Defining "American manufactureres" - and how do they stack up?


#1

(Thought this MUST have been a blog on and off - however thought it would generate some good discussion.)



FIRST: All manufacturers (auto and otherwise) have parts from around the globe go into their product and assembly, research, development and other centers / factories also in many countries to boost the global image and sales power in foreign markets. See stickers, labels, call centers, whatever, the global world is expanding and the sub structure supporting these global companies are very diverse. What does it mean to ‘buy American?’ So WHAT MAKES an ‘American manufacturer’ American?



Second: ‘American manufactures’ fight against other overseas competition for product quality, safety, performance, and other ways of gaining an edge in that ever important quest for the sale and capital earnings for more product, growth, and for the earnings for the investors. Are these defined ‘American manufactures’ meeting the grade? It depends on where we turn, every agency and company has an opinion - what’s YOUR thought on this? How do ‘American manufactures’ stack up?


#2

It ranges from much better to much worse dependant on the particular make/model you buy.

As a generalization and lumping all models together and what COnsumer Reports shows:

  1. Asia
  2. Domestic but close to Asia and gap is narrowing every year
  3. Europe - lagging behind Domestic and gap may even be getting worse

#3

From what I see they don’t stack…And it’s mainly to do with the culture of American Big Business in general. Companies that are publically owned answer to their stock holders. The Big US companies are looking at their NEXT QUATERS profits…PERIOD. They have very short vision. This short vision is what’s killing them.

They are also very very slow to change. GM has had a MAJOR problem with their intake manifolds over a very long period of time (OVER 10 YEARS0. Lets look at Toyota. A few years ago they were having a sludge problem with their V6 engines (mainly the 3.0). The problem was detected and cleared up by Toyota 2.5 years. On the other hand GM has recogonized that there’s a problem with their intake manifolds but have NOT addressed it.

Every automanufacturer has problems…it’s how you deal with the problems that defines how good a company is. 30 years ago GM would have delt with a this intake manifold problem in less then 3 years. What ever happened to that GM I don’t know.


#4

An ongoing argument, and even Consumer Reports is sometimes confused. The way I observe it:

1.The line between domestic and foreign is becoming blurred. Ford owns most of Mazda and they have joint plants in the US and Mexico. Ford’s best plant wordwide is in Hermosillio, Mexico. This plant has the best quality control and productivity. The new Fusion is built there, for instance. Strangely, a Ford Escort coming out of this plant had a lower reliability than a Mazda, because Mazda has better Engineering. As I mentioned in a privious post, Ford has made the Crown Victoria deliberately into an “import” by using more than 50% foreign parts, so as to exclude it from the CAFE standards.
2 Car companies are buying each other up. So Renault owns Nissan, and shares a lot of engineeing between the 2 firms. Since the aquistion, Nissan has made money, but the quality and reliability are not what they used to be. Ford also owns Land Rover (poor reliability), Volvo (good reliability, for Europe)and Aston Martin until recently.
3. Many US cars are actually built in Canada, since the 2 countries have had a free trade agreement in place for many years. The Crown Victoria and Lincoln Town cras will be built in Canada until they are discontinued. The Buick Regal, and Chev Impala were built in Canada, as was the Chrysler mimvan series. Cars built in canada are treated by the US governmenbt as domestic, since Canada buys an equal number of cars from the US. My wife’s Nissan Sentra was built in Smyrna, Tennesee, I believe.
4. As per the previous poster, the quality gap between Asia (Japan, Korea) and North America is narrowing. This year Consumer Reports will proclaim the Ford Fusion a better car than the V6 Camry. Europeans, on the other hand are going from bad to worse. There is a post about an unhappy Mini owner who had every imaginable problem, and this car was designed by BMW! These are problems Americans dealt with in the mid 1950s, but have long since left behind. Europeans accept a lower level of reliability, and trade their cars earlier. There is a thriving export market for used European cars to Africa and other aras and countries with no car industry. Nigeria is full of 10 year old Mercedeses; you cannot import a new car into Nigeria unless you are a company. Europeans have most of their problems with power equipment and engine management systems. These are things the Japanese seem to engineer in their sleep.
5. I predict that the Chinese will learn to build quality cars in less than 10 years and will overtake Europe in innovation as well. The only European car I could recommend quality-wise would be the 4 cylinder Volkswagen Passat whcih now has an average repair record.
6. It is hard to find a truly American car anymore. In pickup trucks, the full size units are still engineered in the US, but your favorite truck may be built next door in Canada.


