By on January 27, 2009

With governments everywhere becoming investors in their native auto industries, the question of what exactly is a native auto industry is suddenly big news. Veteran Wall Street Journal writer Joseph White has taken up the question: What is an American Car? [sub]. The Journal has a fun “Where is this Car Made” quiz to test your knowledge. What could be more American than a Mexican built Escalade, Dodge Ram, Silverado or F150? Is an Ohio built Honda Accord Japanese? What to make of a Mexican built Ford Fusion with a Mazda based design? Is Canada the 51st state or not? Coherent people everywhere have noticed that “the Detroit companies wave the Stars and Stripes when they advertise their wares or look for loans in Washington, but when they talk to investors or the business press, they stress their aggressive efforts to promote ‘global sourcing,’a code for, ‘Buy More Parts from China and Mexico.'” Such Detroit double-speak has a long and ignominious history.

“During the 1980s and 1990s, Chrysler was the most flag-waving, red-white-and-blue American car company among Detroit’s Big Three. Company Chairman Lee Iacocca was a clear, loud voice accusing Japan’s government and auto makers of unfair trade practices.” Meanwhile, Chrysler was importing complete Mitsubishis to sell under its own name, buying four-banger mills from Volkswagen and installing Mitsubishi V-6 engines in scads of minivans; and then topped off the flag waving by selling out to Daimler-Benz.

But more importantly, customers largely don’t care about domestic content. “A 2001 study by NHTSA found that more than 75% of 646 people surveyed weren’t aware of the existence of the domestic content information, and only 5% of those surveyed said the disclosures — usually on a window sticker — affected their decision ‘to any degree whatsoever.'”

That 5% who did care may well have been the minority of Japanese branded car buyers who cherry pick Japanese built units off the dealer’s lot. These are strange times indeed. Just think, next year you may be able to buy a new Dodge – designed by Fiat, built in Turkey and financed by the US Department of the Treasury. If the taxpayer holds the paper, is it American? Does it matter?

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37 Comments on “WSJ: The Great American Car Hunt...”


  • avatar
    Bunter1

    I have long felt that the “US or Canada” equivalency is a bit lame. Canadians pay their taxes to a foreign government, with it’s own agenda. They spend their wages there, buying houses, food, clothing etc.

    Hey, it’s great we we generally get along.

    But quite frankly the Japanese people are very American friendly also.

    For my money “made in Canada” means imported from a foreign country. Stop the fiction.

    Bunter

  • avatar
    KatiePuckrik

    I think the only time a car’s heritage should count (outside of nationalistic pride) should be when one is considering a car’s sensibilities.

    Let me explain:

    I love Jaguars (what do you mean, I’ve kept that a secret?!). I love how the cars (more so, the XJ and XF range) retains a sense of Britishness about them. The interiors have loads of wood and leather, the ride quality is smooth and refined and looks of the car just drips of class. The X-Type even though it’s on a Ford Mondeo platform and powertrain, is a good effort to retain these qualities and sensibilities. It doesn’t matter who owns the company or where the parts are sourced, it’s what MAKES the car.

    Now consider SAAB and Volvo. Before their takeovers, they had a quirky Swedish charm and logic to them. The Volvos of old were built to last and dependable. Nowadays, they are a bit of a poor attempt to usurp Lexuses, BMW’s, Audi’s and Mercedes-Benzes. Volvo should go back what they were good at, safe dependable cars. Likewise, when GM got SAAB under its wing, the Swedish charm just got sucked out of it and now we’re left with re-badged Vectras.

    Another case in point is Italian cars. Italian cars aren’t famous for build quality (even though they’re making progress in that field) or the best engineering, but what they do make are elegant, sleek cars. Italian design is in a class of its own. Compare a Maserati Quattroporte to a Porsche 911 and the difference will be apparent.

