kansaiwalker1

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http://online.wsj.com/public/article... main_tff_top

Mom, Apple Pie and...Toyota?

Ford Says It's Patriotic to Buy
A Mustang, but Sienna Is Made
In Indiana With More U.S. Parts
By JATHON SAPSFORD and NORIHIKO SHIROUZU
May 11, 2006; Page B1

Few sports cars have captured the nation's imagination like the sleek Ford Mustang, a 21st-century reincarnation of an American classic. The Toyota Sienna minivan, by contrast, speaks to the utilitarian aesthetics of Japan: refined interiors, arm rests and lots and lots of cup holders.

Yet, by a crucial measure, the Sienna is far more American than the Mustang. Statistics from the National Highway Traffic Safety Administration that were publicized in "Auto Industry Update: 2006," a presentation by Farmington Hills, Mich., research company CSM Worldwide, show only 65% of the content of a Ford Mustang comes from the U.S. or Canada. Ford Motor Co. buys the rest of the Mustang's parts abroad. By contrast, the Sienna, sold by Japan's Toyota Motor Corp., is assembled in Indiana with 90% local components.


There's more than a little irony in this, considering Ford has launched a campaign to regain its footing with an appeal to patriotism (catchphrase: "Red, White & Bold"). "Americans really do want to buy American brands," asserted Ford Executive Vice President Mark Fields in a recent speech. "We will compete vigorously to be America's car company."

As the Mustang shows, though, it's no longer easy to define what is American. For 20 years now, the dynamic car makers of Asia -- led by Toyota, Nissan Motor Co. and Honda Motor Co. -- have been pouring money into North America, investing in plants, suppliers and dealerships as well as design, testing and research centers. Their factories used to be derided as "transplants," foreign-owned plants just knocking together imported parts. Today, the Asian car makers are a fully functioning industry, big and powerful enough to challenge Detroit's claim to the heart of U.S. car manufacturing.

The result is a brewing public-relations war, with both sides wrapping themselves in the Stars and Stripes. Toyota, for example has been running commercials touting its contribution to the areas of the U.S. economy where it has built factories.

Next year, the staid Toyota Camry will undergo the ultimate rite of passage by entering the most prestigious circuits of the National Association of Stock Car Racing. Toyota President Katsuaki Watanabe said his company's vast network of dealerships saw the Nascar link as a crucial marketing tactic to raise Toyota's profile in the U.S. heartland. "Our dealers told us it was really important to do this," he says.

On Thursday, the Level Field Institute, a grass-roots organization founded by U.S. Big Three retirees, is scheduled to hold a news conference in Washington. Among the points the group is expected to make is its belief that comparing relative North American component content is an ineffective way to determine who is "more American" among auto makers. A better way, says Jim Doyle who heads Level Field, is to look at the number of jobs -- from research and development to manufacturing to retailing -- each auto maker creates per car sold in the U.S.

Mr. Doyle says the institute's study shows that Toyota in 2005 employed roughly three times more U.S. workers, on a basis of per car sold in the U.S., than Hyundai Motor Co. Each of the Big Three manufacturers in the same year employed roughly three times as many U.S. workers, on a per-car-sold basis, as Toyota. "What's better for the American economy?" Mr. Doyle asks. A GM car "built in Mexico with 147,000 jobs back here in America or a Honda built in Alabama with 4,000 or 5,000 jobs in America?"

Measuring local content is extremely difficult because a part made in America can be assembled from smaller parts, some of which might come from abroad. All of which underscores how the line between what is and isn't American, at least in the auto industry, is "going to be increasingly difficult to pinpoint" as car makers become increasingly international and produce more in local markets, says Michael Robinet, a vice president at CSM Worldwide.

General Motors Corp. is importing Korean-made cars to sell under the Chevy nameplate. Japanese car makers are using American designers for cars being sold in China. Some of the high end luxury BMW "imports" on the road are made in South Carolina. "We don't look at it as an American industry," says Mr. Robinet. "It really is a global industry."

