"American" cars vs "Foreign" cars

Discussion in 'Politics, Religion, Social Issues' started by yg17, Nov 17, 2007.

  1. yg17 macrumors G5

    yg17

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    St. Louis, MO
    #1
    No, this isn't which one's better, this is about the economic side of things.


    I saw a story on the local news the other night about this. In St. Louis, there's a guy, Dave Sinclair who owns a few dealerships for I think Ford and Chrysler and all of his commercials say something along the lines of "Buy American, even if you don't buy from me, because its patriotic." So the reporter interviewed this guy, then they also interviewed an economist at St. Louis University, to get her take. She claims that where a car is built doesn't have an impact on the US economy. Car industry, yes, economy as a whole, no. She said that you should buy what makes you happy. So in response to the economist, Sinclair says that she is wrong and it does matter. (One's an economist at a highly regarded university, one owns a bunch of sleazy car dealerships with sleazy salesmen who, like all car salesman, only care about the economy of their wallet. Who do you believe?).

    The reporter goes on to mention to Sinclair that a lot of the American cars are assembled in Canada or Mexico with most of their parts coming from foreign countries. And the foreign cars are built here in the US with most of their parts coming from the US. So Sinclair says, in what I think is the biggest cop-out and a sleazy car salesman tactic, that he does sell only American cars....North American cars. Did Japan annex the section of Ohio where the Honda plant is? Or what about the Hyundai plant in Alabama, surely, that land can't belong to South Korea. He also claims that when you buy a "foreign" car, all the money goes overseas. So I guess those factory workers in the US don't get a paycheck? The people working in the home offices in the US also work for free? Gee, what a crappy job that must be.

    Obviously, from my commentary, you can tell I think this guy is a bloody idiot. I have a Hyundai that was built in South Korea and I have a Volkswagen GTI on order that was built in Germany. And even though my cars were not built in the US, I'm still helping out our economy. The salesman gets some money. The contractors who built and maintain the dealership's building wouldn't have jobs if people didn't buy these foreign made cars. The people who work in Hyundai's and VW's American offices get a chunk of my money in their paycheck. The truck drivers who get cars from the port to the dealer thanks to me and other foreign car buyers. The mechanics have jobs thanks to us. Hell, the VW dealer I bought from is building a new building right now exclusively for Volkswagens. If people weren't buying VWs, wouldn't some American construction company be missing out on a multi-million dollar contract? The Hyundai dealer I bought from also does Suzuki and Nissan, and just put up a separate building exclusively for Nissan and they're building a new one just for Hyundais. Again, many jobs created as a result of those new buildings. The list goes on and on. If all of these foreign brands didn't exist in the US, regardless of where the car is actually built, a lot of people here, in the US, would not have jobs. I don't care if a Toyota is built here and I don't care if a Chevy is built in Mexico (although, IMO, it is rather hypocritical to buy a Mexican built car when you do spew the "Buy American" BS).

    Nonetheless, I think this may bring up a good discussion. Are us foreign car drivers really unpatriotic because of what we buy? Is the Ford driver somehow more American than the Honda driver because of his car? Does it really matter where the car is built? Any other burning Automotive Economics 101 questions you want answered?

    Please, discuss something, I didn't type out this long post for nothing :p
     
  2. CorvusCamenarum macrumors 65816

    CorvusCamenarum

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    Birmingham, AL
    #2
    We don't just have a Hyundai plant, we've also got Mercedes and Honda here too. I really can't speak for the Honda plant, but I know a lot of people who work for Mercedes. Around here, it is *the* place to work. The wait list just to get an interview is something like 2 years long, and they treat their employees extremely well (happy = more productive).

    I'm going to go out on a limb and wildly speculate here. Maybe it's not just endemic among Americans, but there seems to be an unspoken cultural notion that "our" widgets are perceived to be the best. If we hold our widgets to be the best, then supporting an exotic (i.e. not "us") widget maker is somehow wrong. Pulling from your example, if I were to buy an M- or R-class Mercedes (both built not 15 miles from where I sit), then I'm perceived to be doing a disservice to those hardworking, red-blooded Americans who put together things with Ford stamped on them instead. Never mind that my area employs about 15,000 people both directly and indirectly in the service of putting those M- and R-class vehicles together.

    There's probably more I want to say, but it's late and I'm tired. Hopefully some of it made sense.
     
  3. sammich macrumors 601

    sammich

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    Sarcasmville.
    #3
    You are absolutely correct in agreeing with the economist, buying products which have had some local interaction will of course benefit these people who have been involved along the final production line (the shipping and the sales). First and foremost is the creation of local jobs, because the money paid as wages to those people go back into the American economy. But as of late, as i'm sure you know, car companies which have been the mainstay of the American Car Industry are down in the ditches (GM, Ford). This has caused many people to lose their jobs due to downsizing, some of these jobs (not all) will be displaced due to international car companies moving in. BUT the most important difference here is that all of the profits will be going OVERSEAS, not back into the American economy.

    Take the recent influx of Chinese made products into the US. They are very cheap and relatively well made. But now the US has a large trade deficit with China, and where do those US$ go because of that debt? Away from US soil.

