Most Americans, 78 percent, would rather buy an American product than an identical foreign-made one, according to a 2013 Consumer Reports survey. Some would even pay extra for the privilege of buying domestic, more than 80 percent would pay 10 percent more for American goods.
But are patriotic consumers getting what they pay for? When it comes to cars, maybe not. That’s been known for some time.
Since 1994, automakers have been required under the American Automobile Labeling Act to label their cars so consumers know what country the vehicle and its parts are made in. But these labels are misleading, according to a global supply chain management expert, Frank DuBois, an associate professor at American University’s Kogod School of Business.
For one thing, parts made in the USA and in Canada are lumped together on one label. It even confused Mitt Romney who touted his “American made” car in an ad targeting Michigan voters. Turns out Romney’s Chrysler 300 was made in Canada (Chrysler’s “imported from Detroit” ad campaign caused a stir prompting the Made in the USA Foundation to file a complaint with the Federal Trade Commission).
The AALA ranking system also allows automakers to “round up” from 70 to 100 percent to calculate domestic content. And cars with few USA-made parts can use labels from vehicles with higher U.S. content if they are part of the same car line.
So DuBois developed an alternative ranking system (the Kogod Made in America Auto Index) that includes information the AALA model doesn’t take into account. DuBois’ model scores cars on these seven data points:
- Profit Margin: location of the automaker’s global headquarters
- Labor: location of assembly
- Research & Development: location of R&D activities
- Transmission: location of production
- Inventory, Capital and Other Expenses: location of assembly
- Engine: location of production
- The AALA “Domestic Content” Score
And the award for Most American Car goes to: the Ford F-Series Pickup and Chevrolet Corvette, both of which scored 87.5 on a 100 point scale. The Buick Enclave, Chevrolet Traverse, GMC Acadia, and GMC Acadia Denali tied for second with 86 points.
You can see the complete list here.