That said, the Japanese manufacturing presence in the U.S. is growing. Foreign-based auto makers in the U.S., led by the Japanese, account for 1.7% of U.S. manufacturing jobs, according to a report by the Center for Automotive Research, Ann Arbor, Mich. After $28 billion in cumulative North America investment -- and annual purchases of parts reaching $45 billion or more in recent years -- 67% of the Japanese-brand cars now sold in North America are made in North America, according to the Japan Automobile Manufacturers Association.

Japanese investment in U.S. production was a response to the trade tensions of the 1990s, when tensions flared over Japan's surplus with the U.S., of which autos and auto parts were a large portion. By spreading investment across the U.S., Japan's car makers have won crucial allies among U.S. politicians. Last year, when President Bush took to the road to tout his Social Security plan, one of his first stops was a major Nissan plant in Canton, Miss., a conservative corner of the country where the phrase "buy American" no longer means what it once did.

"As the son of a union member, I'll admit that free trade is an issue with which I've struggled," says Republican Sen. Trent Lott of Mississippi, who has a Nissan Titan pickup truck in his garage. But he adds: "Remember that every Nissan built in Canton also was engineered by Americans, for Americans."

What isn't clear is how Mustang fans like Fred Barkley, president of the Bluegrass Mustang Club of Lexington, Ky., would react to the news that the Mustang is only 65% American, at least by one government measure. Mr. Barkley, owner of three Mustangs, one from 1965 and two from the early 1990s, says it "doesn't bother me too much." Told the Toyota Sienna has higher North American content than the Mustang, he is unimpressed. "I wouldn't buy a Sienna," he says. "I don't like them because they are foreign."

vishnus11

Another typical dumbass from my neck of the woods with the dumbest excuse of all time (IMO) - "because its foreign"

btw, im from Lexington, KY, just like this idiot. Hope I see him around town

kansaiwalker1

Related artcile:


Can you see USA in car?

Supporting domestic companies and jobs with buying choices not as clear-cut as it was


By Jim Mateja and Rick Popely
Tribune staff reporters

May 21, 2006

Buying a domestic car instead of an import used to be as simple as choosing vanilla over chocolate.

"Domestic" meant going to a Ford or Chevrolet dealer, while "import" buyers headed to Toyota or Honda showrooms.

But in the age of globalization, when parts and vehicles can come from anywhere, a Toyota Camry can be more American than a Ford Mustang, and a Honda Pilot can have more U.S.-made components than a Chevrolet Suburban.

Nevertheless, a group called the Level Field Institute is trying to revive "Buy American" sentiment through an advertising campaign that claims buying Japanese-brand vehicles built in the U.S. will cost American jobs because domestic automakers will further retrench.

"Made in America matters," said Jim Doyle, president of the institute, a group of retired workers from domestic manufacturers funded by Ford Motor Co. "If Americans think all cars are the same, we are more likely to lose more jobs in the U.S."

Foreign-based manufacturers like Toyota can identify models like the Camry as "domestic" cars because they meet the government yardstick of having 75 percent or more of their parts made in the U.S. or Canada.

But the Automobile Trade Policy Council, a lobbying group funded by GM, Ford and DaimlerChrysler AG, says the domestic content of all Toyota vehicles sold in the U.S.--including imported models--is 48 percent. Honda's is 59 percent and Nissan's 45 percent.

For GM and Ford, the domestic parts content is 73 percent, and for DaimlerChrysler, it's 72.

Dennis Cuneo, executive vice president of Toyota North America, says that argument ignores the fact that Japanese manufacturers built more than 3.7 million vehicles in North America last year.

"Ten years ago the debate was imports versus domestics, and now the debate is the domestic content of the vehicles," Cuneo counters. "Their idea of a level playing field is for us to make fewer cars."

While manufacturers and interest groups exchange verbal volleys over domestic content, Art Spinella, president of automotive research firm CNW Marketing Research, says consumers aren't paying attention.

Price stickers on new vehicles have been required to show the domestic parts content since 1994, and Spinella says "only about 2 percent of consumers even look at it."

To most car shoppers, a Toyota Camry built in Georgetown, Ky., is as American as a Ford Five Hundred built in Chicago. Indeed, using the government's standards, both have 80 percent domestic parts.

Sid Dechter of Hanover Park believed he was buying American when he bought his daughter, Kristine, a 2006 Toyota Camry as a graduation present.