#5

To me an “American Manufacturer” is one whose corporate main offices are located in the U.S. From a manufacturing standopint, and even from a design standpoint, all major manufacturers are now “global”. As a metter of fact, I personally think Bill Ford is focused far too heavily on developing Ford’s “global platform” at the expense of focusing on product. I think Ford is suffering from that. My sense is that Bill Ford’s background is all in management and accounting and not in design.

Here’s how I stack them up.
Ford is focused on the business and not the product. Ol’ Bill seems to have lost the link to what it was that Henry built the business on…cars for “everyman”!

GM is way too risk-averse and clogged with committees. They won’t risk enetering a new market segment until it’s been established for years, and then it’s too late. They’re followers, not leaders. I offer as evidence the “retro” designs like the HHR and the Camaro, the Solstice and Sky, and even hybrids. All those market segments had been thproughly exploited for years before GM tried to enter them.

Chrysler was saved by innovative product. Unfortunately, they somehow ended up being a “b****rd child” of Daimler. We’ll see how private ownership suits them.

Toyota is starting to slip. They’ll lose their dominance if they don’t get that corrected. Their strengths are that they’re still amoung the best in quality and they’ve established a pretty good foothold in the hybrid market.

Honda has become stale. They need some new blood, although

Honda has grown stale. They really only dipped their toe in the hybrid market. They’ve got a pretty solid following amoung the young kids with the Civic, but Toyota has made a dent in that segment with the Scion, so Honda needs to watch out.

Tomorrow’s big player will, in my opinion, be Chery automobiles. They’ll come in with a sub-$10K econobox that’ll be a copy of the designs of others and they’ll sweep the bottom end of the market clean.


#6

On the chinese learning to build a car:




And they say American made products are crap…

edit: I had seen some guy do a mini documentary on his Chinese SUV where it was 2 years old, but it needed 2 new alternators, new starter, his passenger door wouldn’t open right, and an engine that looked like it came out of a 70s or 80s Pinto with a bunch of vacuum lines everywhere.

though, I guess, since China is pretty overpopulated, these kinda cars will make for population control…


#7

Yeah…but I remember when everyone said Toyota and Honda made little cheapo junk cars. Their original entries into the U.S. marketplace were not stellar vehicles.

Any manufacturer that underestimates the Chinese does so at his own peril.


#8

The chinese are perfectly positioned to enter the auto export market. The are in the same position that japan was in the 50/60s, with plenty of inexpensive labor. Today, japan is about where the U.S. was in the 70/80s with increasing labor cost and significant competition. I expect that japan will continue to outsource more and more manufacturing while trying to maintain brand identity (just like the U.S. is still trying to do, with limited success). I also expect that the chinese will graduate from making auto components to manufacturing autos for both internal consumption and export in the next couple of decades. At some point the chinese with take the low end U.S. market away from japan and korea, by then the U.S. auto industry will probably be completely gone.


#9

To answer the original question, the term “american manufacturer” is meaningless, and has been for some time. Some of the asian/euro cars have more american labor in them than some cars made by the “big 2-1/2” these days. If you insist on buying a new or late-model car, evaluate each make/model on it’s own merits and ignore it’s “nationality.”


#10

To be a American product does it not have to have a certain percentage of American content? Shipping a bunch of parts across the ocean and bolting it all together in the US does not make for a American product or a manufacture. Assembly is only one step out of many steps in the process of manufacturing. I thought at one time the percentage of American content was listed somewhere on new cars


#11

Shipping a bunch of parts across the ocean and bolting it all together in the US does not make for a American product or a manufacture.

I guess that GM and Chryco are NOT American Products. The Honda Accord uses MORE American made parts and American workers then MANY GM, Ford and Chryco vehicles. Chryco and Ford are the worlds LARGEST buyer of Japanese and Korean robotics. So I guess that because the Robotic arm that makes the American car is here in the US the vehicle is considered American made??? GM has a great deal of plants in Mexico that import vehicles back to the US. Are those vehicles American or Foreign???


