[Toshi]

WSJ article: "What is an American car?" complete with a 15-car quiz

Could there be a more American vehicle than a "Jeep Patriot?" Nothing on four wheels says American more proudly than Jeep, the rugged brand that helped America win World War II, and has ferried millions into our wild, Western spaces since.

Yes, in fact, there could be a more American SUV than a Jeep Patriot. A Toyota Sequoia would be one of them. The Sequoia is 80% "domestic" according to the National Highway Traffic Safety Administration, while the Jeep Patriot is only 66%

this has been an issue for years but the auto bailout brings it to the front: many "foreign" cars are assembled in the US and have higher domestic parts content than models from "domestic" manufacturers. the only difference is that profits (or huge losses as it were ) go to headquarters in different countries.

PDF of a NHTSA list of place of manufacture and domestic content. let me arbitrarily pick some examples. keep in mind that "built domestically" in this list means assembled in the US or canada.

small or frugal cars:
Honda Civic. 70% domestic content, built both domestically and abroad.
Chevrolet Aveo. 5% domestic content, built in South Korea.
Toyota Corolla. 65-75% domestic content, built domestically in Fremont, CA per the WSJ quiz.
Toyota Prius, technically midsize, i know. 0% domestic content, built in Japan.
Toyota Yaris. 0% domestic content, not built domestically.
VW Jetta. 13% domestic content, built abroad.
VW GTI. 1% domestic content, built abroad.

midsize sedans:
Honda Accord. 60% domestic content, and most are built in Marysvile, Ohio.
Ford Fusion. 40% domestic content, hecho en Hermisillo, MX.
Hyundai Sonata. 37% domestic content but built in Montgomery, AL.
Mitsubishi Galant. 61% domestic content, built domestically.
Toyota Camry. 70% domestic content for the non-hybrid, built in Georgetown, KY per the WSJ quiz.

minivans:
Honda Odyssey. 75% domestic content, built domestically.
Chrysler Town and Country. 73% domestic content, built in Canada iirc.

pickup trucks and SUVs:
Honda Ridgeline. 75% domestic content, built domestically.
BMW X5. 30% domestic content but built in Spartanburg, SC.
Dodge Ram. 68% domestic. built in Saltillo, MX and Warren, MI.
Ford F-series. 80% domestic content. built in Kansas City, MO; Dearborn, MI; and Cuautitlan, MX.
Cadillac Escalade/GMC/Chevy Tahoe/Yukon/Suburban. 66% domestic, built in Silao, MX and Arlington, TX.
Nissan Titan and Armada. 65% domestic content, built domestically.
Nissan Pathfinder. 60% domestic content, built domestically.
Toyota Tundra and Sequoia. 80% domestic content, built in San Antonio, TX.

 

[Samirol]

From: http://www.chicagofed.org/publications/fedletter/cfloctober2007_243.pdf

I don't know if I'm reading it right, but it looks like the big three tend to use more domestic parts than foreign car companies. Also, I think some of the foreign cars that are produced in the US are also Big Three factories.

 

[$tinkle]

the jeep lines have got to be the most patriotic vehicles out there. what with all the maintenance & labor on them, so much money is being kept in country after they're purchased.

 

[ohio]

I completely agree. However, the danger of letting all three fail was still quite real, because while "foreign" automakers would somewhat stabilize/baseline production in the US, the Big 3 largely share a supply chain that is separate from Toyota, Honda, BMW, etc. It was the stability of the supply chain we were protecting.

At the same time, I truly think that the the dangers of letting all three fail were poor justification for not letting even one of them fail.

 

[Toshi]

marc,

how has the bailout changed the fundamental forces at play that have been squeezing the supply chain for the last decade? the big 3 are delaying payment 60 days these days and chrysler announced that they'd cap their suppliers' reimbursement at current levels. you also have the long (indefinite?) periods where plants are idled. the bailout isn't going to save the suppliers. it's a boondoggle.

 

[Toshi]

I don't know if I'm reading it right, but it looks like the big three tend to use more domestic parts than foreign car companies. Also, I think some of the foreign cars that are produced in the US are also Big Three factories.

if you follow the trendlines we are due for parity in domestic and foreign content right about now.

furthermore, averaging out the entire "non-domestic" auto industry as that graph does is unfair as all the "0% domestic content" models and companies skew the values disproportionately. eg. BMW save for the X5/Z4, all of Audi, Volvo, Saab, and so forth. a more fair comparison would be Toyota and Honda vs. GM and Ford.

 

[DirtyDog]

I always wondered what those numbers would be. Those seem to be outdated though. I shopped for Dodge 2500 earlier in the year and the sticker said made in Mexico.

 

[rockwool]

this has been an issue for years but the auto bailout brings it to the front: many "foreign" cars are assembled in the US and have higher domestic parts content than models from "domestic" manufacturers. the only difference is that profits (or huge losses as it were ) go to headquarters in different countries.

Distributing the economic profits, and not to forget the work opportuinties, to domestic parts factories must have a better effect on the economy of your nation than what the profits of the big three do. They only benefit the few shareholders.

