Reposted from How Americans Can Buy American
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Roger Simmermaker | January 26, 2013 | howtobuyamerican.com
You’ve probably heard the expression What have you done for me lately? Well, when it comes to our economy and specifically to American companies in the automobile industry, that’s actually an important question to ask too.
An even more relevant question is, What have you done for me in the last 100 years? American companies have been building automobiles in America for over a century now. The answer to both questions actually is quite a bit, because American automakers like General Motors helped build the middle class in this country.
That’s part of the reason why I believe that we should always patronize American-owned companies like GM when buying a new car or truck. The popular phrase coined by Charlie Wilson, What is good for the country is good for General Motors, and vice versa still holds true today, despite an aggressive increase in new factories being built in the U.S. by foreign owned automakers.
Most likely, the day will never dawn when Americans can take Charlie Wilson’s quote and replace General Motors with any foreign automaker. Why? As conservative syndicated columnist Charley Reese wrote in his review of my book How Americans Can Buy American (First Edition), Toyota, public-relations efforts notwithstanding, has its primary loyalty to Japan, as it should. If conditions arise in which Toyota must choose between what’s in the best interests of its American subsidiaries and what’s in the best interests of Japan, it will choose Japan.
Americans have many, many reasons to support a home-team company like GM. When they do, they’re contributing more to their country’s prosperity than if they bought an automobile from a foreign automaker, regardless of where it was built.
Purchasing from an American company like General Motors supports 77,000 workers and over 500,000 retirees in the United States, whereas Toyota employs about half of the workers that GM employs. And retirees? Since Toyota’s first plant wasn’t built in the U.S. until 1987, it has a fraction of U.S. retirees as compared to GM.
Although it is true that foreign companies are investing in American factories, so is GM. In 2011,GM announced that it would invest $2 billion in seventeen U.S. plants, committing $6.9 billion to expand or advance operations in a dozen states since June 2009.
In 2009, GM began building the Buick LaCrosse (formerly made in Canada) in Kansas City, Kansas. In 2011, production of the Chevrolet Aveo (now called the Sonic) moved from South Korea to Michigan. In May of 2012, GM announced it would move production of the Chevrolet Impala and Equinox from Canada to the United States.
GM is building new models in America too: the new Chevrolet Cruze in Ohio and the new Buick Verano in Michigan, along with the Chevrolet Sonic. The new 2013 Malibu Eco is being built in Kansas City, Kansas.
GM is not just building new models in America. Many of the models are winning awards. J.D. Power &Associates noted in 2012 that the Buick
Enclave, the Cadillac Escalade, the Chevrolet Malibu, and the GMC Sierra all received the top award in their segments in initial quality.
According to a 2012 www.cars.com article, Detroit automakers build a majority of the nameplates with high domestic content. So when you buy an American brand car or truck from General Motors (Chevrolet, Buick, GMC, Cadillac) there’s a good chance that you are employing more Americans in the automotive parts industry in addition to actual GM autoworkers, making it a real win-win situation for American workers.
Maybe that’s why a June 2012 www.cars.com survey found that 23 percent of Americans polled said that they would only consider an American manufacturer when making a new car or truck purchase. Maybe that’s why GM still has the number one market share in both the U.S. and the world. And maybe that’s why Charlie Wilson was right!
On the subject of company loyalty to home country, I am debating in favor of reshoring and company duty to country in an online written debate in The Economist at http://www.economist.com/debate. I encourage you to follow the debate and vote. Voting ends Friday Feb 1.
Sorry Hary. I am voting no. It would be a mistake to push companies domiciled in the U.S. to locate business in the U.S. for any reason than company profits. U.S. companies are in competition with companies located outside the U.S. Don’t make their life harder. Instead, encourage all companies that import into the U.S. to domicile in the U.S. or in a nation that has balanced trade with the U.S.
Our problem is not only U.S. companies. Our problem is mostly companies domiciled outside the U.S. that have unrestricted access to our domestic market AND strong financial and other support from their governments. Work on our most pressing problem first.
