Does buying American really mean anything?
More important to GM's future than America?I've bought a Japanese car that was made in America.
On the other hand, my father bought a Ford made in Mexico, and many others have bought cars made in America with numerous foreign parts.
Regardless, according to some experts, buying American is still more beneficial to America. "When it comes to longer term benefits, a lot of activity happens in the country in which the company's world headquarters is domiciled," claims Thomas Klier, an economist with the Federal Reserve Bank of Chicago who has written extensively on the auto industry.
Yet, in the very near future, the Chinese market, for example, could become more important to GM's survival than the American market. And, as GM expands in China, GM's Chinese-based design centers, suppliers, and numbers of Chinese employees will also expand.
In a decade or two, it is possible that GM could employ more people in China than in America, build more cars in China than in America, and even export Chinese-designed-and-built cars to America.
Does buying American really matter anymore? Moreover, wasn't it the 'Buy American' mentality that almost destroyed the Big 3 in the first place by enabling decades of inefficient, unreliable and complacent automaking?
posted by Dahcredyns at
8:51 AM
26 Comments:
The Dell or Toshiba or HP computer you are keyboarding on may or may not be assembled in the USA but virtually all of it's innards were not made in the USA.
the same thing is becoming true even of cars "made in the USA".
Raise the hood on your US-made Toyota and go read the words on your alternator or other parts of it...
"made in USA" is a nostalgic concept most appreciated by those with Luddite leanings.
the real world is the ...real world.. guys
yet, this "nostalgic concept" is a powerful force in today's political world.
the 'made in america' movement has good intentions behind it, but i wonder if in the 'real world' the movement is actually self-defeating.
It's the corporations that go to other countries and open shop there so as to make even more money. The greed is endless...with absolutely no consequence to the surroundings...be in environmental, social, or economic.
But the greed is on all levels. Go to any American suburb and go up to any Mcmansion and talk to any number of families and within 5 minutes you'll realize none of these self-righteous people who are so privileged will give up a thing to improve their country's economy, social outlook, or environment. Not even for their own children.
Made in America has nothing to do nostalgia...it has everything to do with greed and people simply not willing to put their money where their mouths are...which is "We'll pay more for a US product."
When you go to Kmart/Walmart and see a bunch of conservative white Americans shopping away, this concept is even more laughable.
feeling a little angry, noz?
there is no doubt that some fit your description, but its not the majority of those 'buying american', even if some, sometimes contradict themselves.
for many the auto industry is the iconic american industry. so it goes, so goes america.
for many decades that logic seemed to make sense, but it doesn't make nearly as much sense in today's globally connected world.
inevitably, the future, at least if civilization is to move forward, is dependent upon fair and equitable world trade.
Dahc,
I'm not sure if I was clear. I'm not against trade. I'm against hypocrisy.
In this case, I'll have to disagree with you in regards to the typical "buy American" person not being a hypocrite. Why? Because the proof is in the pudding as it were. You merely have to look around you and see how people act and what they do and what they are willing to sacrifice.
You then quickly come to the realization that what I say holds true.
If people in this country want things to be made in this country, then they need to be prepared to pay a lot more for the goods and services they so cherish and ask for all the time. That's what I believe.
A perfect example is every time I go to a social gathering or what not, I here people complaining about job losses and how the Indians and Chinese are taking over and on and on and on and on.
Yet not a single person there will be willing to pay $600 for their nice new Canon Sureshot that they brought to the part and bought from Walmart for $200 because it was made in China. But then they jump into their $50K Audi's at the end of the night to go home.
This BS two-faced hypocrisy is what pisses me off.
The issue is deeper than simple loyalty.
Many US companies move their manufacturing outside the US to avoid paying the high wages and health care costs. Foreign companies avoid manufacturing in the US for the same reason.
The future of buying American may hinge more on health care reform than on consumer loyalty......
well, i definitely hear your hypocrisy arguments, noz.
" Many US companies move their manufacturing outside the US to avoid paying the high wages and health care costs."
we lose competitively to most of the other industrialized countries also because their companies do not have to embed health care costs into the price of their products.
It's also much easier to form small business start-ups and innovative businesses because, again, their guys and gals have their health care taken care of.
Some of the typical ignorant comments.
Of course made in the US matters. Buying locally matters wherever you are in the world. For cars especially, the likelihood of using locally sourced parts is significantly higher for any domestic auto assembly location. Just the assembly and plant related jobs themselves are a significant monetary influx to the local economy around the plant, and in turn sustain another whole level of service related jobs.
