Autos: The Domestic Industry

Here some interesting “Quick Facts” from a feature of that name provided by the International Trade Administration of the U.S. Department of Commerce (link). These data give us a somewhat novel view of the U.S. Auto Industry. That phrase all too frequently evokes thoughts of GM, Ford, and Chrysler…

… but in actuality nearly half (45.6%) of the domestic auto industry is run by foreign companies operating on U.S. soil. They employ American labor and purchase American supplies. The percentages are based on cars, SUVs, and light trucks produced in 2010.  No. This second half of the domestic industry is not centered on Detroit. This listing (hope I have them all) shows that most plants are in the South.

BMW, Spartanburg, SC

Honda, Anna, OH

Honda, East Liberty, OH

Honda, Greensburg, IN

Honda, Lincoln, AL

Honda, Marysville, OH

Hyundai, Montgomery, AK

Kia, West Point, GA

Mercedes-Benz, Vance, AL

Nissan, Canton, MS

Nissan, Decherd, TN

Nissan, Smyrna, TN

Subaru, Lafayette, IN

Toyota, Blue Springs, MS

Toyota, Buffalo, WV

Toyota, Georgetown, KY

Toyota, Huntsville, AL

Toyota, Princeton, IN

Toyota, San Antonio, TX

Volkswagen, New Stanton, PA

Volkswagen, Chattanooga, TN

Something to keep in mind when the press talks about the U.S. auto industry.

Buying Some Cars, Not Buying Homes

Yesterday came news of jumping auto sales, all domestic producers scoring meaningful gains. To be sure, the same story also predicted that total auto sales this year will be significantly lower than last year. The percentage increases were large because we had sunk so low. This suggested that it might be good to look at two categories of private fixed investments over a longer period of time, thus from 1990 to the end of the second quarter of 2011, available from the Bureau of Economic Analysis (link); the table number is 5.3.3. The data I am showing are quantitative indices calculated by the BEA, with 2005 representing 100.

Expenditures began to plummet in the first quarter of 2006 already. Halfway through 2011, transportation equipment sales (largely autos, vans, and pickups) were still a long distance from the level in 1999. Expenditures on single family residences have stopped dropping but are not rising. The early onset of a slump in these indicators tells us that the public already, somehow, knew that something was amiss early in 2006—underlining for me the suspicion that we are possibly seeing a genuine sea-change. That vans and pickups lead sales recently reported, however, goes counter to that feeling. That certainly sounds like the same old, same old thoughtlessness.

A Hundred Years of Chevrolet

The actual anniversary will come on November 11, the day when auto-phenom William C. Durant (1861-1947) founded the company a hundred years ago. Durant also founded General Motors, by the way. He came from Boston, a high school drop-out, lumberyard hand, cigar peddler, carriage salesman. Durant got fired from General Motors when his efforts to purchase Ford in 1910 fell through because the banks would not back him. No matter. Durant founded Chevrolet in 1911. Within five years Chevrolet had produced sufficient profits so that Durant could acquire a controlling share in GM again. He got back in the saddle and brought Chevrolet back with him. So, in a sense (as I’ve always thought), Chevrolet is General Motors.

Now for that name. The name came from Louis Chevrolet (1878-1941), a Swiss immigrant to the United States, a famed race car driver. Chevrolet (the man) worked for Durant at Buick. They became friends. Louis was one of Chevrolet’s co-founders with Dr. Edwin R. Campbell (who was Durant’s son in law), and William H. Little, creator of the eponymous Little automobile. Louis and Bill Durant fell out in 1914—the dispute was about a car design. Durant bought Louis’ shares, but Louis left his name. Those were the days! That picture above, by the way, shows Louis Chevrolet, race driver, not Bill Durant, auto magnate; it comes from this GM site.

Chevrolet was also—my first car! I was born a Chevy, you might say, but married a Honda. Here she is, a 1952 Chevrolet Styline. My own looked very much as the car in this photograph. I bought it used while I was in Germany, in the Army—a truly splendid vehicle, lovely to look at, tight, swift, fast, roadworthy, all that a young man could wish for. I’d already sold it by the time Brigitte and I met, but borrowed it back so that we could drive it on our wedding day. (Alas, that was a practical, not a romantic business; we needed to pick up some documents many miles away; but it has become a romantic memory).

It’s been a good hundred years, Chevrolet, of which I’ve shared seventy five. The year I was born, Chevy turned twenty-five.