Buying American Cars What Does It Mean?

berri · February 2017

Very valid point. Also it will be an excuse for small cars like Focus and Corolla to be dropped from the US marketplace. Their demand, particularly for small Detroit vehicles, is probably not sufficient for US investment. Mexico will join much of Latin America in tightening their ties to China and Europe. I believe Trump is right that some aspects of NAFTA need to be relooked and renegotiated, but an all out war with Mexico just seems stupid to me.

Mr_Shiftright · February 2017

The strength or weakness of the U.S. dollar has both advantages and disadvantages, so if you don't know what you're doing, it's best not to mess with it for short term political gain. There's really no right answer here except "tread lightly whatever you do". In today's global economy, many industries, including the automobile biz, is very sensitive to what happens in OTHER countries as well.

berri · February 2017

The word is called "moderation" and no one in Washington seems to understand that meaning anymore.

Mr_Shiftright · February 2017

As with cheeseburgers and alcohol, if you don't heed moderation, you'll be reminded.

So, mess around too much with medical insurance and interest rates, and you've rattled the two largest industries in America in terms of % of GDP----healthcare and real estate. (about 7% and 9% respectively).

The auto industry is no slouch either in terms of GDP percentage--- about 2.5%.

To give perspective, the shocking recession of 2008 dropped the GDP by about 5%

uplanderguy · February 2017

We've discussed this, but content percentages don't take into account location of final assembly, location of engine assembly, or location of transmission assembly. At least that's what a GM window sticker says. Those locations are on a GM window sticker and I have to believe they're on all makes' stickers.

Spare the harping on me, 'cause I've heard it before, but I'll always remember the N.A.-head of Toyota looking like a deer in the headlights when asked about recalls in D.C. He deferred most everything to Mr. Toyoda.

And to be fair, I know you've heard me say that here before, too.

andres3 · February 2017

uplanderguy said:
We've discussed this, but content percentages don't take into account location of final assembly, location of engine assembly, or location of transmission assembly. At least that's what a GM window sticker says. Those locations are on a GM window sticker and I have to believe they're on all makes' stickers.

Spare the harping on me, 'cause I've heard it before, but I'll always remember the N.A.-head of Toyota looking like a deer in the headlights when asked about recalls in D.C. He deferred most everything to Mr. Toyoda.

And to be fair, I know you've heard me say that here before, too.

My question would be do the listed places of assembly for the engine and transmission count for a specified percentage of the total percentage? Is it by part numbers or by part weight as a % of the total vehicle? I would think an engine and transmission would count for a high percentage.

uplanderguy · February 2017

I should walk out to my Cruze and look at the sticker, but I remember them saying something to the effect of "Parts content percentages do not take into account location of final assembly, engine assembly, or transmission assembly".

I guess that really didn't add anything to our conversation, did it?

andres3 · February 2017

uplanderguy said:
I should walk out to my Cruze and look at the sticker, but I remember them saying something to the effect of "Parts content percentages do not take into account location of final assembly, engine assembly, or transmission assembly".

I guess that really didn't add anything to our conversation, did it?

Well, in a way it did, now I'm better understanding the point, but if a car has final assembly outside the US, but still has or maintains high US parts content, that's a good thing for US manufacturing I would think.

And Vice Versa, would be good for assembly workers in the US, but not the people making parts.

roadburner · February 2017

I'm proud to say that I work for a company that offers four SUVs that are made in America; even better It can build one to order and have it at your local dealer in 3-4 weeks.

berri · February 2017

I'm not sure that assembly location is as relevant as it sounds because most of that assembly is in Indiana and Kentucky for Toyota and Ohio and Alabama for Honda. I believe GM is one of the biggest users of Mexican and Canadian vehicle and drive train assembly. Basically though, the auto industry is global and therefore can probably vary from time to time. Personally, I think a more relevant statistic might be where the vendors are located.

tlong · February 2017

Yes, because the stats on auto assembly and parts also don't take into account the dealerships, the services they buy, the people they employ, and the taxes they pay all here in the USA.

