Delphi, GM, and the UAW announced yesterday afternoon that they have reached a tentative agreement concerning wages & benefits for Delphi workers. I’ve only heard bits & pieces of the agreement, and have yet to look it over, but make no mistake – the troubles for GM, Delphi, and the UAW are far from being over. Considering that Dana Corporation, another automotive parts supplier, recently filed Chapter 11 demonstrates that domestic car parts suppliers are in as much trouble as the automakers. What is also apparent is that Dana did not have the same UAW pension/benefits burden as Delphi, and that is cause for concern.
Coincidentally, the following article was sent to me this morning, and I felt that it had to be passed on to the readers of this blog.
Is It Unpatriotic To Not Buy American Cars?
By Roger Simmermaker, Special to FCN OnlineAs I sat in an Orlando studio on Jan. 24 waiting to be interviewed on Fox News’ “Hannity and Colmes” for the first time, that seemed to be the question I was going to be asked to answer if the introductory comments were any indication. In the studio in New York was Malcolm Bricklin, founder and CEO of Visionary Vehicles, who plans on importing cars from China by 2007. Ford had just announced plans to lay off 30,000 workers, and since even Mr. Bricklin (to his credit) says he doesn’t want to see so many Americans join the ranks of the unemployed, it was a good question to ask. But the show started with asking Mr. Bricklin a different question and by the time the cameras pointed to me, I was given a different question as well, so I never really got to answer it.
But as I continue to think about it since that interview, the answer I would have given to Sean Hannity is the same as my answer today: If it’s unpatriotic to destroy the American middle class, then it’s unpatriotic to not buy American cars. As a country, we’re drowning in a sea of red ink, and as consumers (those who really should know better, anyway) we’re drowning is a sea of “what’s in it for me.”
Since President Bush has all but ruled out any government help for either Ford or GM saying they have to make a product that is “relevant” (did you know Mr. Bush himself owns a Ford pickup truck?) it’s up to the American consumer to realize that a bankruptcy for Ford or GM or both is definitely not in the national interest. Not only would hundreds of thousands of workers lose their jobs, but about 450,000 retirees would be de-funded. These retirees on fixed incomes would see smaller pensions and reduced medical benefits. The workers that remained would see massive cuts in benefits as well.
Big deal, you say? At least American companies still offer their workers pensions. According to a recent article in The Tennessean, Nissan North America new hires won’t be able to count on a company pension when they retire. And if you work for Nissan and didn’t happen to reach the age of 65 by the end of last year, you won’t be participating in the company-sponsored medical plan either.
If American companies can’t remain successful and shoulder the burden of health care for their workers, the rest of us will likely pick up the tab in the form of higher taxes through expanded entitlement programs, which are already growing at a rate of 8 percent a year.
84% of all federal spending of our tax dollars already goes towards the “big three” untouchables: interest on the national debt, national defense (including homeland security) and entitlements such as Medicare, Medicaid and Social Security. So much for conservatives who wish for smaller government. Generally speaking, few of us want to invite more government intrusion into our lives. But a significantly smaller government these days would result in benefit cuts that would ultimately affect all of us. The days of those who want tax cuts because it means more money in their pockets and means benefit cuts only for someone else are over.
So what’s your reason for not buying American cars and trucks? I’ve heard (and disproved) them all but I’ll list a few of the more popular ones here:
1. Quality. According to the latest J.D. Power & Associates Long-term Dependability Survey, Lincoln, Buick and Cadillac all made the top five for 2005. Lexus was number one and number two was mysteriously not reported by the CNN story highlighting the survey. What’s even better (if you are a fan of American automakers) is that the average dependability of all GM and Ford models combined was greater than the average dependability for all the Japanese models combined.
