Perhaps the best way to support the American economy is to drive less or do without a car if possible. Failing that, running your car E85 keeps a very large share of the wealth at home. Even E10 helps out a little.

As the Post Peak Oil world unfolds it is likely that globalization will have to decline due to expensive oil and the costs of shipping parts around the globe. It may be that at some point it will become uneconomic to have other than domestically produced cars.

These cars will be made by foreign companies but will have high domestic content to save on transport costs. The Detroit 2.8 would have had a home court advantage, but they are so screwed up product and management wise that it won’t help.

It will probably be that foreign producers like Toyota will be producing cars of high domestic content Post Peak Oil. They will be small, fuel efficient cars like the Yaris or the Prius which Detroit seems incapable of competitively producing.

There’s a 1,100+ comments thread on this site somewhere that includes this topic….

Buying vehicles made in transplant factories has more domestic economic leverage than buying an import from a foreign company. But it gets much murkier from the collective domestic benefits standpoint when comparing transplant output with domestic and NAFTA output. The transplant purchases support the highest value headquarters jobs in their home countries, including the intellectual capital associated with R&D. Those jobs are not located in the US and do not benefit our economy.

US production by US companies using mostly US-sourced content obviously has the highest economic leverage for American automotive consumers. NAFTA production is often derided here as having inferior value to transplant production. Not so. NAFTA production relieves some stress on our southern border, which is expensive to overcome through other means, and Canada is our largest trading partner and a tightly-integrated neighbor. NAFTA production returns cash to Michigan, which whether profitable or not at the moment, is helpful to the turn-around progress of these companies. Any NAFTA production purchases, ala Fusion, also directly support the rich cache of US HQ jobs associated with the Detroit 3, and their large R&D budgets. Forbes is right: if you are buying a car and want your purchase to be of maximum benefit to the US economy, buy something US or NAFTA-produced from GM, Ford or Chrysler.

No, I’m not entertaining any caterwauling about your 198X Oldsmobile, Escort or Omni. Nor your bawling about a head gasket problem in something made in 1993. Nor am I sympathetic to the imagined trivial advantages that a Corolla allegedly has over a Focus or Cobalt. I’ve driven all of them. Yup a Civic is the most refined, but don’t even think about defending its category-common cheesy interior and paper-thin plastics. I’ll take a Cobalt SS, please. Or maybe an HHR SS. HHR is clearly embraced by the buying public and I have to remind you, it’s just a Cobalt with more interior space, yet is pleasing owners by the tens of thousands.

It’s 2008. From Focus through Fusion through Taurus, Flex, Lincolns and trucks; from Cobalt through Malibu through Impala through LaCrosse, Lucerne, CTS, STS, SRX, XLR, Escalade, Silverado, Corvette; we have choices for good (some great), competent, reliable American vehicles. Some are standout, some are mid-pack, all are competitive by any realistic measure of the way people actually evaluate cars for purchase. No, don’t try to persuade me that the pocket-protector data criteria claimed by the Camry/Accord market is majority mindset.

I’m not arguing for “patriotic” purchasing. There’s nothing patriotic about buying something conclusively inferior just because of where it’s made. Kill the truly inferior Detroit products as quickly as possibly by shunning them. But drop bias, history, bigotry, resentment and choose from the D3’s competitive mix if you want your automotive purchase to have maximum domestic economic leverage. If you don’t, then don’t. Your call. What you can’t do is claim you’re interested in the persistence of a domestic automotive industry and then eschew D3 products, rationalizing that “we have an American auto industry — it’s the US factories of Honda, Toyota, Nissan, et al.” No, it isn’t. That’s just a collection of foreign-owned manufacturing capacity and attendant labor. Better than nothing, but not peer to a domestically-owned and headquartered automotive industry.

As for those Chinese and Korean factories operated by GM, the company is also profitably active in those markets. It is reasonable for GM to import some production in those countries when its cost basis here in the US precludes sustainable manufacture. Should it stay that way? Not if they can manage their domestic costs to sufficiently lean production to make money on US manufacture in the thinnest-margin sectors. But in the meantime and even as a US manufacturer, it’s better to sell an Aveo, for instance, than to vacate the sector entirely. They can always bring it back home later.

True, free market principles work best, and free market means free will. The buying public will do what it wants, but it is also free will to include the national socio-economic context in your buying decision. “Free market” does not coerce you into making an artificially restricted product decision, nor does it compel you to artificially expand the scope of factors that weigh on your purchase. But anyone who buys an import or transplant when a competitive domestic alternative is available, is also undermining to varying degrees their own interests.

