’t think it’s on many consumers radar when selecting a new car.

    FWIW: My earlier post had an extra “e” in Messr.

  • avatar
    craigefa

    “Is it more important to the U.S. economy for someone to buy a Ford Fusion, although it’s built in Mexico, from a company that employs 105,000 Americans than a Honda built in Ohio from a company that employs 27,000?”

    Frank, I think your rebuttal to this argument is great, but I’d also add an individual car purchase has a limited benefit. If you buy a $15,000 car, that $15,000 only goes so far. A company that employs 105,000 people doesn’t take that $15,000 and magically make it feed more families than the company that employs 27,000.

  • avatar
    zelmo

    I’ve owned both foreign and domestic vehicles, but currently own three domestic. My most recent purchase, a 2006 Buick is the best car we’ve ever owned. Our BMW we traded was a great car, but this is better. We bought a Buick because we wanted to support General Motors. Why? They deserve our support. Buick is one of the top brands in reliability as found by JD Power, beating Toyota, Honda, Infiniti, Nissan, and every Japanese brand but Lexus. Also, GM’s woes effect the economy all over the country. Some of the Japanese makes may be building factories here, but they will never be able to replace the jobs the domestic makes provide. The white collar jobs in development, marketing, etc. are in Japan and will always be. Choosing to buy a foreign car isn’t necessarily unpatriotic, but hoping for the demise of your country’s biggest employer and taxpayer certainly is.

  • avatar

    Quote: “And I expect the vehicle to last more than 10 years, and have a 100,000 mile “gas and go” period”

    That’s an interesting way to put it. I have owned 6 Big 3 vehicles and none have come close to that standard.

    I really doubt anyone WANTS to see the Big 2.43 fail, but after bad experiences I think most people have to say, well, duh, I told you so.

    Any time I buy something I am creating work there and not at the places I chose not to buy. I have to buy what I need and can afford.

    John

  • avatar
    Mark

    Zelmo—I could not agree with you more. I have owned foreign cars and now drive domestic. I traded in my BMW 3 series that left me stranded on the Penna Turnpike with a blown water pump at 47K Miles for a 2005 Ford Mustang that has served me flawlessly through 20,000 miles.

    There are us out there who do see the economic self interest of the US at stake as it relates to the US Auto Industry. Sadly, this line of thinking seems lost on so many of those who claim to have the intellectual high ground.

  • avatar
    tech98

    I've seen enough auto reviews, and also from personal experience, that domestic cars have on average uglier, cheaper-looking interiors compared with Japanese and European cars of the same class. They also have substantially uglier, cheaper-looking interiors and exteriors than GM and Ford-built cars from Australia and Europe — so it seems it's not a matter of lacking design capabilities but a dysfunctional, overly bean-counter-dominated development process for North American vehicles with a cynical choice to cut corners and cheapen the product and hope the consumer doesn't notice amidst the bombastic flag-waving commercials. I've had enough bad experiences with domestic-brand autos to make me wary, but not to put me off forever. To be fair, some GM vehicles seem to be improving in the Consumer Reports reliability stats in the last couple of years. If they can keep this up and stop making products that feel so cheap and nasty, then good luck to them.

  • avatar
    Adrian Imonti

    Mark:
    –There are us out there who do see the economic self interest of the US at stake as it relates to the US Auto Industry.

    Toyota, Honda, Hyundai and several other “Asian” automakers **are** part of the US auto industry. They operate factories here, purchase parts that are made here, employ workers here and pay taxes here.

    And while the transplants are increasing their stake here, as the “domestics” are reducing theirs. At this juncture, GM builds over 50% of its cars outside the US, and is increasing that number. You can bet that the cash generated from buying GM and FoMoCo will be diverted to building more foreign operations that will ensure that less labor is used in the US, Canada and Western Europe, while capacity is expanded in South Korea, China and elsewhere. The writing is on the wall, and it ain’t painted in red, white or blue.

