Buying American Cars What Does It Mean?

kdhspyder

If the Big 2.5 automakers (still not sure who the "American" automakers are, by the way)

We should for accuracy sakes just say 'the Detroit-based' carmakers, they are hardly 'All-Americans' as that was perceived at one time. Right now they are just international companies based in Detroit - one with a parent overseas.

kdhspyder

This is why there is almost a 'standard' difference of $3000 between private-party resales and dealer retail prices.

The retail price is the determining issue. It's set by the market and someone will sell the vehicle at that price. The question is 'Who is going to do the work to make that sale'. If it's you the private party then you should make the profit. If you don't want the hassle and delegate it to the dealer then he should make that profit.

This is a most basic economic princinple. Whoever does the work should get paid for it.

ron_m

I would like to mention that my dad's olde 1975 Chevrolet Beauville van was made in Van Nuys, California. It was manufactered in the San Fernadino Valley and stills going strong after 850,000. If a part broke down, we just go the local junkyard and get a replacement part. But I seen so many early model Nissan Zs there. 1980-1990 Nissan Zs, stripped off it's airbags and cataylic converters.

Nissan Z cars didn't even have airbags in 1990--let alone 1980-1989.

Ron M.

khmerkenboy

Well the steering wheel is missing. The salvagers probably wanted the steering casing or something.

AG11

As my handle indicates, my car has 0% domestic content and I don't lose sleep over it.

You got that right. If it's SOP for GM/Ford to move their production overseas whenever they feel like it, why is it so wrong for us Americans to buy foreign cars? BTW, I love my A4 too!

ron_m

Anyone else find it to be somewhat humorous to see how many Ford, Chevy and Dodge pickup trucks you see hauling around Honda, Suzuki, Yamaha and Kawasaki dirt bikes, 4-wheelers and personal watercrafts? And lots of them have magnetic American flags on the tailgates. I'm surprised some people aren't busting on them for doing that!

Ron M.

dieselone

So what. I don't see what your point is.

Most manufactures don't pay $25/hr. Most people don't make $25/hr. Most averages I've seen is around 16$/hr. Toyota pays what they feel is a fair wage and it seems to me, most of their employees are willing to work for that.

I know lots of people that have the same class of job that work for different companies and their pay level is different, some by quite a bit.

kdhspyder

If it is true, and I dont know or care...

I found out something today that was interesting. Toyota pays their employees $16.36 an hour for production. This $25 an hour stuff I've been hearing is a total lie.

...who said that trucks and cars have to be made by people being paid $25-30/hr. Here is an interesting flip side to your statement assuming it's true.

These people making $16/hr are sure making some damn fine vehicles like the Sienna and the Odyssey as opposed to the GM abortion or the DOA Ford. And the first two are selling at higher prices ( by alot ) than the latter two.

So paying workers a higher wage, if that's the case, assures nothing for the success of the vehicle in the market.

imidazol97

>These people making $16/hr are sure making some damn fine vehicles like the Sienna and the Odyssey as opposed to the GM abortion or the DOA Ford.

Strong language isn't needed. If you have a point, you should be able to make it without ridiculing cars by calling them "abortions." Bad taste.

> Sienna and the Odyssey

Are those the same Odysseys having problems with noise and transmissions I read about in the other discussions. I lose track of Sienna and Odyssey and which has which problems.

No cars are perfect.

socala4

No cars are perfect.

But isn't it weird that it is the Big 2.5 nameplates that most often show up most on the "imperfect" list?

(Oh, I forgot -- it's a media conspiracy. No truth whatsoever about there being poor quality and design.)

rockylee

Not for the "New" employees that are hired at GM/Delphi !!!!! My father makes $26 an hour. Anyone hired in before 99 or 2000 forget exactly which year will make the good money that my dad makes (That is still subject to change on Febuary 14th) My aunt hired last week right now in the current contract is making $14 an hour. (Dad helped get her hired at Coopersville)Her top pay will be $18 an hour if things don't change on the 14th. Miller if he wins will drop her(aunt) wages down to $9 an hour and my dads down to $12. His contract calls for a ABC type raise based on Job classification over 5 years. Aunts top pay in 5 yrs. will be $16 an hour if Miller wins. My fathers top wage would be $18 an hour because he was hired before the 99' deadline date. However since he has a specialty job his pay could top out at $19 and change an hour. Skill Trades would top out in the low $20's for before 99' deadline and the after 1999 skill trades would be about $19-20 an hour. Complicated yes. I and my father spoke about Millers proposal for a while. We mainly concentrated on the "what if" this happens type of questions.