    To say a car is of a particular nationality because it’s OWNED by a company of a particular nationality (i.e Land Rover and Jaguar under Indian ownership) is ludicrous. That’s like saying the Ford GT40 is an all american car, even though the majority of the engineering was done by Lola, Cooper and Lotus. All of whom were British.

    So in conclusion, nationality of a car matter when you want a particular quality to a car. It’s why the Japanese couldn’t design a car that looks like a Ferrari F430 or the French building a car with Japanese attention to detail.

    It’s the X-Factor which makes you LOVE a car.

  • avatar
    CommanderFish

    I believe all of the Mitsubishis Chrysler ever used were, in fact, made in America. Diamond Star Motors in Normal, IL.

  • avatar
    Kurt.

    I agree with the intent of the article. It really doesn’t matter (unless you are following the cash).

    The truth is, today’s cars are generally about the same, country for country (caveat: 1st world automakers). Toyota has a reputation for quality but the truth is, their trucks are worse than the 1986 Hilux that gave it that reputation. Your beloved Jaguar is nothing like the originals that gave it that reputation. The germans do have a quirkiness about them but a Golf is generally about the same as an Corsa which is very similar to a Clio or a Punto. Volvo was over weight junk back then, and Ford did little to ruin a flawed design.

    The point: origination doesn’t really matter except in the context of whose economy are you supporting. A Euro car such as BMW built in SC is providing employment to that economy and taxes to the US government though the lions share of the profits return to Bravaria where they can invest that in Switzerland for their F1 team and whose income creation ends up in the pockets of Uncle Bernie and taxed by the UK government.

    Quattroporte compared to a 911? Quattroporte is an (ugly) sedan and the 911 a beutifully sleak high performance sports car. How do they compare? Put the Quattroporte with a Lexus, S-class or even the Panamera!

  • avatar
    mikey

    @ Bunter I wiil agree that the Impala,Camaro and some of the full size pickups could be considered foreign.Having said that, GM is the number one top selling car company in Canada.I think that puts us in a different position than,say Germany or maybe Japan.My last car was a Grand Am my wife drives a Jimmy have I been buying foreign?Our two economys are joined at the hip.

    Is Canada the 51st state?There is those{mostly on the far/loony left} that would totally disagree.As a matter of factIMHO we are indeed the the 51 state.

  • avatar

    Katie’s right: a car’s national origin has a lot to do with its character. Whether that’s down to geography (see: Ronnie Schreiber’s editorial on HVAC) or national character is an open question.

    Or at least it was, back in the day. Before large automakers decided transnational badge engineering was cool, and killed the golden geese. (This Borg work doesn’t bode well for Ford’s huge bet on “world cars” BTW.)

    And after the current failed experiment with multinationals buying boutique brands, I expect a return to form.

    However…

    If $49b of my U.S. tax money is being hijacked in the name of “protecting U.S. jobs,” I expect ALL of it to be spent DIRECTLY on U.S. factories. Chinese engines? Nope. Canadian production? Nope. Here’s the kicker: I don’t care where the company’s based, as long as the aid goes to American workers. Hyundai has just as much call on my tax money, to my mind, as The Big 2.8.

  • avatar

    I love my Canadian Acura. I also loved my Mexican Golf, although my German Golfs had higher quality interiors.

    I had a Mercury Mystique, which was made in the US with many Ford of Europe parts.

    Sorry, but it is clear that the Automakers go where the State provides health care….

  • avatar
    Kurt.

    RF and Katie: Agree to disagree. If you were to test similar modern cars of unknown origin (I want to say a blindfold test but you get my drift), you wouldn’t say “this car is German or this car is British. OK, the A/C or automatic tranny might give away the Americans but really, the closest you’d come is to compare your experience with another car, “The interior of this car reminds me of the Jag XJ-S”.

    Now if you knew the car – say a FIAT Grand Punto and it broke down, you might say with glee “Fix It Again Tony!” and march around like you knew something special – whether you did or not is irrelivent. It is the ingrained impression you already had, not necessarily based on any real fact.