As to health care, its not free, even when it comes from the government, someone has to pay for it. Whether its in the form of higher corporate tax, or individual tax. All other things being equal, that cost should still be reflected in the price of goods sold. Or are you advocating having individuals pay for it directly and essentially lowering their disposable income?
BTW, I totally agree with the hypocrisy comment. However, for a lot of consumer items, you simply don't have a choice anymore so it makes it tough to buy locally. (Sometimes you just can't put your money where your mouth is.)
they do two things we don't do.
first they avoid having the healthcare costs embedded in the things they sell to other countries thus making them more competitive especially the US.
Secondly, the way they do health care - they spend 1/2 of what we do so they do pay for it - you're right but at 1/2 what we pay for it doesn't have near the bite on their disposable income.
ocnstiggs-
So a Big 3 branded car Made in Mexico is better than a Toyota Made in America?
Likewise, buying Big 3 cars when they sucked through the 70's, 80's and much of the 90's was good because they were "made in America'?
I don't know, but I think it led to massive protectionism, ridiculous union contracts that benefited only a sliver of the US workforce at the expense of the rest of taxpayers whom, ultimately, are footing much of the costs of those contracts.
i mean, think about it. the big 3 laborers were some of the best paid laborers in the world, yet for decades they produced severely inferior products.
good thing the corporate execs, boards, etc. made billions while we the taxpayers got screwed with crappy products and 70 percent foreign oil dependence.
but that's OK as long as american taxpayers and consumers are screwed by American corporations?
sorry, but i don't see any logic in your argument based on reality and history.
the fact is the auto industry is a very global industry and is becoming more global all the time. gm's survival for instance, is china and india, not the US.
It's obvious...to a certain extent....that the powers at be are forcing industry to be globalized so that we have no control over it. They've removed, for all practical purposes, the consumer from the decision making equation and made us their bitches per say.
Even if we were to revolt and not buy, it'd kill us first in essence.
People may think this is conspiracy talk. But it's too well thought out frankly to be anything other than a planned course of things.
i don't know, noz.
the world has been globalizing for 1000's of years, and the pace of that globalization has been increasing exponentially - much like many of the technologies powering our societal evolution.
certainly, their are conspirators taking advantage of this trend, manipulating it to their advantage, but i think globalization was inevitable by nature.
certainly, it could - and should - be carried out in a much more humane and organic way, but humans have a history of doing the things the hard way.
It's not so much the issue of globalization as much as HOW it is being done.
And without any choice too. Even IF I wanted to pay 5 times as much for a chair that's made in the US instead of China, my choices are indeed limited.
well. I don't think the unions did anything much different than a lot of other industries and companies when it comes to health care.
People take govt jobs not because they're wild about the pay but because they get health care.
Ditto school teachers...
and ditto young people who join the military so that their families can get health care.
everyone is trying to find a job with "benefits" and so the union folks only did what everyone else was doing.
I don't think unions killed our auto industry.
I think we killed it by not doing something about health care so we ended up trying to compete against other countries who removed health care costs from the manufacturing products that competed against ours.
in other words, we failed to respond to the challenge - as a country.
as always. my two cents, and I certainly respect others differing opinions on the subject.
i hear you, noz, but did the average person have much choice 300 years ago?
no doubt, health care had some effect, but many other huge companies have provided benefits and found a way to be profitable.
the big 3 made ridiculous concessions at a time when their products were not competitive with the rest of the world. and 'buy american' sustained this uncompetitiveness for decades. and they did this car after car for decades.
without question, corporate gm was more at fault for their poor decisions, but too many US consumers accepted sub-bar, over-priced products because they wanted to be good americans.
when are corporations ever good americans?
many executives that have left the auto industry have talked about the Big 3's ever constant focus on next month's balance.
it seems they never thought very far into the future - not when it came to business models, products or union concessions.
had they been realistic about their declining marketshare, they probably would have been forced to negotiate better contracts with either the unions, or the health care providers. but only the next quarter was on their radar.
moreover, i believe america's problem with health care is no different than most other american problems: americans want more than they want to take responsibility for.
we are one of the unhealthiest countries in the world, not because of the lack of health care, but because of poor choices and decision making.
that's not an argument against national healthcare, just a reality that america is going to have to eventually address.
still, japanese automakers have nationalized health care, but they also have a nationalized recession. it takes 3 generations to afford a home i've heard some economists say as they wonder if america is headed down the same long term, recessionary path.
so, i'm not sure how national health care makes american automakers that much more competitive versus japan, for instance.
likewise, if american automakers had improved their quality and product lineups to fight off the japanese attack on US auto sale's market share when it first began to occur, rather than decades later, i have no doubt that the none of the big 3 ever would have gone into bankruptcy.
the US auto industry's collapse was based on decades of institutionalized, often-government protected and subsidized, stupidity.