2. Too much emphasis on “gas guzzlers.” The hypocrisy in this statement is rampant since most people who make it are ardent supporters of the “free market.” The trouble for these hypocrites is that a major free market principle is the law of supply and demand. According to Seattle Times columnist Shaunti Feldhahn, consumer demand for big, bad SUVs has doubled in the last 15 years. So much for the argument that American car companies aren’t building what consumers want to buy. Just like American companies have been scrambling to satisfy the one percent of car buyers who want hybrids, Japanese car makers have been scrambling to catch up to Ford and GM by offering bigger and badder behemoths (at even worse gas mileage ratings than American SUVs). GM has more models with over 30 mpg. highway (2006 EPA estimates) than any other auto maker. Last month I revealed that my 1996 Lincoln Town Car now has over 160,000 miles with no signs of letting up. What I didn’t mention is that my car has averaged 24 mpg since September 2001, which is a result of combined mostly highway driving during the week and mostly city driving on weekends. Not bad for a big luxury car.
3. Foreign car companies will pick up the slack. This argument implies that the hiring of American workers by foreign companies would never take place if there weren’t layoffs by American companies first. Even if you view foreign investment as a good thing — which it isn’t — foreign companies will still invest in America even if we support American companies so they can actually retain our own workers. This argument is almost as bad as the one that implies we need to destroy American manufacturing jobs in general so we can move American workers into high-tech jobs. Why not let the college graduates strapped with tens of thousands of dollars in student loans and other debts take these jobs, and protect American workers in the jobs they choose to have now?
4. American companies can do better. Better at what? What will it take for more American people to root for the home team again? Do you only root for your hometown sports team when they are winning, or do you root for them even when they are down — no matter what? Let’s see. American companies GM and Ford have won numerous quality awards, they have more domestic plants, employ more American workers, support more retirees along with their dependants and families, pay better wages than the non-union foreign-owned plants, have a higher percentage of domestic parts in their automobiles, pay more taxes to the U.S. Treasury, give more to charities for the benefit of this country, and donate more in the wake of disasters like 9-11. Need I go on?
5. GM and Ford need to make cars Americans want to buy. I saved this one for last since it the most ridiculous statement of all. General Motors has the highest market share of any automobile company. To say the company that currently sells more cars and trucks to more people than any other company in the industry — even if that market share is falling — is truly ridiculous. Yes, I know Toyota is gaining on GM and may overtake them this year (in worldwide market share — not U.S. market share — where GM has roughly twice the market share of Toyota) and GM used to command around 50 percent of the domestic market. But let’s be reasonable, shall we? What company in any industry in today’s super-competitive economy can command 50 percent of their market? Not even Coke or Pepsi can do that. Which reminds me — Pepsi recently passed Coke to take the top spot in the beverage wars. Is Coke number two now because they aren’t making beverages Americans want to drink? I haven’t heard that one yet. Only in America and only in the automobile industry could number two be declared a loser brand. And only if it’s GM, not Toyota.
The struggle for GM and Ford to regain much needed and much deserved traction has increasingly become a media war. And it’s not just a media war as I reported in my September 2005 article titled Media Bias Against American Automakers. The bias towards foreign automakers has extended from journalists and other newsmakers to everyday Americans with vendettas against their home-team companies in the form of letters to the editor and blogs on the Internet. The Wall Street Journal recently ran a story titled “Are Rumours Hurting Sales” reporting on a Los Angeles resident who started a Web log called “GM Can Do Better.” It’s not that this individual has not heard the reports of numerous quality awards bestowed upon American automakers. It’s that he’s skeptical the reports are true.
So there you have it. Foreign car lovers will believe it if Toyota wins an award. But if General Motors’ Chevy Impala is documented to have fewer customer complaints than the Toyota Camry, foreign car lovers will grasp at different false reasons to justify their foreign purchases. But the facts are in and their arguments no longer hold water. I’d almost be willing to bet these American car bashers haven’t test-driven an American car in years. Right now it doesn’t matter that GM has 82 major plants in America and Ford has 35. What matters is that Toyota, Honda and Nissan have eight plants each. It doesn’t matter that Toyota and Honda average 65 to 75 percent domestic parts in their U.S. built cars while GM and Ford average 80% to 85%. If these percentages ever reverse, then it will matter to foreign car lovers. Facts simply don’t matter to them when they don’t happen to be in their favor. To them, as Business Week reported Dec. 12, 2005, “the economy is unstoppable as the Indianapolis Colts” and foreign purchases have no national negative effect. If you watched the Super Bowl last Sunday you probably noticed that the Indianapolis Colts weren’t playing.