    I’ll give you that “back in the day” national character made a big difference. Today, competition and these corporations are too multinational to allow individualism.

  • avatar
    RickCanadian

    @Bunter,

    “For my money “made in Canada” means imported from a foreign country. Stop the fiction.”

    I totally agree with you. I also believe that we should stop the fiction here in Canada of calling GM, Chrysler and Ford “domestic” automakers, since they are as foreign to Canada as the Japanese or German carmakers are. For that reason, I don’t see why the Canadian government is willing to give billions in a bailout to GM and Chrysler, giving them an unfair competitive edge against equally foreign companies like Toyota or Honda.

    I say this without any animosity against our friends south of the border, is just a reality check.

  • avatar
    200k-min

    The argument I get from the “buy domestics” crowd is that even though the Det 2.8 might not have a higher domestic part content, the profits stay in the USA.

    Right now I’d ask “what profits” but regardless, it’s a stupid argument. Do people really want to buy a product that helps pay for Rick W’s incompetence? A vehicle is for most people their second largest purchase behind a house. Are you really going to make a decision on where to spend that money on who’ll profit from your purchase? It’s irrational and why people don’t care about that line on the window sticker.

  • avatar
    Richard Chen

    I got all 12/12 questions right in less than 45 seconds. Tell me, WSJ, what do I win?

    Here’s another version of this quiz: have someone else take photos of the mandated parts contents sticker next to the Mulroney on some new cars. Identify cars based on parts.

  • avatar
    thoots

    Yep, Ford wants me to “Buy American” and get a Fusion built in Mexico, out of 40% US parts content.

    Like hell.

    They might as well just go ahead and outsource all of their jobs to China, if they’re going to outsource them to Mexico.

    “US vehicle,” my rear end.

  • avatar
    geeber

    Robert Farago: Or at least it was, back in the day. Before large automakers decided transnational badge engineering was cool, and killed the golden geese. (This Borg work doesn’t bode well for Ford’s huge bet on “world cars” BTW.)

    But the upcoming “world cars” will still be Fords. The British enthusiast magazines regularly comment that the European Fords have a distinct character. I see no reason why, if done properly, those vehicles won’t succeed here.

  • avatar
    Luther

    “American-built” refers to the “Dollar Zone” which is Canada on down to Panama…Currently.

  • avatar
    mfgreen40

    Is that a picture of the late great Smokey Yunick?

  • avatar
    PeteMoran

    I think it’s perfectly normal to use a wider set of criteria for such a large purchase (usually the second largest an individual or family might make). The percentage of domestic content might not be nearest the top of the priorities.

    Here in Australia we have GM-Holden, Ford and Toyota manufacturing and until recently Mitsubishi, only producing a small set of models so the local choice is pretty limited. GM-Holden and Ford do a clever job of maximizing the platform they have for many uses however.

    (It also escapes most Australians, that along with Hino, Toyota are a larger employer than either GM-Holden or Ford. Those two companies are also the most vigorous flag wavers).

  • avatar
    John Horner

    “I believe all of the Mitsubishis Chrysler ever used were, in fact, made in America. Diamond Star Motors in Normal, IL.”

    Incorrect. The former Diamond Star (renamed Mitsubishi Motors USA in 1993) didn’t open until 1988, by which time Chrysler had been importing Mitsubishis from Japan for nearly twenty years.

    Even after Diamond Star opened, Chrysler continued importing some models from Mitsubishi’s Japanese factories. All of the Dodge Colts and Ram 50 mini-pickups, for example, were Japanese imports.

  • avatar

    To me its offensive in the extreme whenever Canadians (not you Mikey) come onto Internet forums and blast foriegn cars and imports and go on how its bad for the US. I’m with Bunter, sorry but Canada is a foriegn country. They speak english (for the most part) and ethnically mirror the midwest but they are still a foriegn country.