  • avatar
    Landcrusher

    Sadly, I feel more connected to the capitalists at Toyota and Honda than the socialists at GM and Ford. Trying to use nationalism to sell product only drives this home harder. Yuck!

  • avatar
    John

    I read the original piece sometime ago and noted the same logical fallacies. By Witzenburg’s logic, 2,000 Toyota workers can outproduce 10,000 GM workers. He further claims that it is our patriotic duty to support those 10,000 ineffective workers with our hard earned money.

    The idea that the 2.5 now make some good products and should be given a chance doesn’t fly. I’m reminded of the first commercial passenger jet airliner, the De Havilland Comet. It was a big success early on, but then they started litterally falling out of the sky to to insufficient allowances for metal fatigue in the design. By the time De Havilland had the problems figured out, Boeing and McDonald Douglas were also selling highly successful jet aircraft and De Havilland was never again a major supplier of commerical aircraft. “We fixed most of our problems, so trust us again.” This is an argument which doesn’t cut it.

    For more on the Comet, see: http://www.pbs.org/kcet/chasingthesun/planes/comet.html

  • avatar
    Mark

    Adrian: Toyota, Honda, Hyundai and several other “Asian” automakers **are** part of the US auto industry. They operate factories here, purchase parts that are made here, employ workers here and pay taxes here.

    And Adrian…if you think that the above mentioned automakers stay in the US if it puts them at a cost disadvantage you are very naive….they would leave in a second so think twicw beforew you raise them as the holy grail.

    To all…I urge you to read about real nationalism at work and bone up on how the Japanese government and people support their auto industries through tariffs and currency manipulation. You will see real nationalism at work….not the banal / created stuff most on this forum seem to have such contempt for. In the big picture—-who really cares about mellancamps sappy song and whether it sells trucks or not. There are more substanitive issues to talk about.

  • avatar
    Johnson

    Awesome article Frank, you hit the nail on the head.

    The key point is that foreign automakers are not destroying jobs, but rather it is the Detroit automakers that are destroying their own jobs, through several decades of accumulated ignorance, arrogance, and short-sighted, narrow minded thinking. This includes selling their soul to the UAW.

    And guess what? Japan has unions too, and companies like Toyota and Honda deal with them often. Germany has unions, and Mercedes and BMW constantly deal with them too.

    And on the topic of foreign automakers, why did Mr. Witzenburg only focus on Japanese automakers? Why weren’t BMW or Mercedes mentioned? What about German “Saturns”, and Australian “Pontiacs”? Are those not foreign cars? Was BMW and Mercedes too cool to be mentioned in this article? Or is the real reason because they aren’t a concern of the anti-Japanese bandwagon Witzenburg (along with many others) is riding on?

  • avatar
    Luther

    Rastus: Every Engineer/Scientist understands the concept of feed-back loops as a critical method of eliminating divergence and thermal runaway and hence customer runaway. Deming tryed to explain the concept to a bunch of American MBAs whose heads would explode before they would be able grasp the concept. Deming found acceptence in Japan because he was dealing with Engineers and Scientists there who could easily apply these engineering concepts to business and customer relations. Point is: Deming was not dealing with arrogance in the US as much as he was dealing with ignorance. These patriotic types are basically saying "It is your patriotic duty to pay more for less". I wish my customers were more "patriotic"! Every time I try and get them to pay more for less they fire me. There is nothing worse (psychologically speaking) than being fired by a customer. I hate customers… Talk about necessary evil.

  • avatar
    kablamo

    Mark, the government of Japan doesn’t have any tariffs on imported automobiles.

    http://www.apectariff.org/tdb.cgi/ff3235/apecfind.cgi?JP+8703

    The USA does have some:

    http://hotdocs.usitc.gov/docs/tata/hts/bychapter/0600c87.pdf

    Regarding currency manipulation, it’s a more complicated matter. Japan (and China, and Korea) hold foreign currency reserves, consisting primarily (still) of US dollars. These are worth hundreds of Billions, if not Trillions (one Trillion being 1,000,000,000,000.00$ – a lot of zeros). They buy US government debt. To put it simply, this keeps US interest rates low(er), it keeps the government’s deficit from eating up a large part of private liquidity in the US economy, and it allows continued growth of the overall US economy by funding American government, personal and corporate debt.