 

[ohio]

marc,

how has the bailout changed the fundamental forces at play that have been squeezing the supply chain for the last decade? the big 3 are delaying payment 60 days these days and chrysler announced that they'd cap their suppliers' reimbursement at current levels. you also have the long (indefinite?) periods where plants are idled. the bailout isn't going to save the suppliers. it's a boondoggle.

Which forces are you specifically referring to? Obviously some suppliers are going to go under, with or without a bailout. The last model I saw (I think posted by Samirol) showed a step function change between 1 and 2 of the big 3 collapsing. Basically with 1 down, a proportional volume of the chain collapses, but with 2 down everything (including all of the surrounding service industries) collapse. We don't need to save every supplier, we just need to save enough of them that a complete supply chain still exists. The supply chain needs it's own revolution, but that can wait for flusher times.

 

[Toshi]

I always wondered what those numbers would be. Those seem to be outdated though. I shopped for Dodge 2500 earlier in the year and the sticker said made in Mexico.

hmm? d'accord, no? "Dodge Ram. 68% domestic. built in Saltillo, MX and Warren, MI."

 

[Toshi]

Which forces are you specifically referring to? Obviously some suppliers are going to go under, with or without a bailout. The last model I saw (I think posted by Samirol) showed a step function change between 1 and 2 of the big 3 collapsing. Basically with 1 down, a proportional volume of the chain collapses, but with 2 down everything (including all of the surrounding service industries) collapse. We don't need to save every supplier, we just need to save enough of them that a complete supply chain still exists. The supply chain needs it's own revolution, but that can wait for flusher times.

the forces:

- auto sales SAAR of 10-13 million
- ever-increasing price pressure from big 3 management due to their own financial pressure to finance VEBA among other huge entitlement programs

 

[DirtyDog]

hmm? d'accord, no? "Dodge Ram. 68% domestic. built in Saltillo, MX and Warren, MI."

Reading comprehension sucks

 

[ohio]

the forces:

- auto sales SAAR of 10-13 million
- ever-increasing price pressure from big 3 management due to their own financial pressure to finance VEBA among other huge entitlement programs

Maybe I'm an idiot, but I still don't understand what you're getting at.

- I don't see the connection of relatively static sales numbers to the matter at all.
- Increasing price pressure has always been there. That's the way American automakers/procurement operates. VEBA seems like a left-field detail that I again see no connection to the topic.

If you're simply saying the bailout doesn't cure the industry's problem's we're in agreement. But I also don't think the country can handle a total collapse right now, and I'm proposing that letting ONE of them fail could be the impetus for the radical change needed, while preventing anything overly catastrophic. Can you let me know which portions of that you're arguing against? If you explain what you're argument or thesis is, I'll be able to connect the dots.

 

[Toshi]

heh, i'm agreeing with you that the bailout does not cure the industry's problems, and am just pointing out some of said problems.

 

[pumpkinator]

I'm proposing that letting ONE of them fail could be the impetus for the radical change needed, while preventing anything overly catastrophic. .

1. which one?
2. how do you tell which one?
3. what do you say to the families of that one?
4. how is one going under going to be able to be kept non-catastrophic? are you suggesting a pay back to the families with some of the goOberments monies?

 

[pumpkinator]

and i got to add that i drive a 98 f-150, a 99 f-150 and a 92 f-250 and they are great trucks. now the newer models don't seem to be as sturdy or reliable in the 150 groupo.

 

[Samirol]

Which forces are you specifically referring to? Obviously some suppliers are going to go under, with or without a bailout. The last model I saw (I think posted by Samirol) showed a step function change between 1 and 2 of the big 3 collapsing. Basically with 1 down, a proportional volume of the chain collapses, but with 2 down everything (including all of the surrounding service industries) collapse. We don't need to save every supplier, we just need to save enough of them that a complete supply chain still exists. The supply chain needs it's own revolution, but that can wait for flusher times.

I can dig it up, but I think it had if only GM fell, only Michigan would be hit really hard, if all 3 fell, then we are talking 5%+ more unemployment in every state

 

[rockwool]

Here's something to support, if you can afford it.... Or wait some 3-5 years untill they're within your pocket range.

Supa fast, supa sexy, supa clean



A clip from yahoo news

 

[Westy]

Rumour is my company and many other are now refusing to do business with GM. It seems that part of the bailout forces suppliers who take GM order to take rediculously long payment terms. It is better to go out of business from lack of sales than to invest millions making product that you never get paid for. That is even only if you have the operating cash to even make the choice.

 

[MMike]

I in fact DO NOT suck!

 

[Toshi]

Rumour is my company and many other are now refusing to do business with GM. It seems that part of the bailout forces suppliers who take GM order to take rediculously long payment terms. It is better to go out of business from lack of sales than to invest millions making product that you never get paid for. That is even only if you have the operating cash to even make the choice.

i have read that GM was pushing back payment terms prior to the bailout.