-So yes your family member does make $25 an hour for production. I bet he/she isn't laughing right now but is worried about the future. Is he/she at one of the plants on the closure list ?

Rocky

rockylee

I do know the answer.

$2 dollars and change an hour. What it was a few years ago.

rockylee

What kind of sick person are you ??? To wish another person to lose his/hers job is absolutley sick in the head. I have no problem with folks who disagree with my stance and yes to some I might be a moron. :surprise:

Rocky

fintail

I dunno, I think if you wish for a better future for so many domestic products, you need to hope that many a corporate coward/suit/exec loses his or her job

rockylee

Fintail if they lose their jobs they aren't going to starve or lose the home. We've had the "Golden Parachute" talk many times. The affect on a corporate executive will mean he/she will spend more time on the golf courses, drinking champagne, and smoking cigars.

Domestic manufactoring is dead until some type of revolt happens.

Rocky

socala4

I do know the answer. $2 dollars and change an hour.

That's about right. The amount is a lot less than what they'd pay someone in the US or another western country.

So, would you prefer that some automaker hire Americans at some lower wage rate ($15/hour, or whatever it happens to be), or that they hire no Americans because they hire Mexicans instead?

You may not like that choice, but that is the choice that you can expect to make in this day and age.

imidazol97

Amen to that bro'.

I read that GM may cut divident by 50% and lower executive compensation. I feel such pain for the executives... I wish there were something I could do to help them if that happens.

Maybe then some of the GM haters will feel a little better. I sometimes think we're still in the 70s with all the military industrial distrusters still hoping for major catastophy in GM and Ford.

Just today I was reading about poor running transmissions and poor knob design in interiors. It just never ends with the bias in the media.

http://www.usatoday.com/money/autos/reviews/healey/2006-02-03-passat_x.htm

Ooops. It's not a GM-it's a German vunderkar. Over-priced v6, poorly done turbo, trans shift problems, Rubbermaid controls, no auto on/off headlamps, no day/night mirror auto.

Gee now only if they'd check out some Japanese cars. Oooops, he already did review the Avalon. Link available if someone needs to read it too.

AG11

No cars are perfect.

True, but at least with minivans, it's the Sienna, Odyssey, and the ChryslerTC that are closer to perfection than Ford and GM. Just read all the mag reviews... Oh yeah, I forgot, the mags are biased

Anyway, here is one Odyssey owner without any problems. Only complaint is the arrogant and cheesy "what would it take for you to buy the car today" dealership.

fintail

Well, I am not looking at it from a revenge-hurt-the-exec standpoint, I am seeing it from a future viability standpoint. There sure is a lot of dead wood out there. New blood must be found. And there is really no excuse for golden parachutes. Those contracts should be able to be broken, and if the suit complains, perhaps an Enron-style "suicide" could be arranged...

"Domestic manufactoring is dead until some type of revolt happens"

I'd agree with that...maybe doomed rather than dead. It'll be the death blow to liberalism that some have dreamed about for decades. The only thing that won't be outsourced will be service jobs and corporate coward positions. Two tier society, here we come.

fintail

Imagine if all those GM dividends could be instead used to improve the product. You know, some other companies operate under that idea, companies that have more success. But no, the unions are to blame! Not the cruddy product and short term thinking at all. Unions, biased media, liberals...without those factors, GM would be thought of as the best quality out there.

imidazol97

Some companies whose stock I hold have no dividends. They are usually moving forward with their products.

GM does indeed need new top layers and new PR and new product, some of which is already here. Changing the image is hard when so many have worked for so long to make it fit that old beliefs.