    Much like the situation with Chinese currency and goods, the mechanism that keeps these foreign currencies low also allows continued borrowings by governments and companies. This follows through to consumers, who, with access to more and more credit cards, easier mortgages and home equity loans, keep US GDP growing and the economy chugging along. Ending all currency manipulation to save the auto industry would have ripple effects that could be far worse that GM or Ford going out of business.

    Although this kind of discussion moves away from the automotive sector, currency manipulation by other countries does affect, even, support the leveraging of US assets which is what many would say is what is keeping the economy growing at all. Unfortunately with a budget deficit of hundreds of billions, the government isn’t in a position to be too picky about who buys US dollars.

  • avatar
    Maxwelton

    Thanks to all commentators for a level-headed and interesting discussion. And kudos on the article, well written and thought out.

    I never buy new cars, preferring to let someone else take the initial depreciation hit, but my wife and I are completely open to any brand when we’re shopping. Ford, Chevy, Honda, Toyota, Subaru…almost anything but BMW (mainly that’s the only brand of car any of my friends have had horrible experiences with).

    I think the minivan was the last great “we’re doing something no one else is” moment for the domestics. My wife always drives a small or mid-size wagon. There just aren’t any domestic choices that fill the bill as well as the Subaru she now drives. For me, I’m willing to consider anything, but normally its some well-used “enthusiast” machine that are now dirt cheap, and since I can’t get over image problems with the Corvette, that leaves me looking at European stuff, usually.

    I find it extremely telling that the top dudes at the “US” companies seem to make anywhere from 10 to 20 times the amount per year than their counterparts at their Asian competitors. Why would I work for a company, or admire their management, when they all make in a day what one of their line-workers makes in a year? From a customer’s perspective, that line worker is much more important than the golf-player jet-setter at the top.

  • avatar
    Alex Rashev

    It’s kinda strange, people say that buying Japanese sends profits to Japan, despite leaving production costs like parts and labor in the US.

    Following this logic:

    Say, Toyota and GM decided to sell a truck.

    Say, both spend $20K making the car, all done in the same country (doesn’t matter which one). Now, Toyota charges $22000 and GM $18000. That means that Toyota sends home (Japan) 2K of profits, and GM, guess what, sends $2K worth of losses to its homeland, US of A. That’s assuming both spend the same amount of money building the rigs in the US. The late trend has been that the Japanese spend way more dough in here than the Big Three, per car.

    Now, I don’t know what’s better, sending profits to Japan, or funding losses in the US.

    Japanese will definetely turn these profits over by building more plants, research facilites and dealerships all over the world, and, hopefully, over here, too.

    American companies, on the other hand, will stockpile their losses until it all explodes in one huge boom, making hundreds of thousands of people jobless overnight. Those people could be working for Toyota by then, IF flag-waving patriots would buy Camrys instead of Impalas.

    Therefore, if you’re a patriot with a brain, you would suffocate the Big Three by NOT buying their cars no matter what, because that’s the right thing to do for your country.

    “Don’t think of it as suicide. Think of it as euthanasia.”

    In the end, I believe the right thing to do is to just admit to yourself that the “Made in America” issue is too vague to influence your buying decisions. Buy the car that suits you best, and be happy about it. Leave prejudice for the ignorant.

  • avatar
    Luther

    Sherman Lin: According to GM their warranty claims are down 40 percent compared to 5 years ago. Now I ask if their warranty claims now are down 40 percent from 2002 then what does that say about the cars that GM was making from 1999 to 2002. Good Point. With this statement it appears GM is recovering from denial. This is a really good sign.