    Secretly I’m hoping that Toyota buys GM so I can watch and see the coniption fit these “buying car made here doesn’t matter its where the profits go” types have.

  • avatar
    JT

    Those of a certain age may remember the xenophobia of the late 70s and early 1980s. During this time, the push for America First and domestic content came into view. (Anybody remember the Readers Digest flag decals for your side windows?)

    The then-Big 3 fought like hell to make the pending domestic content legislation apply to “North American” content rather than just “50-state” content.

    I also remember (distantly) that Detroit reworked the method by which “domestic” content was computed so that results were more favorable to them. I’m uncertain if it was changed to be measured by mass, dollar value, or sheer number of components, but I do remember a lot of industry activity on it.

    And yes, I worked with a guy who actually, really and truly believed that Canada was a state north of Minnesota.
    He didn’t last long with us, particularly after breathlessly reminding the boss that one of our recent publications lacked a section on carburetors. No problem though — the book was on diesel engines.

  • avatar
    no_slushbox

    You want to create auto manufacturing jobs in the US? Break the UAW.

    Nobody wants to build cars with UAW workers.

    If Card Check passes nothing will be made in this country.

    You want to create auto engineering jobs in the US? Invest in universities and research grants.

  • avatar
    Jeffer

    I have to disagree with those who say Canada does not have a domestic brand. GM of Canada was formed from a 1918 merger of Chevrolet Motor Co. of Canada and Mclaughlin Motor Co. of Canada. Mclaughlin Co. had been building Buick powered cars since 1908. It may be a stretch, but to me GM is as Canadian of a brand as it gets.

  • avatar

    Every bit Canadian as Honda of Canada and Toyota of Canada but I think the discussion was not if Canada had a domestic industry but whether something made in Canada was a foriegn import item to the US market

  • avatar
    Jeffer

    Of course you are right that any Canadian built vehicle sold in the US is foreign. What I am saying is that GM(canada) has authentic home grown Canadian roots(Mclaughlin)and COULD be considered domestic, unlike other companies, which set up sales offices first and added manufacturing later.

  • avatar
    hazard

    Canada and Mexico are in NAFTA with the US. Kinda lika the EU/EEA in Europe in the economic sense, where now an Opel of VW in France is a “domestic” and a Renault in Germany is a “domestic” also. Same for Canadian products in the US. And vice versa. In Canada people will call Fords and Chevys “domestic” even if they come from the US and Honda is “foreign” even if it’s built in Ontario.

    But I agree that’s silly. For Canada, either all cars are foreign (since there are no domestic car companies), or all the cars built/assembled in Canada – or at least in the NAFTA-zone – are domestic, regardless of brand, and all others are foreign. Because according to current linguo, a Korean car built by an American-owned company is “domestic” (i.e. Aveo, Epica, etc.).

  • avatar
    njgreene

    8 of 12 for me, although I think could have done a bit better if I’d concentrated.

  • avatar
    psarhjinian

    Every bit Canadian as Honda of Canada and Toyota of Canada but I think the discussion was not if Canada had a domestic industry but whether something made in Canada was a foriegn import item to the US market

    Here’s a tip: if it’s oil, water, or electricity, it’s all part of NAFTA and Canadians should shut their mouths and open the pipes.

    If it’s lumber, steel, smut or marijuana, we’re a nation of lepers and terrorist-supporters and we’re lucky the US hasn’t built the Second Great Wall

    If it’s automobiles? Depends if you’re from a state with or without a manufacturing presence. Californians couldn’t give a shit; Ohio residents would probably like to see 1812 attempted again.

  • avatar
    psarhjinian

    though the lions share of the profits return to Bravaria

    Profits don’t really matter. The bulk of non-luxury vehicles is cost, and that’s spent locally. Profit is the thin edge of wedge.