#12

Well said. As a veteran “label reader” I keep track of where everything is made; and out of the last 100 items I purchased 85 came from China. My mother-in-law likes trusted brands like GE, Westinghouse, RCA, etc.I had difficulty telling her that her GE phone is made in China and the brand is owned by Thomson Electric, a French consumer goods firm which purchased the GE and RCA names for electronics goods when GE went out of that business. Globilization is here to stay. Your next new car will no doubt have parts from all over the globe, even if it is assembled in the US. The computer I’m typing this post on is a Dell laptop, assembled in Malaysia from components from China, Taiwan, Korea, Thailand, and, yes, even Malaysia. The only thing American is the instruction manual. Michael Dell is a true globalist, but most of his profit is retained in the US. An excellent book on globilization is Robert Friedman’s book “The World Is Flat”. It makes for fascinating reading.


#13

I also thought “The World Is Flat” was an excellent book, it is definetly pro-globilization, but I think it takes a realistic look at the issue. Certainly more productive than whining about it.


#14

As I mentioned in a privious post, Ford has made the Crown Victoria deliberately into an “import” by using more than 50% foreign parts, so as to exclude it from the CAFE standards.

Just a slight correction here. Import cars also have to comply with CAFE standards. CAFE stands for Corporate Average Fleet Economy. It means that the average fuel economy rating of all the cars a company sells must average out to some amount. When this was first set up the Big 3 started to import a bunch of small foreign cars to bring their averages up. The Feds then declared that averaging in these foreign built cars with domestic built cars was cheating, so they split them up. All domestic built cars from a particular maker were avereged together and the foreign built cars of that same make were averaged. Both import and domestic “fleets” had to meet the standard on their own. This is why Ford moved the Crown Vic to the “foreign” source category. The one big car in the line was offset by mostly small foreign sourced cars.


#15

Mike, You forgot the rest. To be a American product does it not have to have a certain percentage of American content? Assembly is only one step out of many steps in the process of manufacturing. I thought at one time the percentage of American content was listed somewhere on new cars.

Please don’t partial quote me. I made no reference to any Auto manufactures. Here is a List of percent of American parts http://www.leftlanenews.com/new-data-analyzes-american-content-in-cars.html What about research development and Engineering. Those percentages don’t include that stuff. The BLOG below the list is interesting.


#16

This topic has been discussed TO DEATH. Many “foreign” cars are manufactured in the US (Toyota, Honda, Hyundai, Subaru, etc.), and many “American” cars are manufactured in foreign countries (Mexico, Canada, Germany, Korea), so what’s the point?

Buy whatever you like, and don’t worry about where it came from. If this matters to you, and you really knew where your car came from, you might not be happy.

Personally, I’m delighted that both my Acura and my Subaru were built in America. Some of the parts may have been imported, but both of the vehicles I currently own were assembled in America by Americans.

What are you driving?


#17

That article has several flaws…It paints a broad brush across the entire manufacuter line. As I said there some GM/Ford and Chryco cars that use a LOT of foreign parts…more then what Honda or Hyundai uses.

As for Research and engineering…Current MOST of GM and Ford is here in the US…But they are both building LARGE Engineering Campuses in India and China…large enough to house 10,000 engineers. Both are expected to be complete by 2010. With that many engineers working in India and China…what possible engineering jobs will be left here in the states.


#18

I atill think it’s where the corporate headquarters is located. If GM moved its corporate headquarters to Bulgaria, then to me it would be a Bulgarian car!

Everything else is global. Even design work is contracted from firms in other countries. There’s one Italian firm, I forget the name, that designs lots of bodies for lots of manufacturers in lots of countries.


#19

Both my cars, a Nissan Sentra and a Toyota Corolla were built in North America. Both have very limited “offshore” content. Of my previous cars, Chev Caprice, Chev Impala, Olds Delta 88, Ford Granada, Dodge Colt, Chev Malibu, Mercury Comet, and Dodge Dart, only the Dodge Colt was offshore & made in Japan.


#20

“Buy American” means to buy a product manufactured by a union shop in the USA. At least it meant that 30 or 40 years ago when the phrase was coined and for many years after. I still think of it that way, though I’d include Canada (Buy North American?) for automobiles since the UAW operates there, too.