  • avatar

    If you look at the governments of major export nations, they are working diligently to see that their products and their corporations get a fair shake in the international market. This amounts to “National Security” in most places outside of the U.S. Our government equates national security with building more and higher technology weapons in a world where we have already won the military ‘defense’ battle, but are rapidly losing the mercantile ‘offense’ battle. This is not an issue of parties, as both Democrats and Republicans have been supporting the best military in the world while neglecting the need for a strong manufacturing base. Why are U.S. executives paid salaries which are multiples of those in Japan, or Germany or the UK? Does this really attract the best talent? If so, why don’t we see the results in our manufacturing sectors? Instead we see the partners at Goldman Sachs splitting 11 billion dollars, yet they produce absolutely nothing – no R&D, no product, no investment in the future.

    Fortunately, this remains a democracy and the very people whose lives are affected by this still have the opportunity to do something about it. This forum has an amazing amount of energy – what if some of that went toward reminding our representatives just WHO it is that they are representing?

    It’s sickening to watch these once vital companies, GM, Ford and Whatever, wither away while we argue over which set of demagogues have the ‘right’ answer. The right answer involves an investment in future jobs, incentives to manufacture world-class products and strategic long-term planning. Japanese and German products today enjoy unique characteristics which came about because civic and business leaders understood that their survival required a partnership which created real value in the eyes of the consumer.

    And Robert, I hope I passed your political litmus test – leadership works from the top down.

  • avatar
    ZoomZoom

    edgett:

    “Fortunately, this remains a democracy and the very people whose lives are affected by this still have the opportunity to do something about it. This forum has an amazing amount of energy – what if some of that went toward reminding our representatives just WHO it is that they are representing?”

    Okay, you’ve got me on this one. Contact our representatives and tell them what?

    I’d tell them to stay out of the private sector because the first thing every piece of new legislation seems to do is screw something up. The second thing it does is NOT accomplish what it was supposed to accomplish. The third thing it does is cost you and me MORE MONEY, either in taxes, increased regulation, or some other unintended cause-effect relationship that always gets handed down to the investor/taxpayer/consumer.

    “STAY AWAY” is what I’d tell them; you’ve “helped” us FAR TOO MUCH already!

    Each house of Congress is mostly made up of LAWYERS. I think that’s enough reason right there to keep them out of the Capitol. I hope any counsel reading my post will understand where I’m coming from.

  • avatar
    ZoomZoom

    Great article, Frank.

    I am as patriotic as they come. I actually take my American Flag down in inclement weather.

    But trying to play on my patriotism will only get me angry. It’s sickening and it makes me viscerally angry beyond measure.

    I’ve dumped girls who play psychological games! I’ve dumped family members for the same egregiousness!

    Psychological games always piss me off and will only serve to give me reason to hold my current grudge against GM, F, and C.5 even longer.

    I mostly buy used cars, so I don’t know that “buying American” matters all that much with respect to the topic of “supporting America.”

    However, I have bought two new ones in my entire life, a Miata and my current Prius. In both cases, I had decided on the car right down to paint color and option package before I even stepped foot on a dealer’s lot. I didn’t need to shop except for price and availability.

    My next car will probably be a second car to the Prius and will likely be a small roadster; probably a used BMW Z4 or Mazda Miata. My last GM car was a Corvette. After the dealer’s service department’s psychological gamesmanship, I decided that I will never buy another GM vehicle again, new or used.

    I know, “never is a long time.” And that is exactly my point. I was so beaten, battered, and wounded by this dealer’s incompetence and gamesmanship that I decided that “never” is actually “doable” for me.

  • avatar

    My thoughts exactly Zoom Zoom, the problem with people assuming that either the politicians are the problem or that we can remind the politicians that we are the boss is the basic problem that we do not all agree on the problem let alone the solution.

    I would never support anyone who would impose tariffs just to help GM or Ford. I like lower prices and I recognize that the problems that the domestic automakers are having are entirely their own fault despite all of the scapegoats that Detroit likes to dig up. I also said it before and I’ll keep saying it why would anyone begrudge Toyota or Honda for their success. They have earned it.