Sandman6472 · February 2017

Both our vehicles are made in Mexico now, an Audi and a VW. Would be interesting to sit/drive a similar unit built in Germany and then compare it to the Mexican built unit. Betting they would be almost identical in every way. But could be wrong here.
I have been lucky enough to be able to play the stock market a bit in the last twelve years and it's been quite the learning experience. Am not one who likes risk but have been enjoying the buying/selling part of it all. I started out watching Cramer on CNBC nightly as much for the entertainment as for the knowledge. He's definitely a showman but he made investing fun for me when I knew nothing. Now, I read a lot and am a bit more conservative as I approach my mid sixties knowing that I definitely want to retire again by the end of 2018 or sometime in 2019, G-d willing. So now, play the market as much as I can and save more than I spend so when the time comes and the paycheck does stop, I can live the same, or similar lifestyle as now.
Luckily, especially now, if one wants to work, one can find a job in most parts of America. I was lucky as I found a job within hours of my starting to look a few years back. And luckily, that one gig lead to another which lead to my current one which I like and will keep till I retire. So yes, anything is possible in America and luckily, in my working career, I've been blessed with good jobs that have let me earn a living and raise a nice family. All our needs have been met, and some of our wants, and feel great knowing that our three kids are now all out in the work force working good jobs and not just expecting the government to pay their way. And hopefully when, and if they have kids, they will do the same for them...as it should be!

The Sandman

uplanderguy · February 2017

I know that in my new Cruze, engine and trans assembly, and of course, final assembly, are U.S.

uplanderguy · February 2017

Regarding Ford's move of production of all small cars to Mexico---Ford has announced that no jobs will be lost. All employees formerly building those cars will be moved to other production lines.

That's good news and IMO was also damage-control by Ford, but if production of a line is moved to Mexico, and other U.S. assembly is ramping up enough to employ those workers who built the car line that is moving to Mexico, still, couldn't Ford produce those (soon-to-be-Mexican) cars in the U.S. too, adding more U.S. workers? I guess the official line would be "no production space".

andres3 · February 2017

roadburner said:
I'm proud to say that I work for a company that offers four SUVs that are made in America; even better It can build one to order and have it at your local dealer in 3-4 weeks.

Is one of those 4 SUV's made to order in under a month the X1?

Mr_Shiftright · February 2017

uplanderguy said:
Regarding Ford's move of production of all small cars to Mexico---Ford has announced that no jobs will be lost. All employees formerly building those cars will be moved to other production lines.

That's good news and IMO was also damage-control by Ford, but if production of a line is moved to Mexico, and other U.S. assembly is ramping up enough to employ those workers who built the car line that is moving to Mexico, still, couldn't Ford produce those (soon-to-be-Mexican) cars in the U.S. too, adding more U.S. workers? I guess the official line would be "no production space".

They've already got a huge infrastructure in Mexico---why would they build a new plant? They need the US plant space for EVs, so the story goes.

roadburner · February 2017

andres3 said:

roadburner said:
I'm proud to say that I work for a company that offers four SUVs that are made in America; even better It can build one to order and have it at your local dealer in 3-4 weeks.
Is one of those 4 SUV's made to order in under a month the X1?

Unfortunately not; the X1 is built in either Germany or Brazil.

uplanderguy · February 2017

They've already got a huge infrastructure in Mexico---why would they build a new plant? They need the US plant space for EVs, so the story goes.

That one thing would keep me from buying a new car. It's not that I don't think there are quality cars coming from Mexico, but my take is, why reward the manufacturer for that? Same reason I wouldn't buy a Cruze hatchback and why I didn't buy an HHR in 2008.

Mr_Shiftright · February 2017

If you didn't buy what was made overseas you'd be living in a dark empty house eating Idaho potatoes. Not buying a car in Mexico isn't going to give anyone a job back that lost one, although it might allow someone to keep the one he has----but you'll pay more for the car and he'll pay more for auto parts for the car he's driving.

uplanderguy · February 2017

Again, I think I'm seeing California-think versus NE Ohio-think.

But that's OK of course.

Mr_Shiftright · February 2017

What matters is what happens on a national basis. For instance, reducing the dollar's value might benefit your region on a short-term basis but overall would hurt the purchasing power for the vast majority of Americans who don't live in factory towns. So it's National vs. Ohio-think in this case.

fintail · February 2017

Definitely for a net importer like the US, a weak dollar doesn't help actual working people. I think the cost of goods will rise more than the impact of new jobs. Those corporate profits don't trickle down as much as some have been told, and I think mere automation will prevent an en-masse return of manufacturing jobs. I also don't think the consumer sees any savings from a car built in a low cost market - it all goes to the top. MBs didn't get cheaper when certain models started production in Alabama. VWs Chevys and Fords didn't see a price cut with Mexico production either.

andres3 · February 2017

fintail said:
Definitely for a net importer like the US, a weak dollar doesn't help actual working people. I think the cost of goods will rise more than the impact of new jobs. Those corporate profits don't trickle down as much as some have been told, and I think mere automation will prevent an en-masse return of manufacturing jobs. I also don't think the consumer sees any savings from a car built in a low cost market - it all goes to the top. MBs didn't get cheaper when certain models started production in Alabama. VWs Chevys and Fords didn't see a price cut with Mexico production either.

