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Taking information off the "news" is one way that ignorance keeps getting perpetuated. Because reporters are always looking for a sensational "hook," they don't always brief themselves on FACTS. They also are usually ignorant on how the marketplace really works. They certainly know little about the auto industry. It is a waste of time to try to "buy American" by buying an "American" car. The truth is, there is NO CAR IN THE WORLD that is assembled or built entirely from components or materials manufactured within its own borders. Building cars is a global business, and the car companies buy materials and components from the best supplier no matter where he comes from or where he makes his product. Moreover, the car companies have joined together in many joint ventures so it's virtually impossible to determine the national "origin" of a car anymore. Ford is heavily involved with Mazda, Jaguar, Aston Martin, Volvo and Land Rover. Chrysler and Mitsubishi are married. And GM is sleeping with Toyota. In Fremont, California, GM and Toyota build the Corolla/Prizm together. It's the same car, but under the Toyota name, it's called a Corolla, while it's a Prizm under GM's banner. Oddly enough, the Corolla is 76% of the sales. Somehow customers see the "foreign" brand as more desirable. Typical "American" names can also be misleading. The Mercury Grand Marquis and Ford Crown Victoria, for example, are assembled in Canada and even Mexico. Chrysler assembles its LHS, Concordes and 300Ms in Canada. GM assembles all of its Buick Regals, Chevy Camaros, Pontiac Firebirds and Chevy Luminas in Canada. On the other side of the coin, there are eight foreign companies that assemble cars in the U.S. for sale here. Mitsubishi builds Eclipses and Galants at Normal, Ill. Toyota has a huge presence in America, building Camrys and Avalons in Georgetown, KY. Subaru builds Legacys in Lafayette, IN. Mazda (which is 25% owned by Ford) builds 626s in Flat Rock, MI. Honda builds Acuras, Civics, and Accords in Ohio. BMW builds Z3s in South Carolina. Nissan builds Altimas and Sentras in Tennessee. And Mercedes is building M Class vehicles in Alabama. These are all "American" cars even though they have foreign names. Just a couple of years ago, the German company of Daimler-Mercedes Benz bought Chrysler, now renamed Daimler-Chrysler, but the execs in charge at the top are German. Where's Lee Iaccoca when you need him! Interesting, don't you think? That the country that built the auto industry and put the world on wheels, now has only two auto manufacturers left--GM and Ford. While the Germans and Japanese, who we allegedly "defeated" in WW II, now have more factories in America than the Americans. Why did America lose its preeminence? We could look back to 1952 when GM had 52% of the American market. The anti-business types in Congress decided that GM had a "monopoly," and began to pursue GM on "anti-trust" violations. The left-leaning Congressmen just couldn't understand how one company (out of nine at the time) could have 52% of the business unless it was doing something evil. So the anti-trust boys went to town on GM and harassed and tortured them for some 15 years before finally giving up and deciding they didn't have a case. Just think of all those millions that went for lawyers to defend the company from the government, that should have gone into engineering and R&D! Meanwhile, the factories in Japan and Europe were recovering from WW II and getting back into production. When foreign cars began coming into the U.S. (the first VWs came in in 1949, brought back, incidentally, by GIs stationed in Germany) and consumers had more choices of cars to buy, GM lost its dominance. Today, GM has 29% of the U.S. auto market. The primary influence to dethroning our own industry is the anti-business mentality in our own government and the rules and regulations they have imposed over the years, primarily since the 1960s. Immediately after WW II, when the car companies switched over to civilian car production, Harry Truman slapped price controls on them, but also told them they had to give raises to the union members. With profits squeezed, the car companies failed to replace their aging plants and equipment with new, modern stuff. The foreign car companies, since they were starting over from scratch, began with new, modern plants and equipment which made them more productive. Likewise, when Toyota, Nissan, et al, built factories in the U.S., they all worked hard to keep the auto unions out of their factories, and have been pretty successful at it. Only a few of the foreign car factories are unionized at any level. But also, the gaggle of rules and regulations imposed on the car companies, which raised their costs of manufacture, made it necessary to downsize and get rid of old plants and machinery and worst of all, old employees. The car executives are not totally innocent in this; they did the expedient thing for themselves, which was to cooperate with the government. But their slow surrender to the regulators and the dramatic increases in regulatory agencies created in the 1960s by Lyndon Johnson and Richard Nixon have saddled the American auto manufacturers with more costs. One way to realize this is to look at what has happened to the prices of new cars. Prices have gone up much faster than inflation, so the new-car buyer of today has a lower standard of living than in 1973. In 1973, the average new car cost the average U.S. worker,17 weeks' pay. Today it is 22 weeks pay. Think of it, that's a 29% increase in the hours worked to buy a new car for the "average" worker. In the teens, when the Model T Ford was king, it sold for as little as 12 weeks pay, and when Henry Ford went to the $5/day for his own workers in 1914, they were able to afford the T for as little as nine weeks' pay. Think of it, assembly line workers buying a new car for nine weeks pay. And NO INCOME TAX. The average new car today costs over $22,000. So if a factory worker could buy it with nine weeks pay, he'd be earning $2,444 per week. Thus, our standard of living is going down. Additionally, the age of the average car on the road in 1973 was 5.7 years. Today, it is nine years. The last time it was nine years was in 1946, at the end of WW II when new cars had not been built for four years. (Early in 1942, FDR ordered the auto industry to stop making cars for the people and make guns and planes for his war.) The entire nation had to do without new cars for almost four years. (Oh, the GOVERNMENT got new cars, though, and the political class managed to get some production for THEMSELVES. Even the generals got new Packards in 1942, which they took to Europe with them. Ike had to ask the war correspondents not to photograph him in his new Packard because it might irritate the folks at home. But that's another story.) So here we are, as bad off, automotively, as we were in 1946. We're all driving older cars because new ones are so far out of reach. About $4,000 of a new car's price today is the "safety and emissions" mandates by the regulators. Of course, $4,000 is not so much on an $80,000 car, but on a $17,000 Mustang . . . . What needs to be done is for us, the people, to insist that the government leave manufacturers alone to build what the marketplace wants to buy. We can decide, on our own, what we want. The marketplace eventually decides, anyway, but government interference drives up costs and deprives the manufacturer of badly needed profits to put into R&D and his own infrastructure. Then the industry shrinks and people lose jobs. Clay Ford, Jr., Ford's new president, just announced that they are dropping four complete car lines because of poor sales: Mercury Cougar, Ford Escort, Lincoln Continental and one other. But all of those cars met the government's emission and safety requirements. So if the government was satisfied, why shouldn't the customer be? If Ford could build cars to satisfy ONLY the customer instead of NHTSA, EPA and others, prices would come down to what more people can afford, and those four lines might have been saved. It's time our government got out of the way of our automotive geniuses and let them restore America to the #1 place in automobiledom.
discuss this column in the forum Don Hull is an advertising/marketing consultant in Costa Mesa, CA and has run for Congress twice on the Libertarian ticket.
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