    I live in Australia, and I'm very familiar with local iconic products being bought by overseas companies. Campbell's Soups buying our Tim Tam's, Ugg boots, Vegemite. A more recent attempt, Qantas, which failed spectacularly. This is bad since locally produced products are better, the money being made is put back into the community. Fat businessmen overseas just see opportunities to cut costs, and that money is gone.

    Given the strong patriotic sense of buying local (believe me, we Aussies get it too), just how much money from your GTi (which is a great car btw) if it was built on US soil, actually makes it back into the American economy as opposed to if it was built overseas?
     
  4. Thomas Veil macrumors 68020

    Thomas Veil

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    #4
    It isn't as simple as saying that because the workers are paid, the money stays here. The salaries stay here, but the company profits do indeed go overseas. And even then, that employee compensation has been bargained down because the workers are non-union, which drags down the compensation for the American company autoworkers since the American companies have to stay competitive. (If you're thinking, "Well they deserve less compensation for making crappy cars," first that's largely no longer true, and second, it's still less money available to employees to buy goods and services, and that's never a good thing.)

    I don't know how much of an objection this still is, but a couple of decades ago, another reason for objecting to foreign cars was that Japan was notoriously closed to fair trade. Try to sell Chevys (or anything else American-made) in Japan, and the government assisted their domestic companies in putting up all sorts of barriers, some of which were absolutely ridiculous. There was an instance, for example, where the Japanese government refused to allow the importation of American-made skis because their snow in Japan was "different" than ours, and therefore our skis were not up to their specs. :rolleyes: That was one of the more egregious examples, but a lot of others weren't that far behind.

    Dealing with Japan's trade industry was like dealing with the Bush administration: there was always some roadblock or excuse for not allowing America in. So you can see why some people back then objected to Japanese-made goods. I don't know if this is still the case today. I'm sure it's gotten better, but I don't know if it's entirely reciprocal.
     
  5. adroit macrumors 6502

    adroit

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    Victoria, BC
    #5
    American billionaire getting richer vs. Japanese billionaire getting richer doesn't make much of a difference to the local economy. It's the salaries of the little guys that help the most. The Waltons are a good example of that. If you are so concerned about profits going to Japan, buy some Toyota stock and you'll get some of that profit back.
     
  6. Swarmlord macrumors 6502a

    Swarmlord

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    #6
    Now I'll feel even better when I purchase my next Mercedes Benz.
     
  7. yg17 thread starter macrumors G5

    yg17

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    St. Louis, MO
    #7
    Ditto. It's the little guys that count, and the little guys here will have jobs regardless of where the car is made. I couldn't care less if the profits from the car I bought go into the pockets of a billionaire German CEO instead of a billionaire American CEO. The German CEO won't notice my money's there, and the American CEO won't notice my money's missing.


    TV, I'm not sure what the status is on American cars in Japan now, but they're only a small piece of the puzzle. American cars (or at least cars made by American owned companies) are quite common in Europe. You have all of the European-built cars owned by American companies (Like Toyotas being American-built cars being owned by Japanese companies). There's Jaguar, Volvo, Land Rover, Mazda (Ford), Opel, Vauxhall, Holden (Australia only?), Saab (GM). Plus cars like the Ford Focus and Fiesta which are popular. So in that sense, it is somewhat reciprocal. I might buy a Volkswagen and send some money over to Germany, and someone in Germany buys a Ford and sends some money back here.


    In this day and age, where a car is built just seems irrelevant. If you like it, buy it.
     
  8. Peterkro macrumors 68020

    Peterkro

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    #8
    The thing here is these companies are owned by multinational capitalists,the money doesn't stay in the country of production,minimal or no tax is paid on the profits,workers in one country are played off against those in another,appeals are made to buy your "local" vehicle to help "your" country. What a joke,wealth trickles down, my arse.
     
  9. skunk macrumors G4

    skunk

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    #9
    Perhaps you could rephrase that. ;)
     
  10. Thomas Veil macrumors 68020

    Thomas Veil

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    #10
    But that's one point I was trying to make:
    Not that that's happening only in the auto industry.

    It's a complex issue, no doubt. I think the "Buy American" guy would've gotten more support in the '80s, before Honda and Toyota and other companies opened plants here. Back then all those companies were doing was taking jobs away, not replacing them. (Not that I think those companies did it out of the goodness of their heart. I'm sure it had more to do with avoiding tariffs than anything else.)

    But I don't buy the economist being correct either. If there's anyone as shady as a car salesman, it's an economist. :D
     
  11. theman macrumors 6502a

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    Jul 26, 2007
    #11
    My family has never had an american car. My parents are really concerned about safety and had bought nothing other than Volvos since the 70s. After they got bought by Ford, and we had a pretty bad experience with the quality control of one of them, we bought a Toyota, and then an older model BMW just kind of for fun (turned out to be a bad idea since it's a really crappy car that sort of fell apart).

    american cars just seem such lower quality and especially because of the safety reputation (only in the last few years have all the other companies been catching up to Volvo, Mercedes, etc. in terms of safety.)

