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· Premium Member
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Discussion Starter · #1 ·
Jerry e-mailed me once and has written many times about "cheap Korean cars" so his distaste for imports is apparent -- see his article here:

Backseat Driver
Are You Really Buying American?
Jerry Flint, 03.30.04, 6:00 AM ET

Sometimes I wonder where the auto industry gets its people. Perhaps Detroit does its recruiting at Dropout U or some alien world 100 billion light-years away.

The latest example: an advertising campaign for a new Chevrolet sport utility vehicle called the Equinox, launched March 20 with the arrival of spring.

The headline over the ad reads, "An American Revolution."

Here's what has me hopping mad: The Equinox is made in Canada, and the engine comes from China. This is "an American Revolution" all right, the kind that has become the number-two issue in the presidential campaign.

"We chose a campaign that communicates that something new and different is happening at Chevrolet," said Brent Dewar, general manager of Chevrolet. Right. Moving jobs out of the country and to China.

Let's hope Lou Dobbs of Time Warner's (nyse: TW - news - people ) CNN doesn't hear about this. He's been focusing on the issue of outsourcing, and he might be very upset about that tagline. When Lou gets upset, the rest of us hear about it.

But it's not a bad time to discuss this topic. Today there's a lot of talk that, before long, the auto industry will be moving to China and importing Chinese-made cars.

Detroit is moving as much work to Mexico as it can. And work had been shifted to Canada long ago. Labor costs are much lower in both countries. (Costs in Canada are lower because of the currency and because the government picks up medical expenses, saving the companies lots of money.)

I don't see a problem here. Canada and Mexico are our next-door neighbors. The Canadian operations go back a long time and were, to a great degree, expanded by a treaty between the United States and Canada. American-made vehicles are also sent to Canada and Mexico. If we help create jobs in Mexico, we reduce the number of Mexicans illegally immigrating into this country.

Several manufacturers--General Motors (nyse: GM - news - people ); Ford Motor (nyse: F - news - people ); Chrysler, a unit of DaimlerChrysler (nyse: DCX - news - people ); Nissan Motor (nasdaq: NSANY - news - people ); and Volkswagen--send Mexican-made cars and trucks to the U.S. As yet the two largest foreign sellers here, Toyota Motor (nyse: TM - news - people ) and Honda Motor (nyse: HMC - news - people ), are small in Mexico.

Currently, there are no vehicles built in China for export here, and I seriously doubt that there will be for a long time. Labor may be cheap in China, but materials and transportation are costly and quality would be a problem. Vehicles could be built there for export to other Asian markets, but that wouldn't displace any American output, because Detroit doesn't export many U.S.-made vehicles to Asia.

While I don't expect to see Chinese-made vehicles in the U.S., it is a different story for Chinese-made auto parts. The Detroit producers (not the Japanese and Germans in this country, to my knowledge) are squeezing their suppliers to cut prices, and are suggesting strongly that they could cut costs by moving production to China. Some jobs will be lost because of this, but I doubt that it will be significant. No one likes supply lines that long.

The Chinese are likely to make more inroads in the replacement-parts business. My garage-owner son tells me that the Chinese are good at things like cast-iron parts, which are much cheaper than components made elsewhere, yet are of good quality.

Let's not forget that foreign carmakers like to build in America and are expanding here. Companies like Toyota, Honda and Nissan usually ask their home-based suppliers to build in this country, too.

On the whole, however, there will be no mass exodus of Detroit jobs to China. The Equinox engine is relatively unusual, I believe. The vehicle was built in Canada to bail out a disaster of a plant run by Suzuki, one of GM's Japanese affiliates. Since it was opened, more than a decade ago, that Canadian plant has operated at less than half its original capacity.

So there's no need to worry about the Chinese taking over the U.S. auto industry. But it is still insulting to call a vehicle built in Canada with a Chinese-built engine "an American Revolution."

· Registered
4,018 Posts
I read the story and the "American Revolution" does lead to sniping.
That is what I fear. A general trend to outsource offshore. First, it is some small part. Then, it is a % of the vehicle. Then, the vehicle with the company only having a front office in the States.
Radio Flyer is moving its mfg out of Chicago to China. The only thing remaining is the president who says "We're still a Chicago company!"
It's like I said in a different thread, the "imports" like Honda and Toyota will be building assembly plants here as well as taking advantage of any local parts dealers. And the domestic companies will be outsourcing. Eventually, it'll be like water seeking its own level and they'll look alike.

So, any loyalty advantage that a company may have (especially with the older crowd) is negated.

If the imports such as Honda and Toyota are coming to these shores and beating the domestics at their own game they are either better at the business, they do not have the burden of unions (I don't really think that this is the issue or at least a major issue) or they do not have the burden of management and retiree plans to contend with.

· Premium Member
23,308 Posts
while i understand upset over the loss of american jobs... the ad campaign doesn't say "made in america revolution". chevrolet now offers american buyers choices in more vehicle markets than any one automotive division. some of those vehicles are imported, but a traditional chevrolet customer can now get just about any sort of vehicle he wants without leaving chevrolet. most of chev's vehicles are new this year or are at least will be by the end of 2004. THAT is the revolution as i see it. and that makes it a valid campaign.

someone interested in a sonata can now buy a chevrolet (epica)... a much more comparable car than the malibu. i think it's great that chevrolets reach is now a bit further, and offers valid compeition to kia and hyundai, and vehicles like the escape and crv and rav4, along with still targeting the domestics and other imports with their more traditional vehicles (cobalt/malibu/impala/vette, and the truck and SUV lines).

· Banned
7,975 Posts
What he does not mention are the other cars in the commercial like the Malibu which is built in Fairfax KS, the Colorado which is made in Shreveport LA, the SSR which is made in Lansing MI, the Corvette which is made in Bowling Green, KY.

Nevermind the up coming Cobalt which will be made in Lordstown OH.

So what if at the time of the development of the Equinox it was cheaper for GM to offer an engine that is made by GM, designed by GM and produced in a GM plant, that just happens to be in China? I am sure that there will be another engine available in the future versions of the Equinox that will either be US or Mexican sourced.

Also, the sister version of the same platform that the Equinox uses, the Saturn VUE is made in Spring Hill, TN.
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