Richard Florida
by Richard Florida
Fri Jan 30th 2009 at 8:53am UTC

Who Is Us?

Which car company is more “American”? A Big Three car maker which off-shores jobs and lays off American workers, or a foreign transplant that is ramping up production and creating jobs in the U.S.? That’s the famous question Robert Reich asked back in 1990 in a classic Harvard Business Review article.

The Wall Street Journal’s Joseph White updates Reich and asks “What Really Makes an American Car”?

Could there be a more American vehicle than a “Jeep Patriot?” Nothing on four wheels says American more proudly than Jeep, the rugged brand that helped America win World War II, and has ferried millions into our wild, Western spaces since.

Yes, in fact, there could be a more American SUV than a Jeep Patriot. A Toyota Sequoia would be one of them. The Sequoia is 80% “domestic” according to the National Highway Traffic Safety Administration, while the Jeep Patriot is only 66%.

The Treasury has pumped billions into two of the three American car makers with head offices in and around Detroit, hoping to avoid a collapse of what industry and political leaders call the U.S. auto industry. There’s lots of talk about the government supporting American efforts to develop electric cars and batteries, and some federal programs already established to do this …

Once you put down the flags and shut off all the television ads with their Heartland, apple-pie America imagery, the truth of the car business is that it transcends national boundaries. A car or truck sold by a “Detroit” auto maker such as GM, Ford or Chrysler could be less American — as defined by the government’s standards for “domestic content” — than a car sold by Toyota, Honda or Nissan — all of which have substantial assembly and components operations in the U.S.

So what should you buy if you want to buy a truly American-made car? For the 2008 model year, the government says the Ford Crown Victoria has the highest percentage of U.S./Canada content at 90%. The only hitch: It’s assembled in Canada.

2 Responses to “Who Is Us?”

  1. Nashvilian Says:

    I think it’s more how we deal with the auto industry than who we chose to save, because clearly there is no real domestic auto manufacturer unless you are counting where the company is headquartered.

    We’re never going to return to the rate of car purchases that we had during the serial refinancing days of the Great Housing Bubble. Capacity has to decline, and that should be by the failure of whole companies, not by evening out the pain and certainly not by evening the pain using tax dollars.

    Pumping capital into zombie manufacturers so they can stay in the fight will only serve to batter and bruise the participants destined to win anyway. That’s not very efficient, and not very American.

  2. Areeb Masood Says:

    This is an interesting observation. However, I think we need to first define what “American” is. America represents capitalism – the pursuit of individual good at all costs. A corporation is modeled around the same concept – almost has similar rights as a person does and in many ways, behaves as one. If by outsourcing manufacturing, these “American” auto companies can save money and make more profit for themselves, they are behaving in the most basic of American ways.

    As far as the question of which auto company to buy from, I think we need to analyze the capitalist buyer side argument for this: buy what is best for you.

    At a macro level, America has always been about innovation: about inventing something fancy and high tech and then exporting it to low cost countries. The fact that cars are so big and bulky and hard to ship from those low cost countries, the invention which is the automobile continues to stick around here. The American workers have been slow to adapt and build the next generation of car factories: green and efficient and hence there is a friction between the old way and the new.

    On the other hand, another very interesting thing that some people point to is that during World War II, the American industrial capacity was what helped the allies win the war. Industries could be turned over to make weapons and military equipment at a moment’s notice. However, if all car manufacturing companies move offshore, strategically speaking, America could be at a great loss in the event of, God forbid, another world wide conflict. The lead time and the dependencies that this will create is unimaginable and this is an argument many use in favour of pumping more money into this industry – to Nashvilian’s comment above.