>...unions are to blame?... Not really but they did their share to keep the status quo and greed never hurt. Trouble is if the union workers hadn't bled the money that could have gone for product development, the management would take the money.

marsha7

I am not speaking like a car dealer, just facing the facts as they are...cars are unique in that the one we want to get rid of may actually have some value and that someone may take it off our hands...try that with furniture next time you want a new couch, see if the dealer will take your old couch in trade...same with watches, clothes, ladders, drills and other tools, carpeting, flooring, your old roof, etc.

Only because a market exists for used cars can we trade in...I assure you, if there was no such thing as a used car market for the dealer, and if no dealer offered anything for your trade and you were forced to sell it yourself on the open market, then that is what you would do...I am only pointing out that we should be glad that a used market exists for our throw-aways, or we would be stuck with them...

Where is the trade-in department at your local ACE hardware store???...there isn't one...but there is one at your local car dealer...that is my point, that's all...

socala4

???

Let me know when you're ready to sell your house. Since you should feel lucky that anyone wants it at all, I hope you don't mind if I make an offer that is 10% of market value. (You see, I could have offered you 5% for your used house, but I'm feeling particularly compassionate today...)

I don't really care whether or not there is a market for used hammers. The fact is that there is a market for used cars (almost certainly because they are the first or second most expensive item that a person will ever buy), and it makes sense to consider resale value when buying a new car, particularly if you plan on selling it within a few years' time.

Cars don't depreciate by mistake -- the amount of depreciation reflects the market's judgment about the car. If a car has a bad reputation, chances are good that it will lose more value than a car with a good reputation.

Want a car with a good reputation? Then you're probably better off avoiding most of what the Big 2.5 have to offer.

marsha7

In my mind, I place real estate in a different category, as it is one of the few things we build/sell that are designed to last anywhere from 20-100 years or more...

As far as anything other then real property, almost everything we buy is worth less the minute we take it from wherever we bought it...hence, my discussion concerns everything else besides homes and land...

socala4

Well, Marsha, when you have a car to sell, let me know. I promise to pay you a fraction of its value, and you can feel as lucky as you'd like!

fintail

"They are usually moving forward with their products."

Exactly! I can just imagine what GM might have been able to do if instead of issuing generous dividends, it put the money back into the product. Camcords might be a domestic idea...

I'm upset by GM for many reasons, not just family who have been burned by its products. The company used to make so many cars that were both high in quality and durability. Now it seems you can get one or the other, usually the latter. I used to think that GM simply didn't have the intellectual capacity to get out of that rut. Now I believe that the potential is there, but people are holding it back for their own gain.

My union comment was sarcastic. I get a little jaded at those blaming the unions for company woes...when the cars are the real factor.

mpalczew

>> A family member works for GM and would laugh at $16.
That's rather elitist, I'm sure plenty of people would be happy to get that much.

himagain

Just out of curiousity, is that $25/hr before or after union dues? The "foreign" car plants are very much non-union, so that $16/hr goes to the worker, without a third party taking a cut. Also, don't forget that unlike union shops, anyone can get available overtime hours since it's not based on seniority.

dglozman

This is not correct. Resale does matter, since residual value of the car after your lease is up is part of the lease formula. Honda Accord would have higher residual value after 3 years of lease, and your payment will be lower then majority of the mid size sedans with the same lease terms.

travler

I'm not sure about the union dues, but it sure wouldn't make a $10 difference. I'm pretty sure she's at about $25 an hour or more. She's pretty quiet about it.

It's not that she's elitist. That's just what she's use to making. No one wants to work for less. Would you?

Also, I'd take a non-union shop any day. Unions are necessary, but in the auto industry they have caused much of their current problems. Way to powerful, demanding, expensive.

travler

I don't get your point. If your goal is a lower payment, and a new vehicle every 3 years why does residual matter? :confuse:

socala4

I don't get your point. If your goal is a lower payment, and a new vehicle every 3 years why does residual matter?

Despite the efforts of the auto industry to make leasing as confusing as possible, the concept of how the payment is derived is simple: It's based upon an interest rate, assuming a specific amount of depreciation over the life of the lease.

In effect, you are borrowing money based upon how much value the car will lose during the lease period, imputed at a certain interest rate. Therefore, all other things held constant, less depreciation results in a lower payment.

