Five Reasons Not to Buy American Cars

Buy a GM or Chrysler vehicle, and the warranty will backed by the full faith and credit of the U.S. government. Is that a good enough reason to buy domestic?

Probably not. With GM and Chrysler begging for billions in government aid to survive–and Ford (F), which hasn't taken any bailout money, still hemorrhaging money–many car buyers don't want anything to do with the once-mighty American auto industry. Polls show that at least half of Americans oppose the auto bailout, which isn't surprising considering that Detroit's market share has dropped from 75 percent in the 1970s to less than 50 percent today. Millions of once-loyal domestic consumers feel burned by shoddy products and arrogant service.

Quality has improved since then, and Detroit has gotten the message that they need to improve service and offer more appealing cars. But many buyers remain unmoved. Here's the case against buying a domestic vehicle:

Quality is spotty. Sure, Ford and GM have made meaningful gains in quality and reliability, but their offerings are still hit or miss. In the U.S. News new-car rankings, for instance, the Chevy Malibu and Ford Fusion rank in the top 5 in their category. But there's neither a Ford nor Chevy that cracks the top 15 in affordable small cars. In Consumer Reports' reliability rankings, 7 of the 10 lowest nameplates are domestic, while all of the top 10 nameplates are foreign. As for Chrysler, the government's automotive task force highlighted "the inferior quality of its existing product portfolio" to help explain why Chrysler's prospects as a standalone automaker are weak. Who wants to gamble with quality–and pay a high price for guessing wrong?

There's nothing special about the cars. Okay, so a few rank as high as Toyotas (TM), Hondas (HMC), or other standard-setters. So what. There's intense competition throughout the car business, and there's virtually no category where GM, Ford or Chrysler offers a must-have vehicle that's markedly better than what other carmakers offer. So why take the chance with a domestic model when you're safer buying an import brand?

Government guarantees are unconvincing. The feds might be backing up GM and Chrysler warranties–but who wants to stand in line at the DMV to wait for a warranty repair? The government hasn't said exactly how it will honor warranties if GM or Chrysler goes out of business, except to say it will "identify an auto service provider to supply warranty services." Uh, no thanks. I'll just stick with the Toyota dealership down the street.

The Detroit 3 are environmental laggards. Chrysler still doesn't even offer a hybrid. GM spent nearly a decade scoffing at hybrids, until gas hit $4 a gallon and the Toyota Prius became a bestseller. Ford's a bit further ahead, but its Fusion and Escape hybrids are still a generation behind Toyota and Honda–and pricey compared to new hybrids like the Honda Insight and the third-generation Prius. While hawking their huge, gas-guzzling SUVs, all three automakers fell far behind on fun, economical small cars. And now, despite aggressive plans to catch up, even bold new vehicles like the Chevy Volt electric plug-in won't help Detroit reclaim environmental leadership.

Other cars are just as "American." The Ford Fusion and Chevy HHR are assembled in Mexico. The Buick Lacrosse, Chevy Impala and new Chevy Camaro–supposedly a quintessential American muscle car–are built in Canada. Meanwhile, the Honda Accord, Toyota Camry, Mazda 6 and a lot of other "foreign" cars are assembled in the United States. It's true that many GM, Ford and Chrysler products are still made in America, and that profits–when there are some–get repatriated to the country where the automaker is based. But every major foreign automaker now builds cars in the United States, or plans to, and it's Americans who hold those jobs. So many "foreign" automakers seem nearly as American as GM, Ford, or Chrysler. They're just not based in Detroit.

Disclosure: no positions

Comments

[Bob1:]

Rick,

You are woefully misinformed. Ford's North American offerings are "best-in-class" or amoung "best-in-class" with best safety (16 vehicles w/ 5 star ratings, Honda is 2nd with 13), fuel economy and quality. The Ford F-Series Truck is the best selling vehicle on the planet for ~30 years now and outpaces all competitors in every catagory. The Fusion Hybrid has the highest fuel economy of ANY midsize vehicle (hybrid or standard), in it's class and the standard Fusion has the highest fuel economy for it's non-hybrid class. The Escape Hybrid has the highest fuel economy for an SUV. The 2010 Fiesta (currently available in Europe) is heralded as the best B-class vehicle worldwide. Shall go on..... You need to pay a visit to Ford Public Affairs and get educated so you are not advising your readers to continue to sent their hard earned dollars to foreign economies.