If Americans want and care about persistence of a domestically-owned, large and vigorous automotive manufacturing industry, we collectively have in our reach the economic power of many individual decisions to finance the turn-around of the D3, without a single tax levied or governmental liability offered. Even in a sluggish 13 or 14 million units year, the swing of a few million customers who choose the larger context of community over narrow product differences can underpin the recovery of the D3. Yup, the executives have to change their ways, but given the crisis and the time to solve it, it’s really up to us. The only question open is, “Do enough of us care?” It’s not patriotic buying; it’s self interest. I know it’s possible: I’ve had Camry-like reliability from built-in-USA Detroit 3 cars since 1983.

Phil

The problem with the buy American argument is that for a very long time the engineers, managers and workers who built “American” cars didn’t feel any responsibility towards their fellow citizens who bought the things. All those years of callous disregard for the customer are sadly coming home to roost.

And there is an economy that tries hard to keep it all local — North Korea. That works so well that their people have starved by the millions and the survivors are stunted compared to their neighbors to the South and North. In fact, the only thing keeping them going is cash from the South (out of fear of reunification costs), fuel from China (out of fear of refugee hordes and a reunified modern Korea on their border), cash from Japan (from exiles paying to keep their families back home from being sent to death camps), and cash from drug smuggling and counterfeiting (US successes in cracking down on those activities directly led to the nuclear test). But gosh darn, those North Koreans keep it local.

USA also has “5″ as the first place in the VIN, as well as “1″ and “4″

“2″ is Canada.

“3″ is Mexico

Etc.

My wife’s Sonata VIN actually starts with 5, and our Clipper pop-up actually starts with 1.

I think I read somewhere that the worldwide organization started to run out of VIN numbers for the US so assigned “5″ as well as “1″ and “4″.

I “thought” (very incorrectly) that the Hyundai factory was probably just an assembly hall and that “kits” from South Korea came in and were put together like the models I bought when I was a kid.

Nope. I was there on a tour with my wife and we saw it first-hand in January.

Full scale factory, with rolls of galvanized steel (”US Steel” on the round end plain to see), a paint facility (more than up to date – and yep, my wife’s Sonata – built in Montgomery – has the nicest paint I’ve ever seen on a car, bar none), a press plant, automated welding plant, engine plant for BOTH four cylinder and automatic engines and of course, an assembly plant.

It’s a sign of the times that a “car guy” like me, born and bred, raised and worked in Michigan for most of my life of 51 years, couldn’t get in to see American (branded) cars being built and had to do a 2300 mile round-trip to see Hyundai Sonata sedans and Santa Fe SUV’s being built. At least it was in January and we got away from the cold for a few days…

The best thing to do is buy the product that meets your needs best and let the other know “I’m the customer this is what I want”. The ones who want to stay in business and earn your dollars will work to give you what you want. It’s even better if its made locally, but blindly giving a manufacturer support without them earning it just makes it worse. If people had demanded better products from the domestics 2 decades ago instead of doing the flag waving deal they probably wouldn’t be in the mess they are in now, they would have changed when they had the capital to do it or gone the way of the Dodo.

If you buy a Detroit car then they make negative XXX dollars, so by not buying from Detroit you are actually helping those companies lose less money. :-)

Let me ask this question. When those domestic auto workers go out to shop at Walmart, JC Penney, Sears, or any other major department store, do they chose what they buy based on where those products are made? No. If they and everyone else cared, there would be more American-made goods sold there. This simple observation confirms that economic self-interest trumps nationalism.

Why should a car shopper from California or Texas potentially forgo buying a superior product because it’s made somewhere out there, in some other state?

Forgive me if I missed it somewhere in this long string of comments, but why has nobody here asked where the engineering, design, and other WHITE COLLAR jobs go? Who’s actually conceiving these vehicles? Americans? Or Japanese, Koreans and Germans? Does anybody even give a darn about that anymore? Other than me, that is?

I’m all for American (AND Canadian, BTW…) blue collar workers having a place to go where they make a good living right here in the U.S.A. (and Canada…).

But nobody seems to be saying much about where the higher-paying jobs are going — you know, stuff that calls for a college degree and generally promises a higher standard of living?

Yeah. THAT kind of stuff.

Or do we want to become a nation of line workers, who only assemble stuff that “the smart people” actually engineer in other nations?

Yes, when I was young I also assembled legos into creations of my own imagination. But line assembly workers don’t have license to do this, and nor do parts plants that receive their marching orders from other nations’ white collar workers.

And even if I’m wrong, and these lower tiers in the hierarchy of the automotive manufacturing industry in fact do have their own engineers, etc., call me proud if you want, but I’d like to have an industry where the master engineering blueprints, etc., etc., etc. originate here in the U.S. (and Canada, because I have nothing against our very close neighbors to the north).

I want to live in a country that knows, is able to, and WANTS to conceive of, design and engineer its own stuff, not just assemble other people’s stuff. Reading the comments around here, I’m shocked to learn that I may in fact be the minority.

Now that people do not buy those cars in those same numbers the automakers cannot afford to support the infrastructure that was there when they were the entire new car market.