    There’s an argument to make that the overall health of a company headquartered in your country does matter (eg, if Toyota Motor Manufacturing of Canada cratered, it would be a smaller dent than GM Canada), but if you’re a Canadian buying a Ford Fusion, you’re flushing everything except a pittance to Ford of Canada and the dealer out of the country. You’re not helping the lineworker at Ford of Oakville much at all.

    GM Canada employees should be intimately familiar with this: buy a Malibu all you want, they’re still going to close the Impala plant.

  • avatar
    Bunter1

    mikey and RickCanadian-I appreciate that you understood me correctly and did not read in any anti-Canada stuff that wasn’t there. Thanks.

    200k-min- You are right that “keeping all the profits here” is a weak arguement.
    From ’98 to ’07 GM destroyed an estimated $184B of wealth from the US economy.

    We are far better off with a “foreign” company making a profit here and leaving some of it.

    It’s not as good as having a great US company doing it, but it beats flushing it down the GM toilet.

    Bunter

  • avatar
    yankinwaoz

    I wish Canada would buy Volvo from Ford. Then Canada could have their own car company, and I suspect they could and would do good things with it. After all, Ford needs to sell it and it seems like Sweden can’t take it back.

  • avatar

    Since we have a global economy now there’s bound to be international trade in automotive components. Under the hood of any car sold in North America is a veritable United Nations of component vendors.

    John McElroy makes the point that we should look where the value added work is done on the car, i.e. where the vehicle was designed and engineered. That would make the Toyota Tundra an American vehicle because it was designed and developed at Toyota’s Ann Arbor facility. McElroy’s point is strong, but I think it breaks down because of how car companies are leveraging global r&d resources plus how they’re shifting a lot of the r&d work to their vendors which, as I mentioned above, are located all around the world.

    BTW, at the NAIAS I asked a couple of GM execs about how they are leveraging their global design centers and they both insisted that the vast majority of the work is done in Warren at the Tech Center and that the Tech Center is the hub of their global r&d network. All the satellite r&d facilities report to Warren, which coordinates design.

    It sounds redundant, but we live in a global world. It seems to me that some people have a ho hum approach – well, if the Chinese or Indians are doing it, why should we bother? Those countries understand better than we do about the need for a modern economy to have a healthy manufacturing sector – both value added and production.

    The other day I saw a chart that showed that for the first time in US history, more people worked for the government (non military, state, local & federal) than worked in manufacturing. As a society we’ve lost the value of making things, preferring instead to work in the service sector, financial trades, or for the government.

  • avatar
    menno

    yankinwaoz wants Canada to buy Volvo.

    Volvo built a factory in Canada in the 1950’s and produced vehicles in or near Halifax, Nova Scotia until after Ford bought Volvo, interestingly enough.

    Perhaps Magna would be interested in buying Volvo and restarting production actually IN Canada as well as Sweden, for European consumption. Certainly Magna has been itching to try it’s hand at automaking instead of auto parts making.

    Canada once upon a time actually DID have some truly Canadian automobile manufacturers, or as close as they could get (given that they describe themselves as a mouse laying in bed with an elephant re: the huge, powerful U.S. is right next door).

    Before the 1930’s depression, there were cars like the Canadian Russell automobile, the McLaughlin-Buick (which, with Studebaker, was one of the few auto companies to make the transition from horse drawn vehicles), the Gray-Dort (likewise, making the transition from horse drawn vehicles) and there have been some very minor players since.

    By the way, the US/Canadian Auto Pact pre-dates NAFTA by several decades; it started on January 1, 1965, and was (supposedly) instrumental in reducing costs of cars in Canada, for Canadians. Over the decades, Canada has in fact exported more cars to the US than it imported from, to this pact supposedly worked well for them. Even though I suspect that car prices came down not one penny for the average Canadian.

