Detroit Waves Flag That No Longer Flies

In July, Toyota slipped past Ford Motor Co. to become the second-biggest new-vehicle seller in the United States. Toyota has three U.S. manufacturing plants.
In July, Toyota slipped past Ford Motor Co. to become the second-biggest new-vehicle seller in the United States. Toyota has three U.S. manufacturing plants. (By Justin Sullivan -- Getty Images)

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By Sholnn Freeman
Washington Post Staff Writer
Saturday, August 19, 2006

Sen. Lamar Alexander has backed a measure to outlaw burning of the American flag and supported a move to recognize English as the national language. He also takes what he calls a pro-American stance on issues related to the U.S. auto industry, but his view doesn't sit well in Detroit.

Alexander believes that for the sake of jobs and economic growth, Detroit's automakers have no choice but to embrace the forces of globalization. His view, echoed by many of his congressional colleagues, reflects a growing acceptance of the swelling numbers of Japanese, German and Korean autos built and sold in the United States.

Foreign-based automakers employ 101,000 people, according to the Association of International Automobile Manufacturers, a District-based lobbying group for the overseas automakers. In the next three years, these manufacturers will invest $9 billion in new factories, adding 9,000 more jobs.

This growth helps explain why scarcely a murmur of discontent has been raised -- outside of Michigan -- over a potential alliance between General Motors Corp. and two foreign automakers, Nissan Motor Co. of Japan and Renault SA of France. It also provides insight into why Congress has resisted pleas from Detroit's Big Three to turn their high labor and health-care costs into a national priority.

"There's a new definition of the American auto industry," said Alexander, a Republican from Tennessee. "Twenty-five years ago, it was the Big Three companies in Detroit. Now the definition is any company that makes a substantial number of cars and trucks in the U.S. and has a big payroll here, pays big taxes here and buys supplies here."

Supporters of Detroit's automakers say the changing view is partly the result of partisan politics, but others say U.S. sentiment has shifted gradually in line with the realities of the global auto market. Today, Chrysler is part of a German company. Nissan is constructing a new North American headquarters in Tennessee, where it already has a car assembly plant. Alabama is home to major manufacturing facilities of Mercedes-Benz, Honda Motor Co. and Hyundai Motor Co. In all, foreign manufacturers operate 16 assembly plants on American soil, with a 17th opening soon, compared with 48 run by U.S. automakers.

"When you have imported cars with such a ubiquitous presence -- and many of them made in the U.S. now -- it makes this a far less sensitive issue for many Americans," said Harley Shaiken, a labor economics professor at the University of California at Berkeley.

While foreign-owned plants have sprouted in many parts of the country, most have chosen to set up in the nonunionized South. Alexander said that with their wide-ranging operations in the United States, the foreign automakers have altered the political game book.

"Nissan has great support because of its new plant in Canton," Mississippi, he said. "Kentuckians are proud of Toyota because they are in Lexington. Ohioans like Honda. And South Carolinians are proud of BMW because it has a plant there."

Senators whose states have attracted foreign auto plants -- and jobs -- not surprisingly are proponents of globalizing the U.S. market. Sen. Richard C. Shelby (R-Ala.) said Detroit automakers need to revamp their business model.

"The way they do business has to change or they won't be around," Shelby said. "The competition has been brought to our shores. We learn from each other. There is a lot that our automobile manufacturers can learn in the world."

The Detroit automakers, however, contend that the pressure from overseas should raise alarms in Washington. The U.S. companies, struggling to revive their fortunes by slashing costs, benefits and payrolls, are troubled by what they perceive as an unsympathetic ear from Congress and the White House. They say the lack of a U.S. auto policy is putting them at a disadvantage to their fast-rising foreign rivals.


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© 2006 The Washington Post Company

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