  • avatar
    paul

    Mark sez: “if you think that the above mentioned automakers stay in the US if it puts them at a cost disadvantage you are very naive….they would leave in a second so think twicw beforew you raise them as the holy grail”

    And GM/Ford/Chrysler won’t? What’s GM doing in Canada, Korea, Mexico? Where’s the engine for the Equinox made? It’s not like the so called “domestics” actually care about the well being of their American workers. Only reason they are stuck here in the US is because of the UAW extortions, which, by the way, is slowly killing them.

    They are all businesses, out to make money.

    We should support businesses willing to invest in our economy, be it GM, Toyota, Hyundai, or whatever. I just don’t see GM/Ford being one of them. They sure talk the talk, but they don’t walk the walk.

  • avatar

    “We should support businesses willing to invest in our economy, be it GM, Toyota, Hyundai, or whatever. I just don’t see GM/Ford being one of them. They sure talk the talk, but they don’t walk the walk.”

    Paul – this was my point exactly. Our tax laws and our accounting laws are structured to reward those who do not invest in the long term health of our economy. And, there being no shortage of sociopathic robber barons in any society, they do what they do best by emptying the till – all under the watchful gaze of our lawmakers.

    Imagine what would happen if the tax laws were revised to reward companies and their executives for capital applied to R&D (or punish those who did not through higher taxes)? Imagine if accounting standards were changed so that only the first $500,000 of executive compensation was deductible to a company? What if stock gained through options could not change hands for ten years? Tariffs are not the answer, but intelligent laws which promote strategic thinking in business do the inverse – products are improved because the tax structure pushes investment in the product.

    I’d love nothing more than to walk in to my GM or Ford store and find a car which was as thoughtfully designed as my S2000, or the Acura TL I currently drive. Are there basic components in any Honda, Toyota or BMW which Ford or GM are unable to fabricate? The old-tech aluminum V8 in a modern Corvette makes more horsepower per pound than anything produced by Porsche, and produces better gas mileage to boot. So why does GM’s Ecotec 4 still compare unfavorably to equivalent engines from Toyota or Honda?

    The reason that lawmakers screw things up is simply that we allow it. When any intelligent person could see that it was a bad idea to reward those who pushed vehicles with a GVW in excess of 6000 pounds, our lawmakers were giving tax breaks to those who bought them. And these tax breaks were not limited to the first 65,000 cars, as those tax breaks were for hybrid vehicles.

    Vote with your pen!

  • avatar
    jerseydevil

    One of the things I like about being a US citizen is that i can buy whatever the hell i wanna buy.

  • avatar
    seldomawake

    Maybe someone should mention to Witzenburg that competition is patriotic?

  • avatar
    seldomawake

    jerseydevil: damn straight!

  • avatar
    WhiteGrace

    I’ve said it before and I’ll say it again. Since longer than I can remember European and Eastern car makers produced/produce automobiles for people and their transportation. The domestics just produced cars to move their stock price. Period. Thanks.

  • avatar
    TeeKay

    The issue is not whether the public is “open-minded”, “anti-domestics”, or “pro-foreigner.” It’s just basic common sense and experience.

    Many Americans are shying away from domestics because we had horrible experience with them. I stay away from domestics, but I also stay away from French cars, Huyndais (even though its build quality has improved tremendously in the last decade), and Mercedes because of bad prior experience with their quality.

    I’ll buy a good product, not where it’s made. But if it’s MADE in America, all the better.

  • avatar

    Well, lookee here: http://www.drivemalibu2008.com/

    And here: http://www.youtube.com/watch?v=LZMGCye6jvc

    Tell me Chevy’s not behind this.

  • avatar

    I think I just threw up in my mouth a little.

  • avatar
    blautens

    This Car Connection website is awesome! It’s like Bill O’Reilly’s Car Reviews…

    Thanks for the link.

  • avatar
    jerseydevil

    Farago – i am appalled by the anti french bating in the malibu commercial. Now I am even more convinced that I will NEVER buy a GM product EVER. I do not want to encourage this sort of nonsense. I occasionally feel bad about GM’s fall from favor. Now I remember how they got that way!