Now to argue the other side of the coin ( I do that ).
to wit:
"Health-Care Reform, Corporate-Style
Company medical clinics are springing up at Toyota, Harrah's, Disney, and elsewhere—and the savings are substantial"
http://www.businessweek.com/magazine/content/08_32/b4095000246100.htm
there's more to the bigger issue of automobile competitiveness than just health care or unions.
As you can see, Toyota takes a direct role - to directly save money - and the American automakers could have done that also... right?
The thing about this is that GM and Ford both produce cars and trucks worldwide - and if I remember correctly - they are profitable at their overseas operations.
They also offer competitive products overseas.
For instance, this Van just introduced in this country is a US automaker "import" -
http://www.fordvehicles.com/transitconnect/
and this vehicle is supposed to come out in a hybrid version next year.
hey... while we're on this subject.. WHERE ARE THE Toyota and Honda Vans?
no japanese vans. i guess we rule that segment!
american automakers have found success in other markets. that is true.
and they've improved their products in america.
still, my take is that if the big 3 had the same attitude in 1975 that Ford has shown under Mulally, the state of the big 3 would be far different today, as would the state of america.
why was such complacency, such a lack of care for consumers tolerated for so long?
I dunno.. the American public went GA GA over those SUVS.
there's still a ton of them on the road - the Tahoes and Explorers and Jeeps and whatever they call the Dodge versions.
People bought the heck out of them - until gas hit $4 a gallon and then the economy had a meltdown ...
but I agree.. FORD was more nimble.. and GM was a sloth...too many models.. too quick to give in on Union demands and ...arrogance...
but hey.. all those arrogant guys up on Wall Street - most of them got bailed out.. and then turned around and gave their folks big-time bonuses while the rest of the country that's paying for the bailouts has 10% unemployment..
oh.. but I digress.. big time.
Dahc,
Ironically I think a person 300 years ago relied more upon him or herself.
LarryG:
Ford was more nimble only by the grace of fortune that they had a European division that actually made better and more realistic cars.
Otherwise, Ford is as pathetic as the rest of them.
Noz-
Ford stayed out of bankruptcy largely because as soon as Mulally took over he completely refinanced the company and all its debt.
Mulally's career at Boeing was influenced by Toyota and the idea of kaizen, or constant improvement. At Boeing, efficiency was the driver of product development, business plans and processes, etc.
Mulally definitely brought significant change to Ford that absolutely helped save Ford from bankruptcy.
I don't disagree that, overall, Ford - for decades - was as pathetic as the rest of the big 3, but since Mulally took the helm, there has been positive change at Ford. Not enough, mind you, but you can't change a huge company over night.
If FORD ends up doing business the way that Boeing (and Toyota) does then they'll do fine...
both GM and FORD attempted re-financing... why did Ford succeed and GM Fail?
because Ford took advantage of prime conditions to refinance. gm and chrysler waited until they had no choice.
again, forward looking thinking it seems to me, or the lack thereof.
Dahcredyns wrote:
So a Big 3 branded car Made in Mexico is better than a Toyota Made in America?
Did you even read what I wrote? When I say "made in America", I mean "made in America". I didn't say anything about the big 3.
Its certainly true that in the 70's cars made in the US were embarrassing. When I went to by my first new car back then, there just wasn't anything I could justify to myself and I bought a Japanese made car. But since then I've bought great new cars built in the US by Toyota, Honda, and Ford.
The point that you apparently missed is that buying a locally built car, even with large amounts of internationally sourced parts is still a big boost to the local economy around that plant, and even though that plant might not be in my state, I choose to send some of my money there vs. sending it internationally. And as I said, the likelihood of using more locally sourced parts is greatly increased and that typically means a much higher likelihood of 2nd and 3rd tier suppliers locating some aspect of their operation in proximity to these assembly plants, which means retaining even more of the money locally.
For the last 20+ years or so, I've been able to shop "made in America" for cars and had a great selection to choose from. If/when I want to move to a hybrid, I'm not sure if I will have the same choice.
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