    We live in Michigan where our economy is going to HELL because of the auto industry. Highest unemployment rate, more crime, terrible cities (detroit, flint...). And all the replublicans want to do is blame the governor and try to cut taxes more and more and bankrupt the government... it's terrible. I just blame the companies for being greedy, making low quality cars and having CEOs who care less about making a quality product and more about lining their wallets. I feel no obligation to help them and buy their cars. I just wish it wasn't this way. A lot of people here are really hurt by these companies' decisions.
     
  12. Desertrat macrumors newbie

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    Jul 4, 2003
    Location:
    Terlingua, Texas
    #12
    I've been ""bending wrenches" for a helluva long time, as an avocation. Home repairs, hot-rodding, sports car racing. I guess I've overhauled somewhere near a hundred engines, these last nearly-fifty years.

    I have no gripe with American engines vs. foreign engines. Generally equal, although American engines are easier to work on. Japs are bracket-happy, wihich is a PITA.

    I bought a used 2000 GMC PU with 50K on it. Now up to about 135K. I really ought stick a set of plugs in it, but it's within one mpg of when I bought it.

    I bought an '85 Toyota 4x4 PU, new. I've gone through the engine a couple of times, but the crank is still original. 294K miles.

    Generally, American transmissions are much better.

    But "Buy American" is pretty much a joke, and has been for around thirty years. Parts and pieces come from all over.

    Back in the 1970s, the big hollering was, "The industrial age is over. We're going into the information age." Well, it seems like what we in the U.S. have done is have some folks into information, and the rest into consuming. And nobody seems to have paid much attention to why we left the smokestack era and moved on--or what career to take up.

    We're good at blaming "they" and others for our own problems--most of which we've brought on ourselves.

    Folks either forget or never knew that New England jobs in the textile mlls got outsourced to the Carolinas, or that folks at the Stuebaker Wagonworks had to learn about building cars. And the folks at the buggywhip factories had to find a new line of work.

    The world continually changes. Problem is, folks always seem to think that change is what happens to somebody else, not them.

    'Rat
     
  13. Sun Baked macrumors G5

    Sun Baked

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    May 19, 2002
    #13
    Final profits on the SALE of the vehicle go over seas.

    The profits on the parts/vehicle content made here go to the companies making them, the salaries stay here and are spent here.

    There is a bigger impact on the US economy for a foreign car made here, than for a US company car made in Mexico/Canada.

    So a Toyota Camry from Kentucky likely has a bigger impact on the economy than a new Ford from Mexico.

    ---

    As far as the economist...

    If US jobs and factory jobs in the US don't have any impact on the economy, why would she likely complain about outsourcing US jobs overseas? And I imagine she does when she starts in on Walmart.

    But when it comes to jobs, a factory job at $20/hour will have more impact than a Walmart job at $8/hour.

    Sort of sucks that factory jobs are becoming jobs, and not careers you can retire on though.

    While it is true that people will be employed anyways, a factory job will likely pay more than some of the other unskilled jobs.
     
  14. yg17 thread starter macrumors G5

    yg17

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    #14

    And that's fine with me, I don't want someone making minimum wage putting together my car ;)
     
  15. Peterkro macrumors 68020

    Peterkro

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    #15
    The comma is very important.:)
     
  16. solvs macrumors 603

    solvs

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    #16
    I bought a Chevy. It's a great car, but it was made in Mexico. So much for buying American. Make of that what you will.
     
  17. edesignuk Moderator emeritus

    edesignuk

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    Location:
    London, England
    #17
    Interesting article from the BBC about how Toyota are carefully plotting to take over the core American truck market:
    Other good articles:

    The decline of Detroit.

    The triumph of lean production:
     
  18. iGav macrumors G3

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    #18
    Of course. We'll ignore Toyota executing the two largest mass recalls in history for shabby workmanship shall we. :p :p :p
     
  19. solvs macrumors 603

    solvs

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    #19
    If it's anything like the rest of corporate America that I've worked in, quantity is more important that quality.
     
  20. edesignuk Moderator emeritus

    edesignuk

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    #20
    When was this? Is this a recent thing or from decades ago?

    Either way, you can't argue the reputation Toyota have built for quality and reliability.
     
  21. solvs macrumors 603

    solvs

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    #21
    I thought that was Ford for the Pinto. Or was that the Corvair? Which was the one that exploded, but they decided it was cheaper to pay victims and their families off instead of issuing a recall, then wound up having to pay out a massive settlement and issue a recall anyway?
     
  22. bartelby macrumors Core

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    #22
    I thought Nissan and Mazda had the biggest...
     
  23. iGav macrumors G3

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    Mar 9, 2002
    #23
    In the last couple of years... one recall was several hundred thousand motors, the other topped a million.
     
  24. Big-TDI-Guy macrumors 68030

    Big-TDI-Guy

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    #24
    Solvs - Wow, that sig man - U need a hug or somethin?

    That's a newly-single persons sig if I've ever seen one. ;)
     
  25. bartelby macrumors Core

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    #25
    Toyota's largest = 1.4 million

    Nissan's largest = 2.5 million
     

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