What is an American car? It is a question that periodically, and regularly, surfaces. This week a professor at American University in Washington, DC published the latest version of his index in an attempt to answer the question.
The flaws in the professor’s methodology have long been pointed out. He assigns rather arbitrary numerical values to such things as where a company’s headquarters are located; he blithely assumes that all vehicles produced in the US by companies with US headquarters conduct all of their research here, while international companies are assumed to perform only half of the research on US-made vehicles here, and so on.
This leads to some amusing quirks. FCA (Fiat Chrysler), with its headquarters in London, gets a headquarters index of three, while the Detroit Two get a value of six, and other international companies get a zero. At the same time, companies like Honda and Toyota (to name just two) that have launched large research programs on autonomous and connected vehicles in the US find their investments devalued.
My point isn’t to take issue with the index. It’s full of subjective judgments, and while it’s much less scientific than on-base percentage, it leads to entertaining discussions. The broader point here is that we need to deepen our understanding of what the American auto industry looks like today. General Motors sells more cars in China than in the US today, and generates profits accordingly.
The most “American” vehicle on the market in the US today, according to objective standards that measure parts and labor content, is the Toyota Camry produced in Kentucky (and, not incidentally, exported around the world). Almost half the cars produced in the US are made by international automakers in their factories here in the US using American labor, American parts, and American investment. You can find out more about this at our Here for America site http://www.hereforamerica.com.
When we think of the US auto industry, and of US manufacturing, we need to recognize that the US auto industry of 2016 is the global auto industry – and we’re all in this together.