By Allen Penticoff
When I evaluate new cars that I review I always inspect the window sticker for “Domestic Content.” This bit of information is more a source of pride rather than any indication as to the quality of the car. Auto parts are made all over the world, and the parts in any one new car can be from all over the world. The Big Three American auto builders, General Motors, Ford and Chrysler use parts from outside the country, and in some cases the cars are assembled outside the United States and sold in the U.S. as though they were American made. This is what has led to a statement of content and point of assembly on the new car sticker. To some buyers this matters very much.
For many years, starting in the 1970s, Japanese auto makers entered the U.S. Market and began to establish a larger and larger market share with their high quality small cars while “Detroit” continued to build the same way they always had – cars often of poor quality and equally poor efficiency. The first oil embargoes in 1973 really established the Japanese car as the new force in auto ownership. Eventually the Big Three would catch on and mimic the Japanese way of designing and building cars. Today there is no discernible difference in who builds what where. Nearly all new vehicles are of high quality and serve our needs quite well. They last a long time with little major maintenance required.
Now many of the overseas manufacturers have built assembly factories in the United States and Canada. At first, these factories were established to placate the American consumer who was anti-foreign car, with the parts still largely sourced overseas. But today the parts are as likely to be made in the U.S. as overseas, in large part due to time and cost issues of shipping across oceans.
At the 2015 Chicago Auto Show I heard a presentation for the Economic Club of Chicago by Nissan Motor Company’s Executive Vice President and Chairman, Nissan North America, Jose Munoz. As he introduced himself, Munoz explained how worldwide auto building had become. Here he was, a Spaniard, running a Japanese company, building cars in the United States.
Nissan has been building cars in North America in Smyrna, Mississippi since 1983. In 2014 they became the highest volume manufacturer in North America. Indeed, on a recent trip across Tennessee, I saw many car hauling trailers loaded with Nissans on Interstate 40. Munoz stated that since 1981 Nissan has spent $10.1 billion on U.S. manufacturing and created 22,000 jobs building 13.7 million cars and trucks. They have also made 570,000 lithium-ion batteries and recently built a factory here to build the all-electric Leaf. Munoz said Nissan expects to have a fully autonomous car on the market by 2020. That’s a car that can drive itself – in five years.
Munoz was very proud of the Mississippi workers and Nissan’s commitment to the community, pouring millions of dollars into education and training so that the community can continue to meet their needs for a well educated workforce.
Other foreign automakers are doing similar things. At another address, I heard from Alan Batey, General Motors’ Executive Vice President and President, GM North America. Beaty’s talk focused more on GM’s rebound in sales. He said GM vehicles were number one in sales in the Chicagoland area. He said that compact SUVs comprise 1 of 5 sales across 17 million vehicles they sold in 2014. GM’s Buick line is rated #1 in customer satisfaction, with overseas sales of 1.2 million cars. GM has already seen a 29 percent increase in sales in January 2015 and he reported 73,500 Cadillacs have been sold in China. Overall, Chevrolet is up 4 percent in 2014 and claims to be the fastest growing global brand. Batey was proud of the 25 new technologies coming out in GM vehicles and said that even the diminutive Spark will be available with 4GLTE mobile internet technology. He concluded that GM has learned from its mistakes and intends to “stay hungry and hustle.”
I hope this trend of “re-shoring” continues, and that good paying middle class jobs with America’s auto industry return. It was these jobs that built the United States into being the world leader that it is today. When you shop for a new car, do look on the sticker at domestic content and point of assembly – and disregard who the maker is. Buy with the highest domestic content and build you can find. It is serving your own best interests to do so.