Frank DuBois compares tracing the origins of car components to using a DNA ancestry test. “If we dipped a Q-tip into a vehicle’s engine oil, we might find that the metal is Canadian, but the copper in the wiring is from Chile,” he explains. “Maybe the tires came from Asia, or maybe they came from a Michelin plant in South Carolina. We don’t know unless we get down on our hands and knees and look at where the tire was made. And that’s the kind of geeky stuff I like to do.”
DuBois, a professor of international business at the Kogod School of Business, just released his seventh annual Made in America Auto Index, a guide that helps consumers determine how “American” a car really is by evaluating and ranking more than 500 models. Using criteria like the location of the auto maker’s headquarters, where the car was assembled, and who manufactured the engine, vehicles are ranked on a point system to determine the percentage of the car that is American-made.
DuBois was inspired to make the Auto Index as an alternative to many other indices that rely primarily on the American Automobile Labeling Act (AALA), a law passed in 1992 requiring automakers to list where their cars and car parts are made. “The problem with the AALA number is that it only measures the percent of US and Canadian content, and it doesn’t differentiate between them,” he explains. “It does not take into account country of manufacture, location of engine and transmission manufacture, ownership of company, labor, and so on. It is a very imprecise measure of domestic content.”
Despite his evaluation framework, DuBois says that determining the “Americanness” of a car is more of a philosophical question—automobile components are manufactured around the world, and record keeping is not always correct or complete. So a car’s country of origin really boils down to perception. “A five-liter Ford Mustang’s got a manual transmission from China,” he points out. “A Ford EcoSport? It was assembled in India with a US engine and a Mexican transmission. Toyota Corolla claims to be the most American car, but it may not be the most American car if you look at it from another angle.”
The globalization of automobile manufacturing has been a given for some time, but the percentage of US/Canadian content in typically “American” cars has continued to fall. According to the National Highway Traffic Safety Administration, in 2007, 75 percent of the components in a General Motors Cadillac CTS were US/Canadian-made, dropping to 65 percent in 2013 and 54 percent in 2017. In DuBois’s Auto Index, 82.5 percent of the Cadillac CTS was comprised of domestic components in 2013 and dropped to 59 percent by 2019.
Paradoxically, while the percentage of American content in cars has been decreasing, the number of Americans directly employed by the automotive parts manufacturing industry has risen—from 734,000 in 2012 to more than 871,000 in 2017. Much of this is due to the increased presence of foreign automakers, who are now making more cars and trucks in the US than General Motors, Ford, and all other American companies.
Southern US states are seeing the most growth in the auto manufacturing sector. Out of the 15 states that saw auto manufacturing job growth since the early 2000s, six were in the South, with Alabama in the lead. While Detroit lost over 125,000 auto manufacturing jobs from 2001 to 2018, Alabama gained over 25,000.
Although many states have seen the increase in jobs as a boon, the globalization of auto parts manufacturing has forced American workers to compete with cheaper suppliers in Mexico and Asia, causing not only a decrease in wages but in safety standards, as well. While the safety record at Southern car factories is “generally good,” the situation at parts suppliers is much more dire. Few Southern plants are unionized, and workers earn about 70¢ for every dollar earned by auto parts workers in Michigan. In 2015, auto parts plant workers in Alabama were twice as likely to lose a finger or limb as the national industry average.
Almost 80 percent of American consumers say they prefer to buy American-made products, often out of a desire to support the US economy and its workers, but many see “American” cars as less reliable and less satisfying to own. Although President Trump beseeched consumers to buy American products—particularly cars—his rhetoric has had no effect on Americans’ purchasing habits. Despite 70 percent of Americans supporting the idea of buying more American-made goods, 67 percent purchase whatever is cheaper, regardless of where it’s made. And since American auto parts manufacturers can’t build enough domestically to meet auto makers’ demands, auto makers will continue to import many of their components from abroad, which might hit American consumers in their wallets if Trump’s threatened auto tariffs come to fruition.
The globalization of car manufacturing poses tricky questions for consumers hoping to “buy American.” Auto manufacturing accounts for 3 percent of the US’s gross domestic product and supports—directly or indirectly—5.1 percent of US private-sector employment, so the choices consumers make have a direct impact on the US economy and its workers. That’s why DuBois thinks it’s so important to arm them with the most accurate information. “My objective in all this is to give the consumer more information,” DuBois says. “The goal of this Auto Index is to help the buyer become more knowledgeable about purchases and understand the impact that these purchases have on the US economy.”