I’m sure that this article will not sit well with those who automatically receive it as part of their free “Buy American Mention of the Week” subscription and advocate the demise of GM and Ford. And I’m also sure I’ll receive many “unsubscribe” requests as a result. But I don’t really care. I don’t like writing for people I don’t like any more than I like giving speeches to groups I don’t like. These articles are not designed to make anyone feel less of an American for their past foreign purchases, but rather they aim to persuade American consumers to make the right purchases in the future.
Those who do agree with the facts and the opinions I have presented, I urge you to forward or distribute my auto industry articles to fellow Americans that need to see them. Simply visit http://www.overthehillcarpeople.com < http://www.overthehillcarpeople.com/> to see the auto industry articles I’ve written since May 2005. I’m not sure how much time GM and Ford have left to turn things around given the obstacles they must overcome that have been put there for bogus and unpatriotic reasons. And remember, the next time someone accuses you of questioning their patriotism because of their foreign car, tell them that if it’s not unpatriotic to destroy the American middle class, then it’s not unpatriotic to buy foreign cars!
Roger Simmermaker, author of How Americans Can Buy American: The Power of Consumer Patriotism, published this article on his Web site, http://www.howtobuyamerican.com <http://www.howtobuyamerican.com/>.
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January 20, 2008 at 4:30 pm
Tom
From Haloscan:
If I EVER came home with a foreign car, my dad would disown me. And, in my conscience I can’t buy one. I am so glad that the Mustang is domestic–it is my favorite car ever and one I am going to own somday.
Teresa | Homepage | 03.23.06 – 9:50 am | #
I drive a lot of cars when out of town on business. I love driving the Mustang. I don’t think that the imports have anything on domestic. I will say that the Subaru Forrester is a superior vehicle. I agree, Tom. American cars are totally competitive.
My only problem with this post is that we have already let the horse out of the barn. We already have allowed complete de-industrialization of the textile, furniture, home appliance, steel, and many other industries. Those jobs are gone and they ain’t comin’ back to paraphrase the Boss. Why is it that now that the auto industry is next in line, that “Conservative UAW guys” like you and JimmyB are finally paying attention? This whole thing has been coming for a long, long, time. I am sorry that you will be next, sorry that our great state will no longer have quality jobs for people without college degrees. You two will be okay. You have an education.
I think the fact that autos are last to go may be because of (dare I say it here)”liberal” policies like fair pay with benefits, unions, and (unholiest of all) government assistance.
God help us if we get in a really big war, the Chinese won’t sell us the parts we need to build the planes and tanks. We also owe them so much money that they will start demanding assets when we can’t pay up.
Tim | Homepage | 03.23.06 – 4:36 pm | #
Right on the mark. I worked at GM of Canada before I retired. I drive a 2006 Chev Impala, and it is without doubt the best Chev ever produced. As an employee of Gm I drove a new car all the time, and this is the best yet.
I will be forwarding your comments to all my old buddies in the business, and to some of our more loyal Canadians who drive the “rice burneers”
Ross Perigoe | 03.23.06 – 10:47 pm | #
I will confess – I did drive a foreign car at one time – a Nissan Sentra that was built in Smyrna, TN, but that has been several years ago and long before I was hired by an automobile company, and it was the only car I could afford at the time.
But Tim, I will say that this issue has been raised long before now, as far back (as I can remember) as the early 1980’s. The domestic car companies lacked quality & affordibility at that time, and that’s where the foreign car companies got a foothold.
It also does not help that the car magazines seem to laud the foreign car companies like Toyota, and report every possible fault of the domestics. In many ways, the domestics have a lot against them.
Tom | Homepage | 03.24.06 – 3:29 pm | #
Also Tim, as I recall, World Trade status for China and NAFTA were signed by the “fair” liberal Bill Clinton, after much arm-twisting.
Plus, I’ve only had my site up for a year; how do you know when I started to realize this stuff?
jimmyb | Homepage | 03.25.06 – 9:37 am | #
BTW – Most of the libs I know drive foreign nameplate cars, whearas the majority (but not all) of my conservative friends drive American brands.
