Delphi, GM, and the UAW announced yesterday afternoon that they have reached a tentative agreement concerning wages & benefits for Delphi workers. I've only heard bits & pieces of the agreement, and have yet to look it over, but make no mistake - the troubles for GM, Delphi, and the UAW are far from being over. Considering that Dana Corporation, another automotive parts supplier, recently filed Chapter 11 demonstrates that domestic car parts suppliers are in as much trouble as the automakers. What is also apparent is that Dana did not have the same UAW pension/benefits burden as Delphi, and that is cause for concern.
Coincidentally, the following article was sent to me this morning, and I felt that it had to be passed on to the readers of this blog.
Is It Unpatriotic To Not Buy American Cars?
By Roger Simmermaker, Special to FCN OnlineAs I sat in an Orlando studio on Jan. 24 waiting to be interviewed on Fox News' "Hannity and Colmes" for the first time, that seemed to be the question I was going to be asked to answer if the introductory comments were any indication. In the studio in New York was Malcolm Bricklin, founder and CEO of Visionary Vehicles, who plans on importing cars from China by 2007. Ford had just announced plans to lay off 30,000 workers, and since even Mr. Bricklin (to his credit) says he doesn't want to see so many Americans join the ranks of the unemployed, it was a good question to ask. But the show started with asking Mr. Bricklin a different question and by the time the cameras pointed to me, I was given a different question as well, so I never really got to answer it.
But as I continue to think about it since that interview, the answer I would have given to Sean Hannity is the same as my answer today: If it's unpatriotic to destroy the American middle class, then it's unpatriotic to not buy American cars. As a country, we're drowning in a sea of red ink, and as consumers (those who really should know better, anyway) we're drowning is a sea of "what's in it for me."
Since President Bush has all but ruled out any government help for either Ford or GM saying they have to make a product that is "relevant" (did you know Mr. Bush himself owns a Ford pickup truck?) it's up to the American consumer to realize that a bankruptcy for Ford or GM or both is definitely not in the national interest. Not only would hundreds of thousands of workers lose their jobs, but about 450,000 retirees would be de-funded. These retirees on fixed incomes would see smaller pensions and reduced medical benefits. The workers that remained would see massive cuts in benefits as well.
Big deal, you say? At least American companies still offer their workers pensions. According to a recent article in The Tennessean, Nissan North America new hires won't be able to count on a company pension when they retire. And if you work for Nissan and didn't happen to reach the age of 65 by the end of last year, you won't be participating in the company-sponsored medical plan either.
If American companies can't remain successful and shoulder the burden of health care for their workers, the rest of us will likely pick up the tab in the form of higher taxes through expanded entitlement programs, which are already growing at a rate of 8 percent a year.
84% of all federal spending of our tax dollars already goes towards the "big three" untouchables: interest on the national debt, national defense (including homeland security) and entitlements such as Medicare, Medicaid and Social Security. So much for conservatives who wish for smaller government. Generally speaking, few of us want to invite more government intrusion into our lives. But a significantly smaller government these days would result in benefit cuts that would ultimately affect all of us. The days of those who want tax cuts because it means more money in their pockets and means benefit cuts only for someone else are over.
So what's your reason for not buying American cars and trucks? I've heard (and disproved) them all but I'll list a few of the more popular ones here:
1. Quality. According to the latest J.D. Power & Associates Long-term Dependability Survey, Lincoln, Buick and Cadillac all made the top five for 2005. Lexus was number one and number two was mysteriously not reported by the CNN story highlighting the survey. What's even better (if you are a fan of American automakers) is that the average dependability of all GM and Ford models combined was greater than the average dependability for all the Japanese models combined.
2. Too much emphasis on "gas guzzlers." The hypocrisy in this statement is rampant since most people who make it are ardent supporters of the "free market." The trouble for these hypocrites is that a major free market principle is the law of supply and demand. According to Seattle Times columnist Shaunti Feldhahn, consumer demand for big, bad SUVs has doubled in the last 15 years. So much for the argument that American car companies aren't building what consumers want to buy. Just like American companies have been scrambling to satisfy the one percent of car buyers who want hybrids, Japanese car makers have been scrambling to catch up to Ford and GM by offering bigger and badder behemoths (at even worse gas mileage ratings than American SUVs). GM has more models with over 30 mpg. highway (2006 EPA estimates) than any other auto maker. Last month I revealed that my 1996 Lincoln Town Car now has over 160,000 miles with no signs of letting up. What I didn't mention is that my car has averaged 24 mpg since September 2001, which is a result of combined mostly highway driving during the week and mostly city driving on weekends. Not bad for a big luxury car.