Bob

Apr 01 02:05 PM

[babyray:]

5 reasons not to buy a Honda or Toyota!
1. A majority of their operations & employees are in foriegn countries
2. 65% to 85 % of their parts are coming in from Japan. Yes that includes the southern assembly plants.
3.Niether company gave a dime to a Sept 11 charity. (GM gave 1 million and donated trucks).
4. American Companies quality rankings and plant effiency is equal to and at times surpasses the foriegn companies. (you wont hear that on FOX News).
5. Pearl Harbor.

Apr 01 02:16 PM

[Uforgot2men...:]

Average Domestic Content in vehicles: Big3=80% vs. foreign=35%.

Amount spent on U.S. parts in 2007: foreign=$52B vs. Big3=$171B (that's U.S. employment dollars).

Investment in U.S. plant/infrastructure 1980-2005: foreign=$33B vs. Big3=$206B (that's over 6 times more spent compared to ALL the combined foreign car companies!).

Apr 01 02:18 PM

[Uforgot2men...:]

You should know the facts before publishing this garbage... No go make love to your Toyota!

Apr 01 02:20 PM

[pjr:]

What total ignorant babble. Too many people talk without facts, and your article is just one more example.

Nothing special about the cars? Try visiting a showroom. CTS, Malibu, Mustang, Flex, Fusion hybrid.... all OUTSTANDING vehicles in terms of features, innovation, and quality. The new Taurus is best in class, which you will see in a few months. It's strange how industry mags like Automobile and Car & Driver can gush about these models, but writers sitting in an office, isolated from the real world, can pass down such one-sided decrees.

Quality: Ford is AHEAD of Toyota and Honda in several 3rd party measures of overall quality. And I believe that their Focus is right up there in the rankings... unless you don't consider that a small car. GM has made great strides, especially in their newer designs, but you are right, there is some spottiness. Chrysler is lagging, but still overall quality is improved. Chrysler quality has not dropped; it's just that the competition has improved along with them over the past decade, and at a faster pace.

Environmental laggards? Again, wrong in most aspects. Ford's new Fusion is a generation AHEAD (not behind) of Toyota and Honda, hence 41 mpg, which is 6 higher than the Camry. Ford also offers the only compact SUV hybrid, which has been on the market for several years.

And the Americans didn't "hawk their huge, gas-guzzling SUVs" --- they built what Americans wanted. Smaller pickups and SUVs were offered by all three companies, but they sat on lots which consumers flocked to larger offerings. Last I heard, companies should build products that consumers want. Which is why Toyota, Honda, and Nissan started building large and larger SUVs as well.

Correct, Chrysler still doesn't offer a hybrid. But to say that GM did nothing until gas hit $4 a gallon is silly; you know that it takes at least 3 years to bring a product to launch. So, that means back in 2005, back when gas was $1.60 per gallon, GM made that decision to proceed.

As far as being American, money spent with the Detroit 3 flows back into this country. The are responsible for 3 million American jobs. They pay taxes that flow into local govermets and our federal budget, adding to the strength of this country. And, these companies have contributed to charitable causes more than any others. Look up who contibuted vehicles, money, equipment, and even moved their employees into the line of fire in the wake of relief efforts for the 9/11 attacked and Katrina. Toyota contributes a box of staples.

By the way, Canada and Mexico are free trade zones. They also buy many many vehicles built in the US.... do you understand free trade?

Of course, you sound like Sen. Dick Selby, who bashes Detroit, yet prostitutes his state by giving foreign companies free land, huge tax breaks, and below market labor, which, as a result of no manufacturing strategy in this country, is detroying the economic base of the USA.

Apr 01 02:21 PM

[User 387027:]

OK, I retract my "good article" comment, my only complaint is high cost of parts and maintenance on my chevys, (when they need it, which has been rare).

Apr 01 02:36 PM

[epeon:]

I think your data is a little dated. It is certainly true that in the past American cars were bad quality (as my wife who had a 1982 camaro reminds me quite often). However, the cars today seem quite competitive in quality going by most of the surveys (e.g. J. D. Power). The problem, I think, is that many people were turned off years ago and will never even consider an American auto. Give the Japs credit, they produced good cars and have a loyal following.

