Published December 10, 2008
When GM, Ford and Chrysler pleaded their case for a multibillion-dollar bailout, the automakers' CEOs told Congress that letting their companies fail would diminish the choices of patriotic Americans who want to buy American cars.
But buying a Honda or a Toyota or any one of several other "imports" can be buying American, too.
Many "foreign" cars built by the Big Three's competitors are made in the U.S.A. — coming off assembly lines from South Carolina to California and providing jobs for tens of thousands of Americans.
"We make them here and they're built by American citizens and increasingly we're designing them here," said Kim Custer, spokesman for the Association of International Automobile Manufacturers, which represents Toyota, Mitsubishi, Honda, Nissan, Hyundai, Kia, Isuzu, and Subaru.
"In fact, 55 percent of the vehicles our companies sell here are built here," he said. "More than half of our sales are products made here, and we consider ourselves part of the American auto industry. We have about 95,000 employees around the country."
Honda, for example, has manufacturing plants in Marysville and East Liberty, Ohio, in Lincoln, Ala., and last month it opened a plant in Greensburg, Ind., that will employ about 2,000 people. Honda manufacturing facilities employ about 14,000 people in the U.S.
Another Japanese giant, Toyota, produces its Camry, Camry Hybrid, Solara, Avalon and Venza models at its plant in Georgetown, Ky., where it employs about 7,000 people. Another 5,500 work at the company's plant in Freemont, Calif., a joint venture with GM, and 4,500 Americans work in its Princeton, Ind., facility.
Toyota will begin making its popular Prius hybrid in a plant under construction in Blue Springs, Miss., in late 2010, the company said. When the Mississippi plant is online, Toyota will have almost 21,000 employees in its U.S. manufacturing facilities.
European cars are also being born in the U.S.A.
According to a study released in September by the Moore School of Business at the University of South Carolina, the BMW plant in Spartanburg, S.C., has pumped about $8.8 billion into the state's economy and created about 4.3 jobs statewide for every one job at BMW.
Mitsubishi, Mercedes-Benz, Subaru, Nissan and Hyundai also have U.S. plants that employ American autoworkers. Volkswagen and Kia will soon.
"We refer to these companies as the new American manufacturers and the old ones as the traditional American manufacturers," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
The auto industry has taken a hit across all brands and segments in the economic downturn, and its not expected to improve much in 2009.
"What's weird is that usually luxury brands are impervious to downturns, but this is such a severe one that that segment – I think every segment – has lost sales," Custer said. "Even lower-cost, fuel efficient car sales are down. Everything seems to be down, it's just really discouraging."
The success of foreign auto companies with U.S. operations is tied to the success of the American brands, and they would be vulnerable should one or more of Detroit's Big Three fail, Cole said.
"Because the auto business has become so globally integrated, that's the way the industry functions," he said. "One of the common misperceptions is that if one of the Detroit automakers goes down, it won't have any impact on the other automakers here, and that's absolutely un-true."
In 2000, about 50 percent of Toyota and Honda components were made in America. Now some foreign automakers are trying to raise their percentage of American-made components.
Honda has raised its American-made content in some vehicles to as high as 70 percent, said John Heitmann, a history professor at the University of Dayton who teaches classes about car history and culture.
But the Japanese carmaker's vehicles still aren't as American as American companies' cars.
"In terms of the transplants, Honda in particular has been trying to raise American content, but typically when you're talking about an American producer like General Motors or Ford, about 90 percent of the material, the components that goes into a Detroit Three car is American," he said.
"And virtually all the profits that Ford and GM make, if they have profits anymore, go to U.S. stockholders, whereas less than 10 percent of Japanese carmakers have shareholders that are Americans."
For their part, foreign carmakers with American operations view their products as American-made, even when parts are sourced from overseas.
"People should not discriminate against a product simply because it bears the logo of an international company," Mitsubishi spokesman Dan Irvin said in an e-mail. "Besides, Mitsubishi Galants, Eclipses, Spyders, and Endeavors are built in the heartland of Illinois with a union workforce."
But Japanese or German branded cars – even if they are completely made in America – will never be as American as Chevys and Fords in the imaginations of their drivers, Heitmann said.
"Our passion is for American cars, and that's expressed in our car culture. Have you ever heard a song about a Japanese car in the United States?"