Raymond,
My position is not too different from yours. I argued that U.S. home based MNCs should keep their investment and employment in the U.S. to at least the proportion they sell here. Mainly we argue that they should make their sourcing decisions based on total cost instead of purchase price so that they do actually enhance shareholder value now and in the long term. So something like enlightened self interest.
Best!
I think they pose the wrong question. Governments are responsible for making policy that is in the best interest of their citizens, the common welfare. If there is a problem with trade deficits, then the policies can change. If investors made the decision to base their supply chains in another country, then they may lose some of their investment expectations.
Corporations can adjust to this change in the best interests of their shareholders. The question suggests that corporations have decision of whether to put patriotism or profits first. It suggests that investors have the choice and the decision. They don’t. That is the government’s function. Politicians should adjust policies for the best interests of the country, not what is in the best interests of corporations. If that means that imports are taxed more because of an imbalance in trade that threatens the nation’s general welfare, then it should be done. If shareholders made investments in supply chains and their bottom line is affected, then they will adjust to the new market conditions.
When we had a problem with the Japanese and huge trade deficits, we changed policy and had them build plants here in the U.S. There was a problem with Japan and trade deficits and it was solved.
The whole reason this question was raised, it seems, is because the interests of the corporation have supplanted the interests of the common welfare in national policy.
I voted “yes” because I think that investors should be as patriotic as soldiers. Soldiers either put the interests of the nation above their own self interests or they are comprised of people who have chosen to be a soldier because it is the best option in an economy. Either way, the common welfare is embodied more in a soldier than in an investor. The question is posed, it seems, by “The Economist” because nations are putting the interests of corporations ahead of the common welfare. Thus, the question is posed: “Should investors put their profits over patriotism?”. I say it is not their choice. It is the choice of a competent and virtuous and principaled leaders in our democracy elected for such qualities. It is just sad that they are not a majority in our government.
Tom T.
Agreed, Tom T.
I understand the position of citizens of other nations, that locating the production of manufactured items should be where they are consumed and utilized. This is the essential issue of “free trade”.
This provides jobs, tax revenues and prosperity for a wide range of reasons and peoples. The old GM was correct in spreading the wealth to our allies and friends, such as Australia. The Holden version of the Camaro and other iconic US cars are beloved by enthusiasts and employees, there.
However, Tom is correct, that American companies, especially those bailed out by US taxpayers, should remain majority American based. That includes the bulk of their actual manufacturing, at least 60%, a minimum “D” effort. The corporate and national tax policies should reflect this and reward companies for remaining in the US by import tariffs and tax breaks in a graduated scale, as more production in the US is achieved. The American System, a basic function of a nation that plans to survive. 160 + nations have learned this lesson we used to “export” to them thru diplomacy in an attempt to raise all boats. WE have abandoned our own known good policy.
The CCP and other nations contributed nothing to the bailouts [except what they paid in lobbying funds] and they are benefiting mightily from saddling 1 second old Americans with lifelong debt.
The concept that free trade would benefit Americans and alter the course of Communist/Authoritarian/Opportunistic states to become more like the old Bill of Rights US Republic has been proven as ludicrous.
GM used to think very differently, regarding Communist and other totalitarian nations. Not clairvoyant, but pretty darn close, they are talking about retaining Constitutional free trade within our borders, while using import tariff protections, a given at the time. Please watch to the end, less than 12 minutes.
http://archive.org/details/InOurHan1950_3
Thank you for all your work, Harry Moser!
Hi Raymond, Where would you draw the line at your contention that “It would be a mistake to push companies domiciled in the U.S. to locate business in the U.S. for any reason than company profits.” What if profits are higher using slave labor in Africa? What if profits are higher using child labor in India? What if profits are higher belching heavy metals and carbon and noxious gases in China? What if profits are higher in Colombia where death squads prevent unionization and humane working conditions?