Accordingly, low anticipated residuals will harm the lessee, unless the seller (dealer or manufacturer) offers a program that effectively offsets or subsidizes the amount of deprecation loss. As with a purchase, it is smart for a lessee to negotiate so that the interest rate is as low as possible (the "money factor"), the purchase price is as low as possible, and the residual value is as high as possible.

travler

Thanks for the info. Her plant isn't on the closure list, and she's been there for almost 20 yearsl She is worried, and angry, and blames it all on the current administration.. :mad:

My opinion? It's been heading that way for at least 20 years.

travler

I get all of that. I though you said that Honda lease payments are lower because of higher residual values.

socala4

I though you said that Honda lease payments are lower because of higher residual values.

Until now, I've not discussed leasing on this thread -- that may have been another poster. But all other things being equal, a car that depreciates less should end up with a lower payment. However, a higher sales price, higher interest rate (worse money factor), change in time period, and other factors can effectively negate this benefit. Leasing is a minefield for most consumers, with many of them getting robbed without them even realizing it.

rorr

"I though you said that Honda lease payments are lower because of higher residual values."

This is the way I understand leasing:

Your lease payments are based on the interest rate and the expected depreciation on the car. A car which is expected to depreciate by $7.5k over the term of the lease would have lower lease payments (all else being equal) than a car expected to depreciate by $10k over the term of the lease.

In other words, the lease payments on an Accord which depreciates by 'only' $7.5k over the life of the lease SHOULD be lower than those on a Malibu which may depreciate by $10k. However, the supply/demand for Malibu's may mean a potential leasee could get a REALLY favorable interest rate or money factor lowering the lease payments while the supply/demand for Accords may mean the opposite.

kdhspyder

to go further with your point, use Excel or any payment calculator and plug in the following variables:

Veh X
trans pr: 20000
resid 36 mos 55%: 11000
term:... 36 mos
Int rate: 7%
If you 'bought' this depreciation $9000 you'd pay just under $280 / mo.

Veh Y
trans pr: 18000
resid 36 mos 45%: 8100
term:... 36 mos
Int rate: 7%
If you 'bought' this depreciation, $9900, you'd pay just over $305 / mo.

But if you could get a subvented rate/money factor, say..
Int rate: 2.9% ( subvented )
with the same depreciation, $9900, you'd pay just under $290 / mo.

This assumes no fees or taxes just the depreciation factor and interest.

rockylee

I guess right now people like my "overpaid" father are getting the blame for GM not dumping money into R&D and real quality over the years.

Now they are making a last minute effort to turn things around. GM says union labor is the one to blame. GM had $20 something billion in cash on hand for years.

GM built inferior junk in the 80's except for a couple of models and didn't do much better in the early part of the 90's. The mid 90's to about 2003 it got gradually better as time went on.

The first huge turn around car for GM was a Aussie Holden Monaro product called AKA (american)GTO. 2004 was a sign of perhaps better product. Wasn't that the year the SRX also came out :confuse: Anyways I remember looking at my car magazines and saying perhaps GM finally "gets it" for once. Of course it was followed by the STS and now the "fit and finish" and "Quality" has taken leaps and bounds on many of GM's new products. GM just needs to improve driving passion. This is where I'd take a page from BMW. BMW has cars that are fun to drive. If GM would couple that BMW passion with American muscle and American styling we might gradually find a solution to the stale cars coming out today by some of the Big 3. Ford however has a much bigger problem. The Mustang as it looks is the only performance passion car that Ford is going to make since Edmunds has reported the Adrenaline is Dead.

Chrysler has proven this method to work with it's (SRT)team. Yes GM has the GMPD which is reasponsible for the "V" on Cadillac, "SS" on Cheverolet, "GXP" on Pontiac, "Redline" on Saturn but where's the performance division for Buick, Saab, GMC. The GMPD has to make cars with (real performance upgrades) like the (SRT) division on Chrysler Corp. Chrysler, yes has room to improve. Simpily adding a 6.1 Hemi that gets poor fuel economy isn't the ultimate "fix it all" solution. However it's better than adding a supercharger that gets only 40 extra hp and say that's our performance answer.

Rocky

lemko

U.S. Trade Deficit at an All-Time High:

http://www.philly.com/mld/philly/business/13835096.htm

rockylee

Lou Dobbs has been keeping track and shakes his head. He said our currency's value is rapidly declining and it's taking more dollars to buy the same product.