  • avatar

    jerseydevil: I do not want to encourage this sort of nonsense. I occasionally feel bad about GM’s fall from favor. Now I remember how they got that way!

    Please keep in mind we don’t know that GM is behind that video and web site. There is nothing on either of them that would indicate a direct link. We’re trying to find someone who might know what’s going on and who is really behind them.

  • avatar
    jerseydevil

    oh ok – i will keep an open mind… sounds and looks like a swift boat smear job to me…. i HOPE that we are not gonna sell cars the same way we sell candidates for political office – by negitive ads… dear god…

  • avatar
    Luther

    I doubt GM corporate is behind this. GM would be pro-american not anti-french since GM is a worldwide producer. Looks to me like just a bunch of american car fans (from detroit? UAW?) did this. The tech specs on the Malibu makes it seem like it is going to be a modern/competitive car with decent driving dynamics. (The Acadia/Outlook are pretty well done… Maybe a trend from GM (?))

  • avatar
    GMrefugee

    I doubt the ads are GM sponsored. GM is smarter than that, despite what you have read from all the posts. Looks more to me like advertising students trying to get noticed and hired. Funny stuff although politically incorrect.

  • avatar
    Lamborghini48907

    Yeah what does that guy have to say about GM rebadging Suzuki Renos and Suzuki Forenzas as Buick’s in China?

  • avatar
    starlightmica

    The guy listed as the contact information changed the Gmail address from his name to one that’s not. I Googled the name prior to the deletion as I remember it’s not very common, and all sorts of stuff pops up including current job, prior education, and Autoblog posts.

    Looks like a one-fan show to me.

  • avatar
    want50mpg

    I was just doing a comparison of CO2 emissions for USA versus EU after reading this article: ‘Tough emissions regime in Europe means change or die’ Neil Winton: European Perspective 3/3/07 detnews.com

    According to this story, Europe is averaging 160 g/km CO2 emissions for their vehicles in 2006 with an objective of 140 g/km in 2008. This is proposed to be followed by 130 g/km for 2012. The current average CO2 emissions for the USA is said to be in the range of 260 g/km (or higher), almost double that of Europe.

    The European 2008 and 2012 CO2 limits have dire implications/consequences for Detroit if they can not improve their European technology radically beyond what is being sold in the USA.

    Gasoline
    Malibu (6cyl, 3.5L, A4) @ 25 mpg combined average > CO2 ~ 250 grams/km
    Pontiac G6 (4cyl, 2.4L,A4) @ 27 mpg combined average > CO2 ~ 262 grams/km

    Diesel
    Opel Corsa, MY07 (1.3CDTi (75PS)) @ 51.2 mpg combined average > CO2 ~ 124 grams/km #
    Toyota Auris (1.4 D-4D Multi 5) @ 47.1 mpg combined average > CO2 ~ 131 grams/km #

    Hybrid
    CIVIC (1.4 IMA ES) @ 50 mpg combined average > CO2 ~ 109 grams/km #
    Prius (1.5 VVT-i Hybrid) @ 55 mpg combined average > CO2 ~ 104 grams/km #

    # from: http://www.vcacarfueldata.org.uk/search/

    It is very interesting that the USA CO2 emissions are almost 2.5 times greater than the European averages. This clearly indicates duplicate engine/transmission development efforts!

    The BIG 3 obviously are not giving the American consumer the choice and benefit of these CLEANER and more fuel efficient technologies. It further suggests that if they (Detroit) do not solve the 140 and 130 g/km they will ALSO loose in the European market starting about 2008 or 2009.

    This is a problem that Detroit needs to fix quickly in the USA, Europe, and the World market. The current Detroit problems with be a “picnic on a sunny day in the park” compared to what is waiting in the wings!

    Just think of the money they could save using common “clean and fuel efficient” technologies. Something they obviously have NOT BEEN doing for years!

    ======
    I just completed a further review of the Ford product set for the UK. It appears that out of 171 FORD vehicles listed on http://www.vcacarfueldata.org.uk/search/
    only 13 (7.5%) currently meet the 140 g/km standard for 2008 (that is less than 10 months away). And, of those, only 11 (6.4%) are better than the 2012 limit being discussed of 130 g/km.

