Patriotism vs. Globalization in the Auto Industry

For many Americans, “Buy American” is a moral slogan (just as “Buy Canadian” is for many Canadians). But as this Wall Street Journal article points out, that advice is hard to follow, at least when it comes to cars (and, I suspect many other consumer goods that have many components): Mom, Apple Pie and…Toyota? (Only the first couple of paragraphs are available for free, unfortunately.)

Here are a couple of key paragraphs:

FEW SPORTS CARS have captured the nation’s imagination like the sleek Ford Mustang, a 21st-century reincarnation of an American classic. The Toyota Sienna minivan, by contrast, speaks to the utilitarian aesthetics of Japan: refined interiors, arm rests and lots and lots of cup holders.

Yet, by a crucial measure, the Sienna is far more American than the Mustang. Statistics from the National Highway Traffic Safety Administration that were publicized in “Auto Industry Update: 2006,” a presentation by Farmington Hills, Mich., research company CSM Worldwide, show only 65% of the content of a Ford Mustang comes from the U.S. or Canada. Ford Motor Co. buys the rest of the Mustang’s parts abroad. By contrast, the Sienna, sold by Japan’s Toyota Motor Corp., is assembled in Indiana with 90% local components.

The key tension here seems to be between the values of globalization (and the efficiency it brings) on one hand, and patriotism on the other. We can think about this from the points of view of 2 different decision-makers:

The Corporation: Does a company have an obligation to promote the interests of the country (or the citizens of the country) in which it is incorporated? Believers in the efficiency (or fairness) of free markets should presumably answer this question in the negative. Strictly speaking, if the social obligation of business is to provide a product that the market desires in order to return a profit to investors, then moves (investments, policies) driven by patriotism ought to be counted as optional (and driven, like corporate philanthropy, for example, by either altruism or strategic PR concerns). On the flip-side, those who acknowledge the limits of free markets can freely accept the idea that values other than profit-maximization (such as patriotism) ought to drive business decisions.

The Consumer: Does an individual consumer have an obligation to favour products in proportion to their national content? Those who favour a more simple-minded consumerism (and I say that without prejudice!) will assert that a product’s country of origin matters little, if at all. Such consumers merely want to know if the product is well-made, well-priced, and meets their needs. Other consumers will see their purchases as having a broader impact, and perhaps as a way of making a statement. Of course, this puts supporters of “Buy American” in the same philosophical camp as the traditional critics of free, globalized markets. Strange bedfellows indeed.

Relevant Books
How Americans Can Buy American: The Power of Consumer Patriotism (by Roger Simmermaker)
Exporting America : Why Corporate Greed Is Shipping American Jobs Overseas (by Lou Dobbs)
Outsourcing America: What’s Behind Our National Crisis And How We Can Reclaim American Jobs (by Ron Hira)

(Thanks to Dave Chandler for the pointer. You can sign up to receive Dave’s insightful weekly “Strategic CSR” newsletter by emailing him at

1 comment so far

  1. […] Toyota (#3) appeared in a blog entry on whether a company’s shareholders really “own” the company, as well as in an older blog entry about “Patriotism vs. Globalization in the Auto Industry”. […]

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