However, there are other issues. I bought a Ford recently and it is quite good. It is also, way cheaper then a Toyota or a Honda. For example, I looked at a Honda Accord and the best price I could get was $21,000. And, that was a pretty base Honda. At the same time, the base Ford Fusion was going for a little over $14,300. Even a loaded Ford Fusion (V6 and all the trimmings) was about $17,500 (the equivalent V6 Honda was north of $24,000). Part of this discrepancy is that the MSRP for Jap cars is an advertising come on. All of the dealers sell cars north of that. For the Americans, the MSRP is what the "want" to sell them for. The Americans will haggle.

Anyways, I think the American cars today offer significant value over the Japanese. And, as long as the press still thinks in the past, this will probably stay true. I suggest that people should take advantage of the press' foolishness and, if they are in the market, buy a Ford.

Apr 01 02:41 PM

[Speedzzter:]

Too bad we can't replace the bandwidth wasted by "Tokyo Rose" Rick Newman with a higher-quality columnist from "Sweet Home Japan."

Newman apparently believes that we all should just cooperate with the Japanese invasion/takeover of our MOST BASIC INDUSTRY -- the industry that was the backbone of our military triumph over the godless, fascist agressors from Japan.

If we were going to give Japan the keys to the city, why didn't we just surrender in 1941?

In addition to the brilliant reasons posted earlier, here's five more reasons NEVER TO BUY A SINGLE THING FROM A JAPANESE AUTO COMPANY.

1. Protectionism -- Japan's car makers incubated in protectionist climate which prevented the Detroit 3 from making more than token investments in Japanese OEMs or selling cars in their market.

2. Predatory Business Model -- Japan's car makers were only profitable because of exports, which created huge trade deficits.

3. Lack of Domestic Content -- Just because a Japanese invader car is assembled by non-union labor in the U.S. doesn't mean the parts come from here. American cars support hundreds of thousands more OEM parts supplier jobs than do the invading Japanese transplants.

4. Lack of soul -- excluding a handful of limited-production sports models, Japanese vehicles have all of the driving panache and "soul" of a refrigerator. Buying a Japanese sedan is like wearing a $20-80,000 badge proclaiming that "I'm a self-centered weasel who wouldn't know an exciting car if it ran over me."

5. Government Subsidies -- According to Toyota-ex Jim Press, the Japanese government virtually paid for all of the electric hybrid technology that the tree huggers are ramming down our throats. And its well documented that the Japanese government has provided scads of subsidies and incentives for Japan's invasion of the U.S. auto market.

6. (Just like Joe Isuzu, I lied -- there are more reasons not to send anymore American money to Tokyo)

Buying Japanese deprives the Detroit 3 and their suppliers of necessary investment capital.

7. Bataan Death March.

8. Battle of Midway.

9. Iwo Jima.

10. Guadalcanal

11. Battle of Leyte Gulf

12. Saipan

13. Battle of the Java Sea

14. Kamikazes (not the drink)

15. Nanking Massacre (300,000 Chinese People Killed, 20,000 Women Raped)

16. Causes thousands of quality U.S. jobs to be outsourced to Asia.

17. Destroys many American communities who depend on manufacturing.

18. Subsidizes the pagan, sexist, and zenophobic Japanese culture.

19. Increases the trade deficit.

20. Hurts the value of the U.S. Dollar

21. Multiplier effect (dollars staying in the U.S. will keep circulating in the U.S. economy, creating more jobs and improving the standards of living)

22. National pride -- Let's act like AMERICANS!

23. There are plenty of excellent vehicles sold by Detroit (don't buy into the sycophantic pro-Japan bias of the elite media and the self-selected, methodologically-invalid "Consumer Distorts" surveys.

24. Your grandchildren -- you won't have to look them in the eye and explain why you selfishly helped bankrupt the U.S. auto industry.

25. The Japanese are apparently incapable of making a Mustang or a Shelby GT500, or a Corvette, or a "real" Challenger, or any legitimate performance car that isn't festooned with a hideous "body kit" and/or a stupid "boy racer" wing.

26. When left to their own devices, Japanese styling is "Tokyo-at-night" terrible. The bland exceptions to this rule are from Western collaborators. Thus, if we give the auto business over to the Japanese, we'll get more bland and hideous vehicles.

