What Is a "Foreign Made" Car?

Click for audio What Is a "Foreign Made" Car?

Old economic myths never die; they just go to Flint, Michigan to retire.

Take the myth of the "American-made" car. A sign in one union headquarters parking lot in Flint says that any non-American made cars will be towed at the owner’s expense. The parking lot at Flint City Hall has a similar policy.

But what is an American-made car? General Motors and Ford are American companies, but they build at least 13 car and truck models outside the United States, including the Cadillac Catera, which is built in Germany.

America is also home to foreign automakers, including Honda, Mercedes, and Toyota, which sell many models built in California by UAW members, including the popular Corolla sedan and Tacoma truck.

So-called "foreign-made" vehicles are actually made mostly of American parts and assembled here. Their domestic part content is 69 percent, only slightly less than the 78 percent domestic content of cars sold by the Big Three.

Michiganians enjoy their high standard of living because free trade allows them to buy high-quality goods at the lowest price, regardless of where they are produced. In the global economy, Flint’s efforts to restrict parking of so-called foreign cars are as outdated as the horse and buggy.

For the Mackinac Center, this is Catherine Martin.