"It's made in Kentucky so while it may have some Japanese parts, it's made in America and providing jobs in America," he said.

But on the jobs issue, Doyle still sees a major distinction between a Ford and a Toyota. Even after cutting thousands of jobs this year, Ford will employ 110,000 in the U.S., while Toyota will have around 32,000.

"So would you rather buy a Toyota built in Kentucky by a company with 32,000 jobs or a Mustang with parts made in another country, but from a company that supports 110,000 jobs in the U.S.?" Doyle asked.

Toyota's Cuneo says such thinking is misguided. He points out that Toyota, Honda and Nissan are net creators of jobs as they add manufacturing capacity in the U.S.

Honda just last week announced plans to add an assembly plant and some 1,500 jobs in the Midwest. The Big Three, on the other hand, are reducing capacity and jobs in the U.S.

"The reason for fewer workers is that we are more productive, which is good for the U.S. economy," Cuneo said. "Having people in a jobs bank getting paid for not producing isn't good for the health of any enterprise."

The "jobs bank" is a holding tank for United Auto Workers union members on long-term layoff who receive full pay and benefits for not working or for doing volunteer work.

"It drives the UAW crazy, but the fact they [foreign-owned assembly plants] can build more vehicles with fewer workers means they are much more efficient and the domestics more inefficient," said Dave Healy, an analyst with Burnham Securities.

"They say the more transplants built here, the more UAW workers lose jobs. Amen. According to GM's 10K report, their cost per hour in wages and benefits for UAW workers last year was $83 an hour. They can't live with that."

Healy also questioned the name of the group pursuing the jobs angle.

"Level field, that's a term that means some domestic company is trying to protect the field from fair competition," Healy said, alluding to Ford's support.

One aspect of the debate that is seldom analyzed is the significance of where each car company is based, and therefore where the profits go. Some would argue that the biggest difference between cars from Honda and GM is that the profit on an Accord--even one manufactured in Ohio--still goes back to Japan.

"I'm a union worker, so I stick with American vehicles," said Tom Wolfgram, an operating engineer from Lake Villa, who recently bought a Chevrolet TrailBlazer. "I want the money to stay here and be spent here so it creates even more jobs."

Cuneo, however, says the bulk of Toyota's profit stays in the U.S. to invest in new plant and equipment. He would not provide specifics.

Some analysts say as much as 60 percent of Toyota's overall operating profit and 70 percent of Honda's are derived from North America sales. Healy agrees on Honda's but believes for Toyota it's less than half.

Healy estimates that $30 billion of Toyota's $68 billion in North American sales last year were from U.S.- and Canadian-made vehicles. Moreover, as a "rough estimate," he says Toyota earned a profit of $2.4 billion in North America last year and spent the same amount on new plants, products and other investments.

"When they say they're an American company, they aren't lying," he said.

Additionally, the logic of buying a Ford or GM product because its profits stay in the U.S. isn't necessarily accurate. Because both are global companies, at any one point profits made from domestic sales could be invested in plants abroad.

As for Chrysler Group, it's based in Auburn Hills, Mich., but its DaimlerChrysler parent is based in Stuttgart, Germany, further complicating labels.

"The domestic content issue is grasping at straws. This isn't the Big Three any more. It's the Big Six," Cuneo said, referring to the growth of Toyota, Honda and Nissan in the U.S.

"All are global companies that source (parts and vehicles) in Asia, Europe, Canada or Mexico and build in the U.S."

And regardless, Spinella says, where a product is made and by whom matters little to most shoppers.

"Country of origin doesn't register with consumers," he said. "It's not that they are pro-Japanese as much as they are pro-bargain and value."

Domestic automakers pushed the legislation requiring domestic content labels as a way to inform consumers, but sometimes the information muddies the water about whether a vehicle is a domestic.

A major imported component such as an engine, transmission or drive axle can significantly lower a vehicle's domestic parts content.

For example, a seemingly red, white and blue vehicle such as the Ford Mustang has 65 percent domestic content, and the Chevy Suburban 67 percent. The Mitsubishi Eclipse is built in Normal, Ill., but the engine is made in Japan and it has 47 percent domestic parts.

That leaves some buyers, like Joe Stetina of Riverside, to make their own rules. Stetina traded a 1997 Chrysler Concorde (made in Canada) for a Toyota Matrix (also built in Canada).