The American manufacturers plants die with their falling marketshare, profits evaporatre when nobody buys your cars. On top of that when they do release a great product people will always make some excuse not to buy it and get that Honda or Toyota anyway.

You can afford to invest in new plants when your business is growing, not when it’s dying. There’s a big difference there.

But more so, Toyota, Honda and others are investing in the US. The 2.8 are dis-investing in the US. Any cash you put into GM’s greedy hands seems to either end up in the pockets of the executives or in new factory capacity in China.

People make the where-the-profits-go argument as if it were an obvious truth. It isn’t.

I’d like to meet the Toyota HR miracle worker who managed to staff a successful, non-union plant in West Virginia.

According to FORBES transplant workers both blue and white collar workers are less important than domestic workers.

Screw you FORBES!

Forbes: “The best way to boost the economy with your next new-car purchase is to buy a domestic-branded model manufactured in North America with the highest percentage of American-made parts”

READ

“Buy an SUV”.

That’s all that is (”largely”) US built with US built engines by US companies.

Another candidate was the Lincoln Town Car, but that is now going to be built in Canada.

Like the Stupendously Undesireable Vehicles, the Lincoln is a bit porkine and not shy about “slopping” up lots of gasoline….

Badum ching, thank you, I’m here all week….

ABSOLUTELY!

Personally, I think:

1. Our nation has had since 1973 to seriously put together a national energy policy, and private industry has failed to do so (in a true free market enterprise system, this would have been the collective responsibility of those in business) and the elected “leadership” in Washington has failed to do so (in a central control political system, this would have been their responsibility – much as the old Soviet Union used to have “5 year plans”)

2. Manufacturing IS leaving the US, but it is also moving INTO the US. Look at Hyundai, now Kia, Toyota, Nissan, Subaru, just in the auto industry. As for tariffs, if We The People of the United States and our elected representative servants (that’s what they are SUPPOSED to be since the power of the nation is supposed to rest with the PEOPLE) are SUPPOSED to follow the United States Constitution and actually not pass idiotic laws constantly interfering with people, their livelihood and their freedom to be responsible citizens. Point I’m making is this; if we’d adhered to the US Constitution and only had tariffs and a few Federal Excise Taxes, how much oil would be imported vs. finding energy sources to use within the country itself, putting people to work? How much earlier would the Japanese have built car factories and employed Americans had there been, say, a 35% tariff on imported cars? On the flip side, I’d LOVE to not have ANY sales taxes, property taxes or income taxes, THANKS. How about you?

3. The downfall of the US auto industry was whose fault? So, are you sore the buying public for NOT buying drek from the Detroit 2.8 after being robbed blind with “super-reliable units” such as the

-Chevrolet Vega
-Ford Pinto
-Ultradrive automatic equipped Dodges
-Turbohydramatic 200 equipped GM vehicles (with pressed steel planetary transmission gears – ka BOOM)
-Diesel V8’s by Oldsmobile installed in most GM products
-Piston slap in GM V8’s recently (”no it’s not a diesel….”)
-Exploding head gaskets (after a century of engine building practice) on Fords, Dodge Neons, GM V6’s, ete etc ad nauseum

Thanks, I’ll buy another Hyundai Sonata (built in Montgomery Alabama) before I’ll even consider a Detroit 2.8 car. I may be a slow learner (having given AMC, Chrysler, Ford and GM chance after chance after chance from 1973 to 1997) but once I learn how to avoid going into the torture chamber of Detroit 2.8 ownership, I don’t care HOW much “everyone” says “we’re better now” (how many decades have I heard that litany coming from Detroit?!) – I won’t go back.

Bravo. Consumers do not exist to satisfy industry. Industry exists to satisfy consumers. That is the whole, entire, raison d’etre of an industry.

This is so profoundly obvious and indisputable yet many people cannot understand it.

There is a real, fundamental economic meaning to the fact that US car makers are losing money and burning through their cash. That means they are co-opting scarce, valuable economic resources that are needed elsewhere, and destroying their value, doing their part to leave society poorer than before. That is not a good thing; it’s a bad thing.

Encouraging that behavior is most certainly NOT good for any economy in the long run. Just ask the Soviet Union.

This is not rhetoric. There is great competition for resources like steal and platinum and rubber and oil and energy and capital. The Detroit 3 are grabbing a lot of that stuff, contributing to record prices, yet re-arranging those molecules into a form that in many cases is worth less than the raw materials and energy and labor that went into it. And they’re producing final products that only further exacerbate the oil scarcity problem.

They keep failing to anticipate what delights Americans, by the way, despite the fantastic advantage of being native to the home market.

They figure out how to add value instead of burn it, fine, they’ll be rewarded without any need of hortatory about why people should buy something they don’t want based on a false protectionist argument.