October 6, 2009

The Milwaukee Braves left for Atlanta. Milwaukee obtained the Brewers.
Hot dogs are made of animal parts—some of which you may not want to know.
Meatless dogs are becoming more popular. Apple pie hasn’t changed.
But La Crosse no longer has a Chevrolet dealer.

Times change, but personally, I think La Crosse should have a Chevy Dealer.
Now, calling Chevrolet an American car is no longer as clear as it was once upon a time.

When I was nine years old learning the car business by washing cars, Volkswagens were called “foreign” cars. As my car experience grew by dusting parts bins, turning wrenches, grinding fenders and selling tires, more foreign cars appeared such as Toyota and Datsun. Many Americans responded to these entries by suggesting that foreign car companies should manufacture the cars where they sell them. Well, the foreign car companies heard that message and responded.

Honda built a brand new facility in Marysville, Ohio to manufacture Accords in 1982. Soon others followed and foreign cars became known as “imports.” All domestic manufacturers adopted import models or brands to make them competitive in fuel efficiency, due to the demand created by the energy crunch that started in the 70’s and played out in the 80’s. The lines between imports and domestics had been permanently blurred.

Then NAFTA (North American Free Trade Agreement) created circumstances that encouraged domestic manufacturers with their aging US facilities to move production to Canada and Mexico. At the same time, import producers started a technology boom by introducing gas-electric hybrid vehicles. Domestic manufacturers hesitated—to put it mildly. The federal government prodded them by establishing tax deductions and further upped the ante by upgrading them to tax credits. By the time gas prices reached $4 a gallon, Honda and Toyota were out of tax credits but selling hybrids at a record pace. Most Americans had no idea that by this time, American Honda was producing nearly as many cars in the US as Ford and Chrysler combined! In 2008, Chrysler produced more cars in Canada than in the US; and Ford produced nearly as many in Mexico as they did in the US. Meanwhile, American Honda quietly opened yet another plant in Greensburg, Indiana.

Sadly, this year General Motors and Chrysler have declared bankruptcy. The federal government sent “bailout” money but the industry continued to suffer from their technology hesitation. As a result, for the first seven months of 2009 American Honda produces more cars in the US than any manufacturer! Please note this is production, not sales. Many consumers are aware that Toyota is selling more cars than the domestics but are unaware that Honda produces more cars in the US than Toyota and Chrysler combined, as outlined in the table below.

Honda -- 206,401
General Motors -- 182,616
Toyota -- 164,930
Nissan -- 129,348
Ford -- 104,478
Chrysler -- 32,527

Source: Automotive News August 8, 2009

I know that many of the politicians that are attempting to bail out the domestics are not aware of these facts. And I think it is important for everyone to consider who is a domestic manufacturer or what a domestic model is when you are investing in transportation that will support U.S. workers. The globalization of the auto industry makes it difficult to determine how “American” your purchase may be, and the distinction may be less relevant since everyone is looking for value and quality. So, calling Chevrolet an American car is no longer as clear as it was once upon a time. In the long run, the process that took foreign cars through imports and eventually to becoming the leading producers of U.S. cars is the same process that created cars with more safety and durability, and that are greener than ever.

-Chris Schneider, Hybrid Guru