27. Safety. For example, Toyota trucks have been recalled for fatal steering, brake and airbag defects. Thousands have been killed in undersized, understructured Japanese cars over the years (just look at how some of them fold up like a cheap suit when crashed). Toyota has been sued over the defective seat belts and deadly door latches of its Corolla models. And this is just the tip of the safety iceberg.

28. Repair costs. When they do break down (and they're machines, they all do -- have you ever seen a Japanese traitor/invader dealership without a service department?), Japanese cars are horrendously expensive to repair. One study found that building a typical $20,000 Japanese car out of replacement parts would cost $60,000 (excluding labor, of course). And when was the last time you saw a 20+ year old Japanese car still on the road?

There's probably about 500 more reasons NEVER TO BUY FROM A JAPANESE CAR MAKER!

Apr 01 03:12 PM

[nothanks:]

People like "Rick Newman" aren't really American citizens. You're only residents of the USA. You could be just as happy (or more so) in South America or China.

Please, just go. Move to China and enjoy your life but leave the rest of us alone.

My GM vehicles were assembled in Fort Wayne and Pontiac by Americans. Their components were made in the USA or Canada. All I have to do is keep them clean, fuel them every once in a while and change the oil. Dealership service is first rate.

The WSJ, FOX and the greater business press are anti-Detroit based on the obvious fact that they're anti-union and anti-working man. I can't help but wonder what's really behind your continuing jihad against American automakers other than perhaps you're on the payroll of their competitors.

Rick is "the enemy within".

Apr 01 03:22 PM

[Lewis Bucy:]

Rick, why are you so angry ? I sense this anger in your article ...did you have a bad experience at one of the domestic auto makers years ago? Times have changed... and I suggest you do your homework... Consumers Reports got caught last year ..stating one of the new Ford offerings was average ...we all found out lately they didn't even test it ...and just stated it based on "historical" info....they apoligized ..but hardly anyone noticed....

Apr 01 04:06 PM

[elcopone:]

Second, for all the "buy american" people out there, I'm assuming you also don't believe in free markets and capitalism as well. Oh wait, you do believe in that unless you have a self interest in the matter. Let me ask you, have you purchased a new TV lately? Did you buy American there? Why not? Do you own a watch? Did you buy American there too? The list goes on and on....

Fact of the matter is that most people buy the best product for them, period. This is clear by the 20-yr decline in American market share. GM assembles some cars in Mexico and Canada, while Honda and Toyota assemble some cars in the US. The parts from both come from all over the world. In today's global economy the lines between American and Not-American are so blurred that no matter how hard you try you are always supporting a foreign company in some way.

By the way, true the profits go back to the company's home country. However there is this thing called the stock market, where companies pay these things called dividends, to these people called shareholders. And yes, they pay the dividend to shareholders regardless of where they call home. So if you want some of Toyota's profits, you can have some. Even if you're a yankee.

Apr 01 04:39 PM

[Miken:]

Here's a another way to look at it.

Toyota sells 33.2% of their vehicles in North America, while employing 12.% of the people here.

GM sells 42.7% of their vehicles here and employs 47.7% of their people here.

Data from GM's latest 10-K and Toyota's latest 10-K.

To think that Toyota's value stream is the same as GM's for a car ASSEMBLED here is the same is dangerously naive. Particularly when you considered that there are obstructionist walls built around their home market.


On Apr 01 02:16 PM babyray wrote:

> 5 reasons not to buy a Honda or Toyota!
> 1. A majority of their operations & employees are in foriegn
> countries
> 2. 65% to 85 % of their parts are coming in from Japan. Yes that
> includes the southern assembly plants.
> 3.Niether company gave a dime to a Sept 11 charity. (GM gave 1 million
> and donated trucks).
> 4. American Companies quality rankings and plant effiency is equal
> to and at times surpasses the foriegn companies. (you wont hear that
> on FOX News).
> 5. Pearl Harbor.

Apr 01 04:52 PM

[Miken:]

Consumer Reports is not someone that I would take advice from. It is a small group of elitists that decide if it's a car that THEY like. They are led by David Champion who is from that hot bed of automotive excellence, England.

I would prefer to be guided by J.D. Powers. On the latest reliability survey in which Buick beat both Lexus and Toyota (and everybody else for that matter) over 40,000 owners gave their opinions. That means something to me.


