Democrats, Please Stop Using GM As An Example of ‘American Made’

In President Obama’s intro video, and in his remarks–actually anytime you hear Democrats self-congratulate about “saving the auto industry”–you hear about the GM bailout. You hear how Republicans wanted to let the company go under, and Democrats saved it.

Obama:

How could I not be — after all that we’ve achieved together? After the worst recession in 80 years, we fought our way back. We’ve seen deficits come down, 401(k)s recover, an auto industry set new records, unemployment reach eight-year lows, and our businesses create 15 million new jobs. (Applause.)

Here’s GM’s spin:

For the fourth consecutive year, Chevrolet, Buick, GMC and Cadillac vehicles are the leaders of the Made in America Automotive Index produced by American University’s Kogod School of Business.

The Buick Enclave, Chevrolet Traverse and GMC Acadia together tied for No. 1, while 17 other General Motors vehicles ranked in the Top 10.

Here’s the truth:

The Toyota Camry took the top spot this year, as 2014’s top vehicle — the Ford F-150 — fell below 75 percent in domestic-parts content with its 2015 model-year redesign. The Toyota Sienna, Honda Odyssey and Chevrolet Corvette return to the list alongside GM’s three-row crossovers: the Chevrolet Traverse, GMC Acadia and Buick Enclave. The Michigan-built SUVs were last on the AMI in 2013.

It’s not that automakers are slowing U.S. production. If anything, the opposite is true: Excluding heavy-duty trucks and commercial vehicles, automakers assemble 101 models in this country for the 2015 model year, from Chevrolet sedans to BMW SUVs. These cars combine for the vast majority of new-car sales, and U.S. production remains on the rise.

What is shrinking is the percent of overall domestic-parts content. Five years ago, 29 cars qualified for the American-Made Index. Today it’s fewer than 10. Consider the opposing paths of U.S. auto production versus so-called “homegrown” cars:

[Source: cars.com 2015 American Made Index]

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GM In China

GM was bailed out so it could outsource vehicle parts production overseas, and invest in Chinese-built cars.

For General Motors’ Buick brand, China is driving the best sales in its 112-year history, with America the outlier: Buick built and sold more than one million cars in China last year, compared with 223,000 here. So exporting the Envision, a Chinese award-winning sport utility vehicle, is a natural, considering America’s growing appetite for small crossovers, said Duncan Aldred, Buick’s vice president for sales.

That’s right. GM is building cars in China and exporting them to the United States.

Buick, desperate to fill the most glaring hole in its lineup, the compact crossover, will import the Envision.

And this month, Cadillac announced that it would export a plug-in hybrid version of its new CT6 flagship sedan from China, supplementing production of the standard version from its Detroit-Hamtramck plant.

The arrival of Chinese-made cars has surprised some people in the United States, particularly United Auto Workers leaders who objected to General Motors’ decision to begin selling the Buick Envision starting this July.

So, Democrats, all you did in bailing out GM was give their shareholders and creditors the shaft, to help hold on to some of the juiciest union jobs for a little while (and their massive pensions), without preserving the long-term job outlook. In other words: they picked winners and losers, and Toyota still outproduces GM on American soil, with less workers.

But with Trump, it can only get worse. In his “America First” plan, I expect that American companies will be penalized for moving production to China, while foreign companies will be rewarded for using foreign parts and less workers for assembly here in America.

As always, Adam Smith’s “invisible hand” is the best arbiter of who wins and loses in the economy. It doesn’t matter if the Democrats or Trumpocrats pick the winners. American consumers and workers will lose.

About the author

Steve Berman

The old Steve cared about money, prestige, and power. Then Christ found me. All at once things changed. But the Holy Spirit produces this kind of fruit in our lives: love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, and self-control. There is no law against these things!

I spent 30 years in business. Now I write and edit. But mostly I love. I have a wife and 2 kids and a dog and we live in a little house in central Georgia.

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