Ford Says It's Patriotic to Buy
A Mustang, but Sienna Is Made
In Indiana With More U.S. Parts
By JATHON SAPSFORD and NORIHIKO SHIROUZU
May 11, 2006; Page B1

Few sports cars have captured the nation's imagination like the sleek Ford Mustang, a 21st-century reincarnation of an American classic. The Toyota Sienna minivan, by contrast, speaks to the utilitarian aesthetics of Japan: refined interiors, arm rests and lots and lots of cup holders.

Yet, by a crucial measure, the Sienna is far more American than the Mustang. Statistics from the National Highway Traffic Safety Administration that were publicized in "Auto Industry Update: 2006," a presentation by Farmington Hills, Mich., research company CSM Worldwide, show only 65% of the content of a Ford Mustang comes from the U.S. or Canada. Ford Motor Co. buys the rest of the Mustang's parts abroad. By contrast, the Sienna, sold by Japan's Toyota Motor Corp., is assembled in Indiana with 90% local components.



There's more than a little irony in this, considering Ford has launched a campaign to regain its footing with an appeal to patriotism (catchphrase: "Red, White & Bold"). "Americans really do want to buy American brands," asserted Ford Executive Vice President Mark Fields in a recent speech. "We will compete vigorously to be America's car company."

As the Mustang shows, though, it's no longer easy to define what is American. For 20 years now, the dynamic car makers of Asia -- led by Toyota, Nissan Motor Co. and Honda Motor Co. -- have been pouring money into North America, investing in plants, suppliers and dealerships as well as design, testing and research centers. Their factories used to be derided as "transplants," foreign-owned plants just knocking together imported parts. Today, the Asian car makers are a fully functioning industry, big and powerful enough to challenge Detroit's claim to the heart of U.S. car manufacturing.

The result is a brewing public-relations war, with both sides wrapping themselves in the Stars and Stripes. Toyota, for example has been running commercials touting its contribution to the areas of the U.S. economy where it has built factories.

Next year, the staid Toyota Camry will undergo the ultimate rite of passage by entering the most prestigious circuits of the National Association of Stock Car Racing. Toyota President Katsuaki Watanabe said his company's vast network of dealerships saw the Nascar link as a crucial marketing tactic to raise Toyota's profile in the U.S. heartland. "Our dealers told us it was really important to do this," he says.

On Thursday, the Level Field Institute, a grass-roots organization founded by U.S. Big Three retirees, is scheduled to hold a news conference in Washington. Among the points the group is expected to make is its belief that comparing relative North American component content is an ineffective way to determine who is "more American" among auto makers. A better way, says Jim Doyle who heads Level Field, is to look at the number of jobs -- from research and development to manufacturing to retailing -- each auto maker creates per car sold in the U.S.

Mr. Doyle says the institute's study shows that Toyota in 2005 employed roughly three times more U.S. workers, on a basis of per car sold in the U.S., than Hyundai Motor Co. Each of the Big Three manufacturers in the same year employed roughly three times as many U.S. workers, on a per-car-sold basis, as Toyota. "What's better for the American economy?" Mr. Doyle asks. A GM car "built in Mexico with 147,000 jobs back here in America or a Honda built in Alabama with 4,000 or 5,000 jobs in America?"

Measuring local content is extremely difficult because a part made in America can be assembled from smaller parts, some of which might come from abroad. All of which underscores how the line between what is and isn't American, at least in the auto industry, is "going to be increasingly difficult to pinpoint" as car makers become increasingly international and produce more in local markets, says Michael Robinet, a vice president at CSM Worldwide.

General Motors Corp. is importing Korean-made cars to sell under the Chevy nameplate. Japanese car makers are using American designers for cars being sold in China. Some of the high end luxury BMW "imports" on the road are made in South Carolina. "We don't look at it as an American industry," says Mr. Robinet. "It really is a global industry."

That said, the Japanese manufacturing presence in the U.S. is growing. Foreign-based auto makers in the U.S., led by the Japanese, account for 1.7% of U.S. manufacturing jobs, according to a report by the Center for Automotive Research, Ann Arbor, Mich. After $28 billion in cumulative North America investment -- and annual purchases of parts reaching $45 billion or more in recent years -- 67% of the Japanese-brand cars now sold in North America are made in North America, according to the Japan Automobile Manufacturers Association.

Japanese investment in U.S. production was a response to the trade tensions of the 1990s, when tensions flared over Japan's surplus with the U.S., of which autos and auto parts were a large portion. By spreading investment across the U.S., Japan's car makers have won crucial allies among U.S. politicians. Last year, when President Bush took to the road to tout his Social Security plan, one of his first stops was a major Nissan plant in Canton, Miss., a conservative corner of the country where the phrase "buy American" no longer means what it once did.