Chinese manufactured wheels can be very cheap though. Browsing Tire Rack there are some seemingly nice looking wheels for $150 (17" x 8"). Lightweight, but is it durably constructed without paint finish flaws? Motegi Racing; any opinions on the brand here?

Won't be able to know that until I see them in person and use them for some time. On the fence. Maybe once the Alltrack reaches 5,000 miles and proves itself "not a lemon," and the OEM tires are at least partially used up.

Even the "cheap" wheels from Germany, Italy, and Japan can't compete with that pricing. They are very expensive. Thailand is one Chinese made competitor price wise that I've found browsing wheels.

Mr_Shiftright · February 2017

The real world solution for those folks living in bombed-out factory towns is not to wait for new jobs to come in, but to move to where there are jobs, if they are able. People following work has been an American way of life for centuries.

andres3 · February 2017

Mr_Shiftright said:
The real world solution for those folks living in bombed-out factory towns is not to wait for new jobs to come in, but to move to where there are jobs, if they are able. People following work has been an American way of life for centuries.

Human inertia is a problem. I've often wondered why people stay in desolate areas. I don't think it's just finances, because there are other lower cost areas to live in within the US.

fintail · February 2017

I wouldn't make that move based on political reasons alone, not to mention potential quality issues. I won't buy a car from that "most favored" area either, for the same reasons.

A lot of high employment areas are also desolate in some ways too, I call them "low cost, low amenity".

andres3 said:

Even the "cheap" wheels from Germany, Italy, and Japan can't compete with that pricing. They are very expensive. Thailand is one Chinese made competitor price wise that I've found browsing wheels.

uplanderguy · February 2017

In the case of NE OH, there are still factories doing well/going strong. As a resident here, I like to contribute if I can. I wouldn't buy a car I didn't like just for that reason, but to me it's gravy.

Personally, I have lived in suburban Atlanta, the small town where I grew up which is not a suburb, and suburban area where I live now. By far, the best quality of life IMHO was the small town. I think a square mile is a square mile wherever you live, but if you have to share it with fewer people, most everybody will get along better. Your results may vary, LOL.

andres3 · February 2017

fintail said:
I wouldn't make that move based on political reasons alone, not to mention potential quality issues. I won't buy a car from that "most favored" area either, for the same reasons.

A lot of high employment areas are also desolate in some ways too, I call them "low cost, low amenity".

andres3 said:

Even the "cheap" wheels from Germany, Italy, and Japan can't compete with that pricing. They are very expensive. Thailand is one Chinese made competitor price wise that I've found browsing wheels.

Do other Asia Pacific Countries that manufacture goods get a pass, or are they grouped in with China. I pay attention to where things are made, so the common ones I see lately besides China are:

Thailand
Indonesia
Malaysia

If I add clothes related items like belts, shoes, shirts, and the wife's expensive hand bag collection, you can add:

Bangladesh
India

tlong · February 2017

uplanderguy said:
By far, the best quality of life IMHO was the small town. I think a square mile is a square mile wherever you live, but if you have to share it with fewer people, most everybody will get along better.

Well I don't know, it seems that it's more the small town people who want to force their morality on others. So "getting along" is relative. But that's another topic not directly related to cars...

While I agree that it's great to support local manufacturing, there is something to be said for some trade and interdependencies. I see a web of trade as a way to reduce overall risk of wars, or to at least have those "wars" be economic rather than with bombs. So probably a mix, where we preserve significant manufacturing capability while still trading and using others' goods is a best approach. I do agree that a formal strategy over manufacturing and capabilities would be a good thing for this country, but I'm not seeing any politicians with that level of awareness or foresight.

uplanderguy · February 2017

My experience is around the wonderful-ness of knowing most everybody. That's something I've never had anyplace else and can't be replicated I'm afraid.

