Wednesday, June 1, 2011

Buying American Cars Supports Local Industry, Right? Now What is an American car?

Remember how back in the 90s, American auto manufacturers, a bit threatened by the success of the Japanese imports, began to push the virtues of buying American and supporting American industry? You even got a little sticker on your car that you purchase was built in America by Americans. The 1994 American Automobile Labeling Act has required for years that all cars selling in the US come with window stickers to mention where the car was assembled, how much local content the car has and where the engine and transmission came from. Let's say that you are someone who has really taken that message to heart and you really want to only buy American cars so that you can support American industry. You think you deserve a little bit of luxury and you choose the 2011 Lincoln MKZ. You tell your friend who is a member of the United Auto Workers union and hope for some well-deserved praise. All you get for your trouble though is a dirty look. It turns out, your car is manufactured south of the border in Mexico.

What do you do when an American company like Ford wants to sell cars in America to make elsewhere? True fans of the Buy American movement certainly don't like your European, Korean or Japanese brands. But they also completely disapprove of cars that the Big Three assemble in other countries. Even if it is only the assembly that takes place elsewhere. With the Lincoln MKZ, high-value parts like the engine and transmission actually get completely made in America. If it gets assembled elsewhere though, it usually isn't considered to be domestic. A car that's made in America has a VIN number (that you find on the base of your windshield on the driver's-side) that starts with the numeral 1. What should you do if you are really trying to keep jobs in America whatever purchase you make? How are American cars supposed to be defined?

According to that AALA's labeling practice, a Honda Accord would be almost completely American since it is almost completely built with domestic parts in America. And a Buick Regal, that is built in Germany out of internationally-sourced parts is almost completely foreign. To the common buyer though, buying Honda feels like buying Japanese while buying a Buick feels like buying American. And then of course, there is the whole debate on what to do with Canada. The AALA's labeling practice considers anything manufactured in Canada to be domestic to the US. Basically, all you get is a sticker that tells you how much of the car was made where. The government has backed out of actually telling you which the American cars are. There is no sign that says "This is an American car".

The decision on what constitutes an American car ultimately comes down to the consumer. It is up to you to decide.

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