On Apr 01 04:06 PM Lewis Bucy wrote:

> Rick, why are you so angry ? I sense this anger in your article
> ...did you have a bad experience at one of the domestic auto makers
> years ago? Times have changed... and I suggest you do your homework...
> Consumers Reports got caught last year ..stating one of the new Ford
> offerings was average ...we all found out lately they didn't even
> test it ...and just stated it based on "historical" info....they
> apoligized ..but hardly anyone noticed....

Apr 01 05:00 PM

[User 387220:]

My next vehicle would be nice to be a GM car but I bought their stock over the winter and if I lose my money, I will NEVER buy another GM car or truck. And as long as I'm alive, my son will never buy a GM car or truck either. The new CEO better think about the lost sales before he files for bankrupcy. In the retirement news from GM Rick Wagoner said he would not file for bankrupcy because of stock holders views thinking that if GM goes down, even in the short term, there will so many people upset with GM they will not buy a GM car again. You have one upset stock holder right here.

Apr 01 09:30 PM

[sawzall:]

This guy is just another GM basher, and I don't know why.
When China starts making cars in North America, will they be American cars too?
This guy should be out there looking for a job.

Apr 05 09:57 AM

[sawzall:]

Have you noticed other stocks? Better prepare to buy nothing.


On Apr 01 09:30 PM User 387220 wrote:

> My next vehicle would be nice to be a GM car but I bought their stock
> over the winter and if I lose my money, I will NEVER buy another
> GM car or truck. And as long as I'm alive, my son will never buy
> a GM car or truck either. The new CEO better think about the lost
> sales before he files for bankrupcy. In the retirement news from
> GM Rick Wagoner said he would not file for bankrupcy because of stock
> holders views thinking that if GM goes down, even in the short term,
> there will so many people upset with GM they will not buy a GM car
> again. You have one upset stock holder right here.

Apr 05 09:59 AM

[User 389740:]

I quit reading Cosumer Reports when they told people in 1984 to buy VW Diesel Rabbits.

When we needed them in the WW2 our GM & Ford plants made airplanes & jeeps and other equipment for the war.

Who's going to help us if we need manufacturing again?

Apr 06 11:48 AM

[captainchuk:]

I dislike it when people say, buy American simply because its American. Did people forget, that its unAmerican to buy American for that simple fact? Do people know that China has over a billion of dollars invested in the USA? Import and export, if your product is the best, you export it a lot. If your product is inferior, you will end up importing that a lot. It goes for everything, not just cars, but cheap items people buy from China or other countries as well.

Please do not call people bad, or unAmerican simply because they are expressing their freedom of purchase. If buying cars that aren't American(not to mention, there is no car that is 100% American) is bad, then shouldn't the government just ban imports?

Apr 06 06:12 PM

[geewhy:]

The notion that a Toyota made in the U.S. is "just as American" as a Buick made in Canada is inaccurate. You seem to only be taking into account the actual autoworkers at the factory. The back shop workers at Buick — the accountants, engineers, designers, etc. — are American workers and far more numerous than the line workers. When you buy a Toyota you're supporting back shop workers in Japan.

Seriously, do you do any research when you write this stuff? This is such a fundamental error that it's hard to take you seriously.

flintexpats.com

Apr 18 10:56 PM

[ussvwbeetle:]

I will never ever buy an american car. We got rid of three american cars and bought a VW Rabbit, never will we go back. It is a great car for under $20k. My aunt drove a rather primitve Ford Focus, let me tell you crappy! I love how people jump on the buy american bandwagon but don't have any unbiased proof that Imports hurt the Economy. Why are we trying to be a communist state with Only Buy American, while China loves our Buicks so much that they are the number one selling car? To bad everyone here will be having a piss fit if we buy an Import. I'd love to see one American car with 100% american content, what was that? Can't find one, so sad. The Rabbit has a 1% american content rate on it, so we supported the economy. The oil cap on my Beetle is made in the USA. The VW Jetta diesel (not hybrid) gets 41 Mpg while the classic diesel rabbit gets 54 Mpg, they own Toyota and Honda and Ford and etc. The quality battle is only a matter of whos bias to who. Remember, we are American by citizenship, German blood runsthrough my veins I don't know about you.

May 15 03:38 PM