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More Reasons Why We Should Not Care if Domestic Automakers Tank

Wed, Nov 19, 2008 at 12:44 pm Posted in Society
1976 Chevy Chevette

There is no reason to be married to American brands like Ford, Chevy, Jeep, or Cadillac. The truth under the hood is that each of these cars are no more and no less domestic than Toyota, Honda, or even Mitsubishi. In fact, what you think is a domestic product most likely is not.

“An “American” brand tells you little about where all the parts in a car are made.  I was once at a dinner with Lee Iaccoca where I teased him about my Dodge Stealth, made in Japan by Mitsubishi.  Similarly, today’s Chevy Aveo is imported from Daewoo in South Korea.  Yet Hyundai has a plant in Alabama.

Cars.com found only four cars and six light trucks with a domestic content (meaning US or Canadian) above 75%.  That list includes the Toyota Tundra and Sienna and the Honda Odyssey.  Other Honda’s have a 60-70% domestic content, barely missing the cut.

The “Detroit” metaphor for primarily domestic vehicles is also inappropriate.  Among the remaining seven vehicles with a very high domestic content, three are made outside Michigan —the Chevy Malibu from Kansas and Cobalt from Ohio, and the Ford Explorer from Kentucky.  Ford’s F-150 truck might be made in Michigan or Missouri, the Chevy Silverado in Michigan or Indiana.”

The truth is that domestic cars are not engineered as well as Toyotas or Hondas or Subarus. Ask a Ford or GM dealer about the percentage of domestic parts that are actually in the car. Then ask where it was manufactured. That car was probably built in Mexico on 30% domestic parts. The rest of the parts are Japanese or Korean most likely. And still, domestic cars do not compete well with even Mazda or Nissan. They currently hold none of the top ten cars for re-sale value. Since at least 1990 the worst cars are dominated by domestic models. What you don’t see in these lists are Hondas, Toyotas, Subarus, Mazdas, and Nissans. And where Toyota and Honida are concerned, it was probably built in the US.

The only reason to buy domestic cars anymore is nostalgia. However, nostalgia will not help you on the side of the road when your timing belt or computer freaks out in the dead of winter on the Interstate after your piece of mythic American pride turns 150K miles. Until domestic automakers simply make better cars and market them more effectively and cheaply, they do not deserve to be saved by anyone. They have only continually failed the American consumer since the 1970’s and will continue to do so as their markets focus more on China as opposed to their own backyard. Why should we care about them? They clearly could care less about us.

Viewing 4 Comments

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    It isn't about cars and trucks. It's about Main Street, not Wall Street.

    Unfortunately, I continue to find it not at all surprising that Washington agreed to a $700 billion dollar bailout for irresponsible Wall Street firms, but refuses to approve a $25 billion dollar loan for the auto industry. They're willing to bail out irresponsible homeowners who bought more home than they could afford and the banks that approved the mortgages, but don't seem to care if those folks actually have a job to be able to pay off that mortgage.

    Remember all that Wall Street vs. Main Street rhetoric the republicans were using during the election? Funny how that's disappeared now. I'm not surprised because for 7 years, the Big 3 tried to meet with the Bush Administration, and got no where. And that was back when things were good for them.

    Unfortunately, for Chapter 11 to work for GM, for example, people would have to continue buying GM cars during restructuring. Why buy a car from a company that may not be around in 6 months to service the warranty? Not gonna happen. Chapter 11 will insure that GM fails.

    And GM's 123,000 employees? Feh. That's a drop in the bucket when we consider all of the suppliers who will also be run out of business, not to mention the service industry jobs in and around factory towns. Heck, several of those towns themselves are already bankrupt.

    I think people have no idea what Michigan is like these days. We've had almost double the rate of unemployment of the rest of the country for years. There are cities like my hometown, which honestly haven't recovered since the Carter Administration. Nearly every other house on my parents' street is for sale for about half what folks initially paid for it. And many of the retired UAW workers, that people here seem to believe are living high on the hog, have *already* had their pensions negotiated away, and now their 401Ks are worthless too.

    Oh, and in Michigan, we pay for our schools using property taxes. Say goodbye to our already troubled school systems once GM goes out of business and everyone either loses their house through foreclosure and/or moves to some other state.

    $25 billion vs. $700 billion? Really? That's the tipping point? That's like arguing that a person can lose weight by getting a haircut.

    Attach strings to these loans, heck, use ropes. But throwing hundreds of thousands of people out of work is not a reasonable way to bring the economy back from collapse.
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    • v
    off gays... a peculiar choice of words my friend...
    ;-)
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    • v
    This has got to stop. We've agreed far too much lately.
    • ^
    • v
    Hey once we get off of gays we aren't that far off most of the time.
 

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