The concept of "American Made Car" has lost all meaning
There was a time in this country when the term “Made in America” had some intuitive meaning. It meant that the cars and trucks were built in America, by an American Company that paid taxes on its profits to the US Government, by Americans, from American sourced parts. By this definition there is no such thing as an American car or light truck anymore. We can bandy about what is and what isn’t more or less American made, but let’s take a look at the facts and see if there really is any point anymore.
Car Companies Headquarters and Federal Income Taxes
Let’s get one thing straight. General Motors didn’t pay any taxes on its profits last year. And the business plan is to keep that trend alive as long as possible. Click here for details on that. Forbes reported recently that Morgan Stanley projects GM won’t pay any taxes on its profits until 2018 – and that assumes 39 profitable quarters without any major losses. The reason for this is that when it emerged from what was termed bankruptcy, the new GM was allowed to keep its losses as offsets for future taxes. So if you think that where a company is incorporated makes any difference to the American government in terms of revenue, guess again. No word on 2012 yet for Ford, but in 2011 guess what it paid in taxes on its profits? Here is the answer.
Where “American” Cars Are Made
Is a Chevy Camaro an American Car? It is made in Canada, which is in North America, but not part of the United States. How about the “Like a Rock” Chevy Silverado. Some are made in the US, some in Canada, and last year fully ¼ of them were built in Mexico. The Ram (formerly known as Dodge Ram) 1500 pickup – Also made in Mexico. Surprised? How can the union-favorite pickup trucks be made in Mexico and Canada? The union isn’t called the “American Autoworkers.” It is the United Autoworkers. Get the message? Surely Ford must make its work vehicles in the US, right? Let’s take a look at the hugely popular Ford Transit Connect. Made in Turkey and put on ships (burning oil by the way) and brought to the US for sale. As American as anne ve elmali pay (mom and apple pie).
Parts and The American Made Label
Your tax dollars went a long way to helping Chevy bring out the Chevy Volt. This marvel of an American car was intended in part to help reduce our reliance on foreign oil. Maybe it is, but the single most expensive component in that car is the lithium ion battery pack. Made in Ochong South Korea by LG Chem. This is so blatantly not American made that in order to cloud the issue they are pretty much finished off in Korea then shipped to Michigan for final assembly, then to another location in Michigan for final packaging into the battery compartment of the Volt. GM’s press release was careful to point out that GM actually sources the batteries from LG’s Troy Michigan subsidiary. Therefore the part is sourced from a US manufacturer, right? Good try. The parts from companies headquartered outside the US are not always so hard to find. Walk around any showroom in America and count the Michelin (French company) or Bridgestone (Japanese company) tires you see.
Car Companies and Manufacturing Point
Car companies, regardless of brand and where they are headquartered do pay a lot of taxes. They pay payroll taxes on their worker’s earnings and they pay state taxes on their real estate (unless given a waiver to move to the area). More importantly, they pay the worker’s salaries, and in most cases the majority of the worker’s health care costs. That means the mortgage, food, clothing, medicine, doctor visits and much of the income earned goes to local businesses. So in fact, one of the biggest, if not the biggest factors in considering if a car or light truck is “American made” is to determine where the car is assembled and where the major components are sourced from.
Where Are American Made Parts From
Good luck figuring out where parts come from. Is a transmission a “Part” of a car? In a recent study by American University’s Professor Fran DuBois, parts like a drivetrain were looked at closely. The conclusion is summed up by DuBois who said “If you break down a single “American-made” transmission, you’ll find many smaller parts, each stamped with its own country of origin. You may well find 80 percent of the parts inside that transmission didn’t come from the U.S.” Professor DuBois concluded that the most American made car of all is the Toyota Camry (in a tie). Cars.com also came to the same conclusion. The most American made crossover vehicle was the Honda Pilot, which was ranked 5rth overall by Cars.com. Honda exported its one millionth Accord built in the US recently. The national Highway Traffic Safety Administration (NHTSA) gave its nod to the Toyota Avalon.
Like a lot of old-fashioned concepts and terms, the expression “American car” will soon join expressions with a familiar ring, but little real meaning, such as car-phone, mail a letter, and lamp-oil.