"As the son of a union member, I'll admit that free trade is an issue with which I've struggled," says Republican Sen. Trent Lott of Mississippi, who has a Nissan Titan pickup truck in his garage. But he adds: "Remember that every Nissan built in Canton also was engineered by Americans, for Americans."

What isn't clear is how Mustang fans like Fred Barkley, president of the Bluegrass Mustang Club of Lexington, Ky., would react to the news that the Mustang is only 65% American, at least by one government measure. Mr. Barkley, owner of three Mustangs, one from 1965 and two from the early 1990s, says it "doesn't bother me too much." Told the Toyota Sienna has higher North American content than the Mustang, he is unimpressed. "I wouldn't buy a Sienna," he says. "I don't like them because they are foreign."

WASHINGTON -- A new call to buy "Buy American" rang out Thursday as a Ford Motor Co.-backed group launched an ad campaign designed to convince U.S. consumers to support the struggling domestic auto industry.

The campaign levels a direct shot at Asian automakers, which have been spending millions of dollars touting their positive impact on America's economy and its communities in recent ads.

The new television, print and Internet ads declare, "What you drive, drives America," and contend the Big Three play a far more important role in the U.S. economy than Toyota Motor Corp. and Honda Motor Co.

"Seems like every automaker these days claims their cars are 'Made in America.' But the truth is, U.S. automakers still employ 8 out of every 10 autoworkers. Four times more than all the automakers from Japan, Korea and Europe combined," says one ad delivered by an actor resembling an archetypical burly autoworker.

The television ads will run mostly in Washington, D.C., and Metro Detroit.

The $1 million campaign is being organized by the Level Field Institute, a group founded by retired Ford, GM and Chrysler workers. The group wouldn't identify which companies have funded the effort, but Ford spokesman Mike Moran confirmed the Dearborn automaker had provided financial support for the group. GM and Chrysler have not provided any financing, but support the effort.

"I'm a little offended with Toyota's 'We're American' campaign," said Jason Vines, head of communications for the Chrysler Group. "They're not. They are a Japanese car company. Baseball, hot dogs and Toyota? Sorry, it doesn't ring a bell."

Moving to reverse losses, Detroit automakers are undertaking major downsizing moves. At GM and Ford that includes 60,000 planned job cuts and more than 20 plant closings across North America.

The campaign argues that even with the cuts, Ford, GM and Chrysler still employ far more U.S. workers.

The Level Field group estimated that 400,000 U.S. autoworkers support about 4 million other jobs, compared with about 860,000 jobs from Asian automakers.

Ford, for example, will directly employ 110,000 people in the United States versus 103,000 for foreign automakers.

"Our increasingly global economy makes defining 'Made in America' more difficult. But we believe it still matters," said Jim Doyle, president of the Level Field Institute.

Gerald Meyers, a former chairman of Detroit-based American Motors Corp. and business professor at the University of Michigan, said the campaign likely won't convince people to buy American.

The problem, he said, is how do consumers buy a truly American car, when a GM vehicle might be assembled in Mexico and a Honda in Ohio.

"Where a car is built is a very fuzzy thing," Meyers said. "At one point, Joe Sixpack had to drive an American car. That's simply diminished today. People with a scintilla of sophistication will just buy what fits their lifestyle."

Chrysler's Vines said the heritage of a company still matters, even in a global economy.

"We have to earn the trust of the American people. We sure hope that Americans are looking at us when they look to buy a new car, but it's our job to sell them the car," he said. "Hey look at the home team a little bit. We are providing a lot of jobs."

Tim MacCarthy, president and CEO of the Association of International Automobile Manufacturers -- the lobbying group that represents Toyota, Honda and Nissan Motor Co. among other companies -- called the group "the flat earth society."

President Bush "said it best when he said they should build relevant vehicles," he said. "Lee Iacocca was right when he said if we want to sell in America, we should build here and we took him at his word. Over 60 percent of the vehicles we build are made here and that number is increasing."

The combined U.S. market share of GM, Ford and Chrysler has fallen to a new low of 55 percent this year.

President Bush is to meet with the CEOs of Detroit's automakers Thursday at the White House, likely a day before the U.S. House is set to vote on a bill to eventually raise fuel economy standards for passenger cars.

MacCarthy said the international automakers are stepping up their lobbying and communication to let people know how much they provide to the U.S. economy. "We're out telling our own story, we're not out to badmouth GM, Ford and Chrysler."

Martha Voss, a Toyota spokeswoman, didn't offer much comment on the campaign but took exception to some of the group's figures.

"We admire the traditional American auto companies and what they stand for. They are the big guys. We would certainly never take away from that," Voss said. But she said the company is proud of the 30,000 people who work for the company in the United States and plans to add to that figure.