Admittedly anecdotal, but true in my, and others, observations nonetheless.
jimmyb | Homepage | 03.25.06 – 9:39 am | #
Tom- My larger point is that American manufacturing as a whole has been slowly eroding under free (but not fair) trade agreements that go back to Reagan and Bush 1. Clinton did sign NAFTA (to cooperate with the Republican House). W. left no doubt that the domestic car companies are not going to get one iota of help from him.
And Jimmyb, I drive American. Unless you consider them German, because I’ve got a Jeep and 2 Chryslers.
Tim | Homepage | 03.25.06 – 6:46 pm | #
Tim – I’ve known for some time that the heavy industries of this country have been literally gutted. One of the most visible of these is steel production. Another is machine tools. Both of these industries for the most part are now foreign sourced.
And don’t worry about Jeep, Dodge, & Chrysler – they are still considered to be American. DCx has taken great pains to keep the German and American divisions separate, although they are sharing technology.
Tom | Homepage | 03.26.06 – 10:24 am | #
Is it going to just kill conservatives to give some help to the auto industry? Come on, our state is taking a beating, and when these good jobs go, they will not return.
Tim | Homepage | 03.26.06 – 4:47 pm | #
It all depends on whether the politicians on both sides thinks that taking steps to help the auto industry is important or not. There doesn’t seem to be an Iacocca in sight to plead the case, and the politicians are more interested in staying or getting back in power. Thus far, it doesn’t seem to phase the Washington crowd.
Tom | Homepage | 03.27.06 – 2:58 pm | #
Well, Maybe if Knollenberg, McCotter, Rogers, Miller, and so other Republicans fall in November We’ll get W.’s attention. Grandholm and Bill Ford Jr. have both tried to get the man to listen, and he says “I can’t make your companies profitable” and that they need “to make a product that is relevent”
I think we need a president who is relevnet. One who doesn’t “stay the course” as the ship of state is about to founder on the rocks…
Tim | Homepage | 03.27.06 – 3:09 pm | #
I don’t think it’s “unpatriotic” in a patriotic sense. HA! Serioulsy though … if you drive a foreign Truck … that’s when you got problems. LOL! Just so you know, I only drive American made vehicles!
-APV
APV | Homepage | 03.28.06 – 1:32 am | #
Although I only own Detroit Steel, I took deep offense when the president of the UAW Ron Gettelfinger, kicked the Marine Reservists out of the UAW parking lot they had been allowed to park in for weekend drills, because some were foreign cars. Some had Bush bumper stickers on them.
He immediately relented due to public outrage. However, he is a hater.
That was btw the 25th Marine Regiment, and they took hard loses in Iraq, including that Amtrac blown up with all aboard killed. I hope Ronnie has a pleasant lunch while he oggles his heel clicking secretary in the red dress.
Next stop, Honda for me.
jim b | 04.06.06 – 12:41 pm | #
I got my driver’s license in 1966 (yes, count the years), when American cars ruled. In the early 70’s, to my dismay, the Big Three were suddenly caught off guard by the first gas crunch, which allowed the foreign (mostly Japanese) car makers to get a toe hold. Rather than give in to the kind of reasoning that drove the masses to the foreign car dealerships, I sat out the rest of the 70’s, nursing my ’69 Skylark (350) to well past 200 thousand miles. Then, despite what Consumer Reports magazine ragged about, I bought the “First Chevy of The Eighties”…a Citation in 1981. I liked it so well I bought another in 1985, followed by a Cavalier Z-24 in 1988. That Cavalier became the love of my life (car wize) and I kept it going well past 250 thou.
Until recently, I hadn’t really found anything else that could catch my attention….until along came the ’06 Impala! But no one else I know seems to want to give it a chance! I’ve become a one-woman rolling bill board for Chevrolet.
They don’t seem to realize that just because their Honda, Toyota or Nissan is assembled here, they are still contributing to what may be the biggest catastrophe for the American economy since the Great Depression. The folks who own the biggest share of the Japanese big three live in JAPAN…That’s where their ultimate profit is going as well. The car buying public of America has become like Lemmings…hurtling themselves to death in a blind rush, taking everybody else with them.
Helen F | 04.09.06 – 1:32 pm | #