Rocky

lemko

...I was looking at some ceramic basement light sockets. They used to be made in the U.S. by once-respectable Leviton. More recently, these sockets were made in Mexico. Now they're made in China. I guess those Mexican laborers were too demanding. Disgusting!

rockylee

No they wanted a dollar and change an hour for wages. The Chinese only ask for "change" per hour and yes it's disgusting.

Rocky

P.S. Just wait until they bring over their lovely cars.. :sick:

Rocky

lemko

...are anything like those pocket bikes, fuhgeddaboutit! These guys can't even properly forge a wrench! I read something where the Chinese tried to copy a Kawasaki "ninja bike" and the result was a disaster - bad welds, misaligned bolt holes, inferior metallurgy, etc.

rockylee

Well the sad thing is they will have people like the camcord crowd telling us how "inferior" that Ninja bike is. :sick:

Rocky

carlisimo

"...bad welds, misaligned bolt holes, inferior metallurgy, etc."

Curiously, that's the state that Japanese manufacturing was in, during WWII. Their planes had excellent design, but they weren't put together well at all. Their mechanics were astonished when some German examples were brought over, and everything fit so well! I'm pretty amazed they went to war with the US at all... we made island airfields with bulldozers, while they used men and buckets. We used Detroit factories and trains, they ox-carted Zero wings to the place where they attached them to the fuselage. 110 octane gas vs 87, etc.

China's 50 years behind in some ways, but years go by quickly.

dieselone

No kidding, My uncle damn near got killed from a Joe Weider bench press that was made in China. A weld broke when he was working out with 200lbs. Fortunately for him (and the company that markets Joe Weider products) the weld broke before he cleared the barbell support and didn't come crashing down on him when the bench itself fell apart.

imidazol97

We had a problem with a small piece of furniture. The store didn't want to get a replacement because the quality of small pieces made in China or wherever are so consistently bad. They did get a replacement and it was worse than the original. They are getting replacement parts made in US by the parent company for repairs and will repair the new piece to get what we want.

The furniture is junk. Just look at the stuff at KMart and Walmart sometimes.

PF_Flyer

Let's stick to the automotive here and not get off into other products

bmk32

I guess buying American can really mean something different to each and every one of us, a lot of factors can influence what is really American made ? For instance, is a Camry really American just because it's manufactured here ? Is a Fusion not American because it's made in Mexico ? For me, buying American means buying from one of the traditional domestics, and I always try to pick a product that is actually assembled on U.S. soil. My last three purchased vehicles have been manufactured in Lansing, MI, Doraville, GA and Oaklahoma City, OK. All three vehicles have been very good to me, with no major problems for me to report. Every manufacturer has to post on the window sticker where the car is made, so that part is easy. I know parts content comes in to play too, but my next thought is where will the profit from my sale go ? I prefer to keep my money in the U.S. and try not to directly contribute to the deficit by buying cars from companies in Japan, Korea or China !! It's tough to do, globalization has really hit the U.S. auto industry hard. Call me old fashioned, but I'd like to see all of us prosper and succeed, so I buy traditional domestic brand, and U.S. made cars. That's important to me, and I feel sad that it's not more important to most other consumers too. We're giving the store away for free in my opinion.

socala4

I prefer to keep my money in the U.S. and try not to directly contribute to the deficit by buying cars from companies in Japan, Korea or China

I'm sorry, but you don't seem to understand what comprises the trade deficit, and what doesn't.

A trade deficit occurs when the value of imports exceeds the value of imports.

An import is defined as a good purchased that is manufactured abroad.

An export is defined as a good manufactured domestically that is sold abroad.

Accordingly:

-If you buy a Ford Fusion made in Mexico, you are contributing to an increase in the trade deficit.

-If Honda exports Accords made in Ohio, Honda is helping to reduce the trade deficit.

If your priority is to influence the trade deficit, you should be (a) refraining from buying goods made outside the US and (b) encouraging companies to build products in the US for export.

Vis-a-vis the trade deficit, it makes no difference matter which company does this. The fact that the company is "American" or not makes absolutely no difference.