About a month ago, a Facebook video came my way, of a woman in Virginia looking for her birth mother. She said she was born in my hometown in Jan. 1975. I almost immediately thought I knew who her mother was, as she looked like a girl in my class I remembered having a baby, but sadly the mother had died some years back. I thought it wasn't my place to tell her. It ended up that in less than three hours after she posted the video on Facebook, she had received contact from her birth uncle. The very next Sunday, she went to our hometown with her adopted parents and met her birth family--nine uncles and aunts and twenty-six first cousins--at mass there. The priest told her story in his homily about how the whole town was excited for her. He had her come out to the center aisle where she thanked the parish and the town. She then said it was her adoptive mother's birthday, and he had her also come to the center aisle where the parish sang her "Happy Birthday".

Wonderful story which shows the power of social media, but she was blown away by the warmth and caring of everybody she met in my hometown...at church, afterwards, and also through social media. That's the kind of story I'm not sure would have the same ending where I live now.

For me, chain retail and restaurants don't overcome daily congestion everywhere. I'd rather go to those places on the weekend even if it's a half-hour drive.

As a side note to all this manufacturing talk, no matter who you like or hate, I think we'll all agree the stock market performance, at least so far, is certainly good for anybody who has an IRA or pension--which is probably most people here. I was expecting quite the opposite.

fintail · February 2017

If one wants everything wrong with suburban sprawl, look no further than Atlanta, and the TX-FL belt in general. I'd rather have a small town than deal with that, too.

My mom lives in a smallish town. The weather can be dreary, and it is a bit down on its luck in terms of the economy, but some locals still have fight left in them, and they do what they can to keep it going. I lived there from the time I was roughly in middle school through high school and shortly after, and don't regret it. It also has some lovely old housing stock, and a more relaxed pace, but there's one big problem - not many jobs capable of paying the mortgage on those nice old houses.

uplanderguy said:
In the case of NE OH, there are still factories doing well/going strong. As a resident here, I like to contribute if I can. I wouldn't buy a car I didn't like just for that reason, but to me it's gravy.

Personally, I have lived in suburban Atlanta, the small town where I grew up which is not a suburb, and suburban area where I live now. By far, the best quality of life IMHO was the small town. I think a square mile is a square mile wherever you live, but if you have to share it with fewer people, most everybody will get along better. Your results may vary, LOL.

fintail · February 2017

Don't forget Vietnam, especially for small electronics. I feel less bad patronizing them than some others, yes. When one treats social, environmental, and IP issues in the manner of a certain someone (who has been given free reign thanks to thoughtless politicos), it makes me have a hard time wanting to patronize it outside of maybe tourism.

andres3 said:

Do other Asia Pacific Countries that manufacture goods get a pass, or are they grouped in with China. I pay attention to where things are made, so the common ones I see lately besides China are:

Thailand
Indonesia
Malaysia
Bangladesh
India

uplanderguy · February 2017

I work at home, so the lack of good-paying jobs in my old hometown--other than MD's at the hospital, professors at the college there, or the handful of attorneys, etc.--wouldn't be an issue for me. No Target there, so the Mrs. has an issue, LOL.

tlong · February 2017

uplanderguy said:
My experience is around the wonderful-ness of knowing most everybody. That's something I've never had anyplace else and can't be replicated I'm afraid.

About a month ago, a Facebook video came my way, of a woman in Virginia looking for her birth mother. She said she was born in my hometown in Jan. 1975. I almost immediately thought I knew who her mother was, as she looked like a girl in my class I remembered having a baby, but sadly the mother had died some years back. I thought it wasn't my place to tell her. It ended up that in less than three hours after she posted the video on Facebook, she had received contact from her birth uncle. The very next Sunday, she went to our hometown with her adopted parents and met her birth family--nine uncles and aunts and twenty-six first cousins--at mass there. The priest told her story in his homily about how the whole town was excited for her. He had her come out to the center aisle where she thanked the parish and the town. She then said it was her adoptive mother's birthday, and he had her also come to the center aisle where the parish sang her "Happy Birthday".

Wonderful story which shows the power of social media, but she was blown away by the warmth and caring of everybody she met in my hometown...at church, afterwards, and also through social media. That's the kind of story I'm not sure would have the same ending where I live now.

For me, chain retail and restaurants don't overcome daily congestion everywhere. I'd rather go to those places on the weekend even if it's a half-hour drive.

As a side note to all this manufacturing talk, no matter who you like or hate, I think we'll all agree the stock market performance, at least so far, is certainly good for anybody who has an IRA or pension--which is probably most people here. I was expecting quite the opposite.