    This compares to averages somewhere above 250 g/km in the USA.

    It sounds like Ford is in more trouble in the EU than in the USA.

    I do wish FORD and its’ current and former employees a QUICK and STRONG recovery.

  • avatar
    Glenn A.

    Hey want50mpg? Europe is going to have to do what the USA did in about 1977-1980. DOWNSIZE. A LOT.

    But I lived in the UK in 1976-1977-1978 and can tell you, cars then were a LOT smaller and lighter on average than they are in the UK right now. I know, I’ve been back on “holiday”.

    The thing that hardly anybody is talking about? What are BMW, Porsche, Mercedes, Ferrari, Bentley, Rolls-Royce et al, going to do?!

    I did a little “figuring” myself, from some British car books (including the CO2 rating) and determined that if CO2 were restricted as much as the European Community wishes to do so, that almost none of the current cars for sale in Europe could be sold there.

    By the way, your comments about “drivetrains” of the Europeans vs. USA is missing one rather important factor. The overall MASS (weight) of the respective cars to which the drivetrains are attached.

    Your examples of diesel Corsa and Auris cars vs. mid-sized American cars is not really a comparison, partner.

    The city cars can scarcely hold 4 thin Europeans, never mind 5 corn-fed Americans.

    If GM tried to put the Corsa 1.4 diesel into a Malibu, the car would probably get to 60 mph in about 30 seconds and would be unusable on US roads (you couldn’t get it up to speed on an on-ramp for expressways). Top speed “might” be in the (eventual) range of the average driving speed in Detroit (80-85).

    Now, look at the Toyota Prius. Mid-sized (inside if not out). 5 Americans can fit in, 4 are more comfortable (pretty close to the interior room of the Ford Crown Victoria, within 1″ or less in every dimension, in fact). 104 g/km of CO2, which is less than the current level for the DIESEL SMART CAR according to the book I looked at recently. This was confirmed by Consumers Report – they bought a diesel SMART car in Montreal, brought it over and tested it at 42 mpg ($2.95 per gallon for diesel locally) and the Prius they tested at 44 mpg ($2.51 per gallon for regular gas locally).

    But I agree, the Europeans (and specifically GM Europe, Ford Europe and DCX) are about to be the manure that hits the turbine rotating at high speed, unless they can convince the European Union to back down from the CO2 limits.

    “aintgonnahappen dot com”

    As for Porsche, et al, I read that Michigan’s Governor Granholm is making a trip to Germany to ask for car makers to send work to Michigan.

    The idea of moving BMW and Porsche and Rolls-Royce and other companies to Michigan to build cars is not so far fetched if you think outside the box.

    Why build them on a continent on which they cannot be sold, then ship them to where they are sold, when it costs 20-30% LESS to build them using American wages vs. German wages, and no shipping across the pond is needed?

    A fascinating thought, no?

  • avatar
    Glenn A.

    Mustn’t forget the fact that the Prius is “approximately” 17 times “cleaner” than the last generation Jetta diesel car (which could not even be sold in California or eastern states). I’m not talking CO2 here, but “pollutants”, some of which are “zero” in the Prius because it is not a diesel. (Particulates, is what I’m talking about here).
    Other measured pollutants include unbured hydrocarbons (HC), Nitrous Oxides (NOx), and carbon monoxide (CO), a poisonous gas.

    So – a whole neighborhood of Prius cars is cleaner than ONE Jetta diesel in actual air pollution, and the CO2 level is lower on the Prius too.

  • avatar
    Pch101

    It needs to be pointed out here that US gallons are smaller than are Imperial (UK) gallons. So you cannot compare mpg figures without converting, and the failure to convert these measures results in a lot of misunderstanding and distortion of the results.