Not to mention the fact that it is the job of national governments to promote the prosperity and welfare of their citizens. That would mean it is the responsibility of the US govt to formulate trade policies not for the maximum profit of multinational corporations (which have shown zero loyalty to the USA) but rather for the benefit of American citizens. And thus a balanced trade policy requiring companies to invest in American manufacturing and employment in order to sell their goods in our country would definitely be the right policy, however much it might “push companies” to locate business here at less profit.
Will - Your question is whether the fact that U.S. corporations use slave labor overseas changes my view that they should have no responsibility to locate some of their production in the U.S.? My answer remains the same. They need to make a profit. If the requirement to locate some of their production in the U.S. gives firms domiciled in other nations a cost advantage in production, I am against a requirement to locate production in the U.S.
My question to you is as follow: If all U.S. domiciled firms ceased using slave labor, would that reduce the total of slave labor used in the world?
We need, we must, focus on what we can control - the conditions under which imports are sold in the U.S. I do not believe the U.S. public is willing to pay for the number of inspectors that would be required to go into every factory in the world that is making goods to be shipped to the U.S. and stay there to determine that every item shipped to our shores is produced according to U.S. standards.
The only thing we can do is to pass laws to reduce our trade deficit so our economy can grow enough to provide financial resources in U.S. hands - which we can then use to hire more border agents to really inspect the food that is imported.
Hi Harry I’m glad made it to Tradereform .org We need your support. I did vote YES because I believe we should never put profits ahead of patriotism. The people who died for our great American way of life deserve the respect that the benefit of corporate profits should never be put ahead of the benefit of a robust economy for the majority of the citizens. I know greed is important in capitalism but we should not have the 3 percent trumping the 97 percent of the citizenry and this is exactly what is happening in Washington…I think it was called the common wealth of the country and to me when my dad was fighting in the worlds largest tank battle in Belgium and my other dad was on the beaches of Iwo Jima the common wealth of our country will always come first… The only reason people vote no on Harry survey is because they never had to make any sacrifice to anything but their greedy selves…Please wake up before its too late and set your greedy corporate profits aside because Harry is right.
Important stuff above. All agree that the recent history of producing so much of U.S. consumption outside the U.S. is harming all of us - even those who are sending production outside the county. We disagree on the efficacy of relying upon consumers to change the situation. In past years most consumers did not connect the dots. They choose that product that was the best buy for them, ignoring the consequences of all these choices on domestic employment. I agree that more people are now aware and are interested in “buying American”. But these good people are, in my opinion, outnumbered by those who don’t think, are not informed and don’t care. Consumer choice should be limited to those products that benefit all our citizens.
Tom T. is obviously struggling with this issue. I am not. I am firmly convinced that our government should control imports into the U.S. and that all of us who understand what is going on should unite in pushing public opinion to force our leaders to act responsibly for the good of the country.
I am not struggling with the issue. I am just pointing out that it is the government’s job to make policy for the welfare of its people and businesses should adjust to those policies, not the other way around. I agree with all that Will said above. Following the laws and policies of the nation should not be voluntary. Policies should not be the result of the influence of money on politics. It is just unfortunate that our policy makers have lost so much integrity or competence that this is what happens more often than not.
A few good supply shocks would help solve some of these problems. Maybe we could hire the Longshoremen to go on strike for the good of trade reform and make out sourcing more risky for businesses. We could hire some of the Chinese experts and Japanese experts who have been able to out game our political leaders for ideas.
Tom T.
Tom T. says “I think they have asked the wrong question”. BINGO ! Right on. The proper question is how do we restrict imports coming into the U.S. from nations that undercut domestic production by a series of governmental actions that support exporting to the U.S.? The answer to that question must be premised on the reality that the U.S. has no right and no way to control what other sovereign nations do. We can only control what we do.
Tom T. is clear about his values. He wants to help the average U.S. citizen. But he knows that his values are not shared by elected politicians. They want to help the average U.S. citizen when that action will help them and their party get reelected.
A public that is knowledgeable, smart and aroused is our only hope.