His reasoning: He didn't want to buy an import.

- - -

Answers

Ford Escape Hybrid

Not domestic, 40 percent of content from North America

Chrysler 300

Not domestic, 72 percent

Toyota Camry

Domestic, 75 percent

Honda Ridgeline

Domestic, 75 percent

Dodge Caliber

Not domestic, 70 percent

Ford Mustang

Not domestic, 65 percent

Chevy Tahoe

Not domestic, 67 percent

Mitsubishi Eclipse

Not domestic, 47 percent

----------

jmateja@tribune.com

rpopely@tribune.com


Copyright © 2006, Chicago Tribune

http://www.chicagotribune.com/busine...i-business-hed

M TYPE X

Profits going back to Dearborn don't necessarily help American workers, as the jobs continue to go offshore or down to Mexico. Mexican-made Lincoln Zephyr, anyone?

TL Maestro

exactly. And for some reason it appears there are still a bunch of fools out there who think I'm factoring on where the car is made or whether it's creating jobs or not when I'm buying a car.

It's a car. I'm buying it based on it's reliability, performance, and style. Japanese cars are still the most reliable cars by a long-shot. Everything else is just opinion... but obviously most of us here bought our Japanese cars because we liked the performance and style too.

As soon as American cars have the bonafide reliability - packaged with the performance, style and quality that Japanese companies can dish out - I'll consider buying one.

sdho

both very interesting articles...

kansaiwalker1

another related article:

Buy American

By John McElroy

"Americans should buy whatever brand of car they want. But buying from the Big Three is better for the country.

Foreign auto makers have done a great job building cars in the U.S. At first, the “transplants” were little more than screwdriver operations, assembling kits they imported from Japan. But over time, they have added more and more value to what they make in America.

Today, they have styling studios, engineering centers and proving grounds in the U.S. Collectively, they employ tens of thousands of Americans and pay a boatload of taxes. A number of the vehicles they make here now have as much, or more, domestic content than their Big Three counterparts.

Even though the anti-import crowd points to all the profits that foreign auto makers repatriate to their home countries, I just shrug my shoulders.
What’s the profit margin on the cars they make here? Ten percent? That means 90 cents of every dollar they get from cars they make here, stays here. As an American citizen, I’ll take that kind of return every day.

And yet, despite all the benefits foreign auto makers bring to America, they don’t do enough – compared with the Big Three that is. They still import an awful lot of cars, nearly 3 million – the equivalent of importing the entire U.K. market every year.

And for all the value the foreigners have added here, they still don’t do their core engineering in the U.S. They don’t create platforms here. They don’t design the powertrains, drivetrains, chassis or suspensions. They don’t develop the electronic architectures. They don’t conduct the crash testing. All of this is done in their home countries.

Meanwhile, it’s General Motors, Ford and Chrysler that are doing the most recruiting at American colleges to fill every kind of job imaginable. They’re the ones buying the American-made super computers and hiring the people to program them.

They’re the ones doing the computational fluid dynamics here before they go into their wind tunnels. This is where they do their manufacturing engineering.

These are the companies with the greatest diversity of employees, supporting the greatest number of communities and adding the most value to the American way of life."

http://wardsauto.com/commentary/buy_American_campaign

mrdeeno

And if all this translated into a better product, maybe more people would buy the products?

Maybe the big-J-3 (hond/toy/nis) should get together and do their own campaign..."It may be unpatriotic to buy our cars...but our cars don't suck!"

F23A4

LINK


I will confess that one of the prominent reasons why I purchased my 02 Maxima and 05 Murano was that they were almost entirely built in Japan (100% on the Maxima and 95% on the Mo). However, I am now less likely to dismiss the purchase of American cars. (i.e.: I actually like the Mercury Milano's style alot but IMHO it needs that forthcoming Ford 3.5L V6 NOW.)

The domestics have made some serious inroads in styling, performance and quality. I think some credit should be given some credit to them for the attempt at providing some semi-attractive offerings. (What they offered 10 years ago was pretty weak. .)

That said, I am still generally more likely to purchase an Accord, Camry or Altima over a Fusion, Impala or Stratus.