Great story uplander, you did good!

uplanderguy · February 2017

Thanks, but her uncle saw her video on Facebook, independently of me! The video got passed around to a lot of people from Greenville. I was correct in who I thought her mother was though.

andres3 · February 2017

We're Honda's suspect V6 transmissions back in the early 2000's made in Ohio? Not that it matters much.

I honestly can't remember if that 5-speed auto was made the same place they assemble the Accord's, in Ohio.

fintail · February 2017

I suspect the fragile Honda transmissions were an engineering defect rather than manufacturing.

andres3 · February 2017

fintail said:
I suspect the fragile Honda transmissions were an engineering defect rather than manufacturing.

That's true, I remember reading they used the same transmission for the 4-cylinders, and didn't have the issue. That right there is the problem as the V6 was much more powerful than the 4-banger.

fintail · February 2017

Exactly, I suspect the torque melted it.

For V8 AMG cars, the transmission from a V12 car would be used to compensate for the power - and even then, it needs to be maintained.

andres3 said:

That's true, I remember reading they used the same transmission for the 4-cylinders, and didn't have the issue. That right there is the problem as the V6 was much more powerful than the 4-banger.

Sandman6472 · February 2017

Interesting how the economy has been doing pretty good these last few years. The stock market has been also in a roll though I expected it would continue to keep rolling no matter who lives in the White House. Hopefully things will continue to be good the next few years as they have been under the last guy! Glad that my investments are doing well as I hope to retire again in a year or two.

The Sandman

uplanderguy · February 2017

Love it or hate it, the market has been performing rather astonishingly the past few months.

Mr_Shiftright · February 2017

The economy tends to ignore whoever is in the White House. I remember reading a poll of market analysts and academic economists and the overall opinion was that if the office of the President was legally abolished, the economy would behave exactly the same without it. There are just too many outside influences, global trends and unforeseen events to give much credence to the influence of the office of President on the economy.

Some presidents get lucky while in office, and some unlucky, and get praise they don't deserve, or criticism they don't deserve.

tlong · February 2017

With car sales at an all time high as well as the market, there is bound to be a correction. The market is around triple what it was 9 years ago, I fully expect a significant correction in the next couple of years.

fintail · February 2017

By looking at my 401K, the economy has been performing rather astonishingly for about 6-7 years. Which is worrisome, if one subscribes to "the bigger they are" school of thought. Gotta be careful too, a prior boom/bust caused political upheaval and "it's the economy, stupid" was behind it.

Mr_Shiftright · February 2017

I'm quite concerned that something like 1/3rd of all car loans are sub-prime. The car loan economy is HUGE.

uplanderguy · February 2017

I think any of us must admit that the increases since election day are not typical and in fact flew in the face of pundits. For purely selfish purposes, I've been happy with the increases although I am cautious about a correction. But I've felt that way for going on four months now.

fintail · February 2017

Personal debt has also been approaching all-time highs, as wages continue to lag increases in the cost of living. Luckily cars are easier to manage than houses.

uplanderguy · February 2017

Yes, easy-money mortgages are a big part of the problem in the past several years. I know someone who barely makes a living who has a mortgage four times what mine was. Admittedly, she lives in California, but even when I can afford something, there's something in me, some point, where I'm like, "I just can't justify that". I think that's not a problem for a lot of folks. Right now, I don't want to spend $700 on airfare to look at a Studebaker for sale that I want, LOL!

Mr_Shiftright · February 2017

Disagree if the inference is that this is automatically a good sign. Just a cycle and not necessarily an auspicious one. A look back to 1928 at how the S&P 500 index SPX, +0.15% has performed between Election Day and Inauguration Day finds that the all-time champion is none other than Republican Herbert Hoover, who was elected to his first and only term on Nov. 6, 1928.

There's a certain irony in today's stock market performance when comparing it to the market's 3-month plunge during Obama's first months in office, and then a strong recovery.

So history has examples of a bad performing Nov-March turning quite good, and a good-performing Nov-March turning into a disaster, with the sitting president not much involved in events either way.

If you want to see the power behind the throne, look to the Federal Reserve---they can really affect the economy almost immediately.

fintail · February 2017

Post-election day is effectively the same as pre-election day. Any doubts about instability from new leadership are canceled out with the hope/promise of a more "business friendly" climate. But the best business climate is one where consumers have the ability to spend.

There are quite a few housing bubble markets out there right now (I'm deep in the heart of one, it is insane here). How those play out will be just as interesting as the stock market or American car sales.

Buying American Cars What Does It Mean?

Comments

Helpful Tools

Most popular vehicles