BUYING AMERICAN! Does Patriotic Sentiment Make Sense To Spur U.S. Economy, in 2009?
WITH TODAY'S GLOBAL MARKETS FOR U.S. PRODUCTS, A PROTECTIONIST STANCE MIGHT ACTUALLY HURT THE ECONOMY AND STALL RECOVERY!
When I was a guy in High School, and was thinking about my very first car, my dad insisted I would "Buy American!"
True, we didn't have the plethora of car choices that we have today that we had back in '74! But then, it really stuck! Most of my friends owned a Chevy, a Ford, or a Plymouth! Only one friend had an imported car - a VW Beetle, and many snickered at his choice. He was a nerd, an "egghead," we would muse!
During times of economic downturn in the 1980's, U.S. Autoworkers would actually take sledgehammers to Toyota cars, saying those who purchased imported vehicles were hurting the domestic economy.
Times sure have changed today, however.
In an article in today's Chicago Tribune, Reporter Wailin Wong pointed to a quote from new General Motors Chief Executive Fritz Henderson, when asked if President Obama should suggest drivers purchase American cars, the new CEO said "NO!" On Meet The Press via NBC last Sunday, he continued, "it's our job to make sure we provide (what excites drivers), not necessarily have it mandated or otherwise encouraged."
Quite a turnabout in attitude in just over 1/4 century, yes?
At this time of deep economic recession, you might think that encouraging American consumers to buy only domestically-produced products and services would be in vogue. But in today's global market, with U.S. Products being sold around the world, and domestic companies forming business partnerships with a wide range of international companies, acting provincially could hurt our economy, rather than help it.
In the auto industry, major foreign manufacturers like Nissan, Honda, and Toyota, have an extensive network of production and parts facilities across the U.S. Chrysler Corporation, one of the Big Three U.S. Automakers, had ties to German Automaker Daimler Benz for many years, and now the third-largest U.S. Automaker is seeking an alliance with Fiat Motors, in Italy.
And business alliances go beyond the auto industry. Nationally-known chains, such as Meier Stores, Trader Joe's, and Ikea are foreign owned. MN-Based Furniture Retailer Room & Board contends that 85% of its products are made in the U.S. by domestic crafts people, but it is one of the few retail companies touting this domestic sourcing.
Even products built largely with foreign parts create a bigger profit for the U.S. Company who created and sells it. In 2007, according to researchers at the University of California-Irvine, an analysis of the parts that make up the Apple IPod MP3 Player generated a gross profit of about $80-per-IPod sold to U.S. Based Apple Computers. That profit-per-unit is more than that made by any of the manufacturers of the individual parts that make up the IPod.
Read more in Wong's story.
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