The Value of Domestic Manufacturing
Are we thinking rightly when making business decisions about purchases? Back in our May 2007 editorial, we made the case that buying domestically manufactured vehicles supports our industry because local heat treaters – captive or commercial – are positively affected. Obviously, this applies to goods and services other than vehicles, but it’s a good place to start.
Where do you start if you are looking to purchase domestically manufactured vehicles? A recently released annual report from the Kogod School of Business at American University can help with this challenge, but it may contain some surprising facts (for some of us). Looking at total domestic content, the top 11 models are made by General Motors. The top tier is 87.5% domestic content, and it includes the Buick Enclave, GMC Acadia, Cadillac CTS (Coupe) and the Corvette and Traverse from Chevrolet.
If you want your next vehicle to contain about 80% domestic content (rounding up), six Ford models are added as well as two Jeeps (from Chrysler). Falling in right behind the Jeep models, however, is the Honda Odyssey, the Toyota Camry and the Toyota Sienna at 78.5%. If you are curious where your car falls or want to choose your next vehicle based on these numbers, we encourage you to research the Kogod Made in America Auto Index.
In that same May 2007 editorial, we also referenced a survey indicating that 61% of Americans prefer to buy domestic. With that many folks wanting to buy domestic cars, we provided a quick way to get a sense of the domestic content if you don’t have access to a window sticker, particularly on a used car – the VIN number. The first number of a “1” indicates the car is made in the U.S. with more than 75% domestic content. Numbers of “2” or “3” indicate cars made in Canada and Mexico, respectively, with more than 75% domestic content. VINs starting with a “4” or “5” are made in the U.S. with less than 75% or 45% domestic content, respectively. If the VIN does not start with a number, it is not made in North America.
Dan DiMicco, the former CEO and chairman emeritus of Nucor, has a new book titled American Made: Why Making Things Will Return Us to Greatness. The book points out some interesting facts about domestic production.
- The difference between a 2% GDP rise (approximately our current) and 4% over the next 10 years is $3 trillion in economic activity.
- We’ve never had free trade. At best, we have managed trade. At worst, we have predatory and protectionist countries unfairly exploiting our belief in free trade to their advantage.
- You create twice as many jobs in this country and 10 times as much economic growth by using domestically produced gas here as opposed to exporting it.
- Create jobs for the skills people have and quit bemoaning the skills they allegedly don’t.
- You cannot reap the real benefits of innovation if you leave the making and the building to other countries.
- U.S. leaders should work together on promoting government policy that returns to the fundamentals of being a nation that innovates, makes and builds things.
In our December 2013 editorial, we discussed the concept of regional manufacturing, which is producing products in the markets in which they are going to be sold. Check out that editorial in our archives to learn more about “recovering our creative calling.”
In line with our encouragement to buy local and support local industries, we located a website called StillMadeinUSA.com. It is an interesting resource for finding goods that are produced domestically. The site contains 13 category breakdowns, including tools, yard/garden and appliances. If you are in the market for these things and many others, check out the website to be directed to things that are still made in the good old U.S. of A, and we will support onshore production and re-shoring efforts in the process.