WASHINGTON, D.C.—The Washington Auto Show (open through Feb. 1) is different from the events in New York, Detroit or Los Angeles, and the difference is exactly what you’d expect. It’s not just about cars, but the politics and trade issues that go along with them.
The American auto industry is riding high, with 16.4 million sales in 2014, and it competes globally with what are increasingly called “world cars.” It's an up-and-down kind of thing: We just found out that Toyota is now the world’s sales leader, beating out General Motors and Volkswagen. U.S. sales are the key to making that happen. It’s a tale of two numbers: VW is lagging here, with sales that dropped 2.9 percent in 2014, but Toyota’s climbed 6.2 percent to 2.37 million.
Global Automakers CEO John Bozzella, with Congressman Jim Jordan behind him, and "a magnificent array of modern American cars," built in "the greatest market on Earth." (Photo: Jim Motavalli)
But don’t just think of Toyota as “a Japanese company.” Toyotas are increasingly made in the U.S. for domestic consumption, and the Camry even out U.S.-contents the Ford F-150 pickup. At a “Made Across America” rally near the Capitol, U.S. Representative Jim Jordan (R-OH), who drives a CR-V, was effusive in his praise of hometown manufacturer Honda.
Behind Jordan, what looked like a full parking lot was actually a display of nearly every car built in the U.S. (many of them Hyundais, Hondas and Subarus). A lot of cars built here go abroad: Nissan has exported nearly 1 million cars since it started making vehicles in the U.S. Nissan, by the way, has made a big commitment; the company has 22,000 U.S. employees, and a $1.1 billion annual American payroll. Nissan's Smyrna plant is the biggest car assembly facility in North America.
Don’t take the auto industry for granted, because we almost lost it. At a show-related Car Talks forum in the House office building, Sen. Gary Peters (D-MI) talked about the dark days of 2008, when then Chrysler CEO Bob Nardelli told him that “he was a few weeks away from liquidating Chrysler.” Imagine that — a giant-sized hole in the American economy where Chrysler used to be.
Ford's Ziad Ojakli spoke at the show about making the all-American Mustang competitive in global markets. (Photo: Jim Motavalli)
Mitt Romney, the once and possibly future presidential candidate, was fairly sanguine about this during the second campaign. In a 2008 New York Times op-ed piece titled “Let Detroit go Bankrupt,” he said, “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”
Well, Chrysler and GM got the bailout, and nobody’s kissing the auto industry goodbye. Chrysler, albeit with foreign ownership, is soaring, and all the Big Three are enjoying record years, with a 2.5 percent annual growth rate, according to a Center for Auto Research (CAR) presentation at the show. The bailout money has been paid back, and the economy benefits hugely.
What symbolized both the auto industry's resurgence and its increasingly global nature was a Cadillac press conference. New chief Johan De Nysschen, a South African who formerly headed Nissan luxury brand Infiniti, got up and extolled the virtues of the new 640-horsepower CTS-V. And he teased the all-new CT6, a big car with a fairly small footprint because of lightweighting. "The weather forecast for Cadillac has turned positive," he said. The agile line of new Cadillacs aren't exclusively American cars anymore, they compete with BMW and Mercedes on the world state. And that's why a bedrock American brand like Caddy is going to hire a guy with proven international experience, as comfortable in Tokyo and Stuttgart as in Tokyo. The CT6, he said, "symbolizes our ambitions."
These muscle cars from Detroit's hey day made a colorful display in Washington, but the real action today is cars that can be sold internationally. (Photo: Jim Motavalli)
According to former Missouri Gov. Matt Blunt, a Republican, “Over the past five years alone, Chrysler, Ford and General Motors have invested more than $28 billion in their U.S. assembly, engine and transmission plants, R&D labs, headquarters offices and other infrastructure that connects and supports them.”
The auto industry’s contribution to the economy is more than just auto plants benefiting Detroit, Chattanooga, Marysville, Ohio, and other cities. Think of auto plants as sharks, and the pilot fish following them are the suppliers and dealers that follow in their wake. The CAR study, according to researcher Kim Hill, said that for ever assembly line job another 6.6 support positions are created. Trust me, landing an auto plant is a big economic boost (far more than a sports stadium, but that’s another story).
The Washington show was fascinating, with press conferences that displayed a distinct “tell it to the Congressman” flavor on trade issues and other Capitol concerns. I attended a reception at the Global Automakers trade group (representing the U.S. divisions of 12 majors). Tucked in next to Tesla, the K Street building spoke to the clout of the auto industry, not just in the local communities where dealers sponsors the Little League, but on a national and international level.
Global Automakers says, “Today, our members operate 26 U.S. manufacturing facilities, produce over 40 percent of all motor vehicles built in America each year, and directly employ over 90,000 Americans. These companies are here for America." All told, CAR said, 332,000 Americans go to work making cars every day. They're glad carmaking didn't go overseas, along with many other U.S. manufacturing jobs.
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