  • avatar
    MagMax

    Sherman Lin: “To me its offensive in the extreme whenever Canadians (not you Mikey) come onto Internet forums and blast foriegn cars and imports and go on how its bad for the US. I’m with Bunter, sorry but Canada is a foriegn country. They speak english (for the most part) and ethnically mirror the midwest but they are still a foriegn country.”

    To me it’s offensive in the extreme whenever someone comes onto Internet forums and blasts Canadians and goes on about how they speak English only for the most part and how they ethnically mirror the US mid-west but how they’re still a foriegn (sic) country. It’s time you came up for a visit, Sherman, and had a look at the ethnically and linguistically diverse make-up of Canada. And, for the most part, we do know how to spell “foreign”. I see very little in common between Vancouver and your mid west, to give just one of hundreds of examples. Yes, we’re a foreign country with significantly different social values from those south of our border but within the NAFTA region, for the sake of economic benefit to all members, products move freely across the three borders. We’re not supposed to care that a Nissan is made in Mexico or a Hyundai in the US or a Corolla in Canada, and usually we don’t but now that there’s a recession, suddenly we seem to be back in the bad old xenophobic times. What’s next? Accusing foreigners of being socialists?

  • avatar
    CommanderFish

    John Horner: Ah yes, I forgot that Mitsu and Chrysler went that far back. Thank you.

    You used to be able to use the argument that even if imports made their cars in the United States, the domestics designed and built theirs in the US, so they’re pumping the R&D dollars into the economy, too.

    That is not the truth anymore. GM and Ford are continually borrowing more models and design work from Europe and Australia, while I believe that Toyota and Honda have North American design facilities, maybe Hyundai too but I’m not sure on that.

    Although if it’s a Chrysler you can guarantee it’s designed in the US, simply because they don’t have any other design studios besides the CTC.

  • avatar

    Megmax my point is that many people who post about foreign imports don’t really mean foreign imports they mean Japanese, Korean or Chinese imports. Sorry but Canada is not part of the US. Canada is a great country and all but you are still a foreign country in relation to the US. I would be perfectly fine if they banned all imports into the US which is what some advocate its just those people really don’t include Canada

    Also Sorry I didn’t spell check my prior post.

  • avatar
    psarhjinian

    Perhaps Magna would be interested in buying Volvo and restarting production actually IN Canada as well as Sweden, for European consumption. Certainly Magna has been itching to try it’s hand at automaking instead of auto parts making.

    Magna does make cars, as Magna-Steyr in Europe (X3, 9-3 ‘vert, G-Class). They just don’t design them.

    Were Magna not on the ropes themselves they’d have a chance at this. They have more than enough experience, between their work supporting the American marques and subcontracted assembly .

    My hope, were I to be so optimistic, is that Magna could do well by picking the bones of Saab, Volvo, Chrysler and whomever else bites it (Fiat? GM?). The IP would be cheap, and Magna, unlike many others, already has the infrastructure. I’m sure the Canadian government would much rather shovel money into Frank Stronach’s pocket than the black holes of value that is GM, or the rip-off job being pulled by Cerberus.

    The other option would be an alliance between the second-tier assemblers. The fall of one or more of the big boys would open a crack for an alliance between the likes of Magna, Valmet, Pinnafarina and the like.

  • avatar
    psarhjinian

    Accusing foreigners of being socialists?

    But we are. And some of us are happy about it.

    To his point, though, there’s good economic sense to buying local. “Local”, though, should mean in your own city or region, not by nameplate.

    The net economic impact of buying a Canadian built GM car versus an American one is virtually nil unless you live in the town where the car is made. Otherwise, you’re pumping dollars out of your community no matter what you do.

  • avatar
    rpn453

    That 5% who did care may well have been the minority of Japanese branded car buyers who cherry pick Japanese built units off the dealer’s lot.

    Yep. From my experiences as a bicycle mechanic and a mechanical engineer in the power generation industry, I like to see as many “Made in Japan”s as possible on my car!

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