Buy American- What Does That Mean?

July 13, 2015

Industry Week Reports that “Ford Plans Move for Compact Car Production Out of US.” What exactly does “Buy American” mean these days?

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In 2009 , While two of the three  bankrupt thinking Detroit firms were using the government to bully their way through Bankruptcy, running roughshod on their suppliers and creditors, I wrote a piece about “The New Domestics.”

Here are a few points that I made in that article:

  • More than 70 percent of the value added in a new car is provided by the suppliers, not the assemblers;
  • More than 300 companies have created jobs in Ohio as a result of the state’s “New Domestic” auto industry;
  • Honda has plants or major operations in Alabama, California, Connecticut, Colorado, Georgia, Indiana, Iowa, Michigan, New Jersey, North Carolina, Ohio, South Carolina, Tennessee and Texas.
  • Mercedes has a plant in Alabama too.
  • And BMW has a plant in South Carolina.
  • Volkswagen has broken ground for an assembly facility in Chattanooga, Tennessee. (It’s been making cars since 2011, employs 2000 people)

So what is an American Car?

  • One made by my friends and neighbors;
  • Made from materials and parts purchased locally;
  • One that the first digit of the VIN is a “1”;
  • One that has more than 50% “domestic content;”

Want to know more about American Cars in 2015?

The MOST AMERICAN CARS

What is the US’s leading auto exported abroad?

Surprise Answer

Industry Week Article

Thanks to Draplin Design for the neat graphic.

Camry Photo

Postscript- Not to diminish the role of Canadian Manufacturers- nor their vehicle assembly plants.  PMPA members in Canada produce high volumes of high technology systems parts for the automotive markets- fuel injectors, anti-lock brake parts,  fluid power system components and much, much more. But the irony of the whole Ford “Wrap ourselves in the flag while we really export your jobs” marketing  is really the “driver” behind this post.

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What The Data Says

February 17, 2010
Lessons from  the Japanese:  Monozukuri, Quality, Cost Cutting, and the Risk of Recall.

In this case, up is "Not good."

Graphic credit.

Recalls on products sold in Japan (excluding cars, food and drugs) are up more than 80% from three years earlier, according to a Wall Street Journal report credited above.

It’s not just Toyota.

It’s not just Cars.

Is it the relentless pursuit of cost cutting?

Is it the reduction in part count (sku reduction)? As a component is used across many products, increasing scale and  so reducing price per piece,  this also  increases the scope and scale of a recall if the design or manufacture is defective.

It’s not just Japan.

Ford recalls 2007-2010: 15.505  million vehicles according to my analysis of the data here. See our post from October 21 2009 here.

Where was Congress when Ford announced these huge recalls?

GM recalled 1.5 million of its vehicles last year.

Did Congress weigh in? (I mean, besides bailing them out with lots of our tax dollars.)

Why is Congress suddenly calling for hearings?

I think that OEM manufacturers and businessmen  EVERYWHERE, not just in JAPAN, have taken their eyes off the ball of continuous improvement in their manufacturing processes.  They have been distracted by the fleeting flash of lower prices.

Continuous reduction in ‘costs’ is not the same as paying  continuous attention to Quality. And when you take your eye off the Quality ball, it  really shows up when you have a near perfect record.

Cultural footnote: This summer, I spoke with managers at Japanese auto companies who told me that MONOZUKURI is about ‘the existential joys of making things.’  Of ‘implementing a process that realizes a design to product.’  This was a really big deal. It was their long and storied tradition. It’s their national heritage, and they are “sharing it with the world.”

 I’m starting to  think that MONOZUKURI is really more about mercantilist economics and economic nationalism

 And maybe 安価.  Or 失敗.

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