3. Foreign car companies will pick up the slack. This argument implies that the hiring of American workers by foreign companies would never take place if there weren't layoffs by American companies first. Even if you view foreign investment as a good thing -- which it isn't -- foreign companies will still invest in America even if we support American companies so they can actually retain our own workers. This argument is almost as bad as the one that implies we need to destroy American manufacturing jobs in general so we can move American workers into high-tech jobs. Why not let the college graduates strapped with tens of thousands of dollars in student loans and other debts take these jobs, and protect American workers in the jobs they choose to have now?
4. American companies can do better. Better at what? What will it take for more American people to root for the home team again? Do you only root for your hometown sports team when they are winning, or do you root for them even when they are down -- no matter what? Let's see. American companies GM and Ford have won numerous quality awards, they have more domestic plants, employ more American workers, support more retirees along with their dependants and families, pay better wages than the non-union foreign-owned plants, have a higher percentage of domestic parts in their automobiles, pay more taxes to the U.S. Treasury, give more to charities for the benefit of this country, and donate more in the wake of disasters like 9-11. Need I go on?
5. GM and Ford need to make cars Americans want to buy. I saved this one for last since it the most ridiculous statement of all. General Motors has the highest market share of any automobile company. To say the company that currently sells more cars and trucks to more people than any other company in the industry -- even if that market share is falling -- is truly ridiculous. Yes, I know Toyota is gaining on GM and may overtake them this year (in worldwide market share -- not U.S. market share -- where GM has roughly twice the market share of Toyota) and GM used to command around 50 percent of the domestic market. But let's be reasonable, shall we? What company in any industry in today's super-competitive economy can command 50 percent of their market? Not even Coke or Pepsi can do that. Which reminds me -- Pepsi recently passed Coke to take the top spot in the beverage wars. Is Coke number two now because they aren't making beverages Americans want to drink? I haven't heard that one yet. Only in America and only in the automobile industry could number two be declared a loser brand. And only if it's GM, not Toyota.
The struggle for GM and Ford to regain much needed and much deserved traction has increasingly become a media war. And it's not just a media war as I reported in my September 2005 article titled Media Bias Against American Automakers. The bias towards foreign automakers has extended from journalists and other newsmakers to everyday Americans with vendettas against their home-team companies in the form of letters to the editor and blogs on the Internet. The Wall Street Journal recently ran a story titled "Are Rumours Hurting Sales" reporting on a Los Angeles resident who started a Web log called "GM Can Do Better." It's not that this individual has not heard the reports of numerous quality awards bestowed upon American automakers. It's that he's skeptical the reports are true.
So there you have it. Foreign car lovers will believe it if Toyota wins an award. But if General Motors' Chevy Impala is documented to have fewer customer complaints than the Toyota Camry, foreign car lovers will grasp at different false reasons to justify their foreign purchases. But the facts are in and their arguments no longer hold water. I'd almost be willing to bet these American car bashers haven't test-driven an American car in years. Right now it doesn't matter that GM has 82 major plants in America and Ford has 35. What matters is that Toyota, Honda and Nissan have eight plants each. It doesn't matter that Toyota and Honda average 65 to 75 percent domestic parts in their U.S. built cars while GM and Ford average 80% to 85%. If these percentages ever reverse, then it will matter to foreign car lovers. Facts simply don't matter to them when they don't happen to be in their favor. To them, as Business Week reported Dec. 12, 2005, "the economy is unstoppable as the Indianapolis Colts" and foreign purchases have no national negative effect. If you watched the Super Bowl last Sunday you probably noticed that the Indianapolis Colts weren't playing.
I'm sure that this article will not sit well with those who automatically receive it as part of their free "Buy American Mention of the Week" subscription and advocate the demise of GM and Ford. And I'm also sure I'll receive many "unsubscribe" requests as a result. But I don't really care. I don't like writing for people I don't like any more than I like giving speeches to groups I don't like. These articles are not designed to make anyone feel less of an American for their past foreign purchases, but rather they aim to persuade American consumers to make the right purchases in the future.
Those who do agree with the facts and the opinions I have presented, I urge you to forward or distribute my auto industry articles to fellow Americans that need to see them. Simply visit www.overthehillcarpeople.com < http://www.overthehillcarpeople.com/> to see the auto industry articles I've written since May 2005. I'm not sure how much time GM and Ford have left to turn things around given the obstacles they must overcome that have been put there for bogus and unpatriotic reasons. And remember, the next time someone accuses you of questioning their patriotism because of their foreign car, tell them that if it's not unpatriotic to destroy the American middle class, then it's not unpatriotic to buy foreign cars!
Roger Simmermaker, author of How Americans Can Buy American: The Power of Consumer Patriotism, published this article on his Web site, www.howtobuyamerican.com <http://www.howtobuyamerican.com/>.
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