    There are about 1.2 US gallons in an Imperial gallon, and a US gallon is about 0.83 of an Imperial gallon. So those European cars that are getting 45 mpg in the UK are actually about 37 mpg in US terms. On the other hand, a US car that gets 27 mpg is getting 32 mpg in UK terms.

    In any case, there are some considerable differences in conditions and circumstance between Europe and the US, so I wouldn’t not expect US roads to be filled with 1.4 liter diesels anytime soon. Fuel costs are not high enough and diesels carry too much of a negative reputation to ever play an important role in the US passenger car market.

  • avatar
    want50mpg

    I fully understand US and Imperial gallons.
    Further, I drive a 1.5 liter gasoline engine vehicle now so a move to a 1.4 liter turbo diesel would be a MAJOR step up in horse power, torque, and MPG.

    The non-domestestic (US) diesels are much smoother, have wider RPM range, and flatter (and broader) torque band than anything the USA is familar with … except possibly the VW.

    To Glenn A = Isn’t the Auris the new Corolla? I do agree that many of the EU vehicles have lower MASS. But, why should I (or others) be deprived of the purchase of a 1 to 2 ton machine if we choose to? But, you will agree that a 38 mpg(US) combined average 2007 Cadillac BLs (diesel) is not a light weight to be sneezed at?

    It must be noted, auto companies with significant domestic(US) market presence … Ford, GM, Honda, Hyundai, Kia, Nissan, Suzuki, Toyota, VW, et. al. (and their) partners have 48 (or more) vehicles that achieve better than 44 mpg(US) combined average. While in the USA, they have only 47 that have a combined average between 30 to 35 mpg(US) … and only the Prius, Civic Hybrid, and 2 Yaris get over 35 mpg(US) average. The major difference is the Euro Step IV diesel engines.

    I agree that Hydro Carbons(HC), Nitrous Oxides (NOx), and carbon monoxide (CO), and CO2 are all concerns. So is SOx, that isn’t talked about, associated with gasoline. We further know that the average NEW America car is at least 2X worse (above 260 g/km) on CO2 emissions than these higher mpg non-domestic machines (under 160g/km). I have not been able to find “DOMESTIC” NOx and HC data for gasoline and diesel, however, I did find UK values in the range of NOx ~ 0.165 g/km and HC + NOx ~ 0.196 g/km.

    QUESTION to FORUM: Does anyone have source data on “DOMESTIC(US)” NOx, HC, CO2, CO, and SOx emissions for gasoline and diesel vehicles? Is there a way to get access to the data? Thanks for any HELP.

  • avatar
    Luigi Bosco

    If it is not from the big three is is not a product from the land of the free. Are you guys in denial? I had a 1990 Chevy which I recently gave to a friend. Unlike it’s Japanese competitors it did not have a timing belt. It‘s V6 engine did not gel and the heads gaskets did not blow. The speedometers recorded the mileage correctly and as it was a wagon it was worked hard most of its life and buried a lot of foreign competition during the 17 years the car was in the family. .
    What you drive says allot about who you are. Do you really think you do not stand out in a foreign brand on a us road? If you want to buy from a scab do not cry when you are out of work. Foreign jobs are in the south for a reason only ; to employ scab workers. You can put dress on pig but it is still a pig
    Nissan sent the Armada, Honda sent the Pilot and Mitsubishi sent the Zero; what does that make you, a target?
    Be different and support America.

  • avatar

    Luigi Bosco :

    If it is not from the big three is is not a product from the land of the free.

    That’s a nice, simple rule, but how do you account for Korean Chevrolets, Mexican Fusions and Canadian Silverados? And what about Chinese parts in Chryslers, or Chrysler’s recent production deal with the Chinese to build a small car for the American market?

    By the same token, calling all Southern auto workers “scabs” makes things nice and clear for the intellectually challenged, but are southern auto workers really taking jobs from union workers? I mean, jobs that the union had? ‘Cause as far as I know, there were no union workers building cars down South before the transplants set up shop.

    Also, the southern workers seem unwilling to organize. So… they may be scabs, but they seem happy enough to work without union representation. Do you think they might know something you don’t?


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