There is a bitter dispute, in the auto world, about “buying American” versus “buying imports.” So we need to take a close look at exactly what an “American”  corporation is and what a “foreign” corporation is. On  one side of the dispute are the super patriot flag wavers. To them an “American” company is a company with a recognized name that they grew up with. Read Ford, GM, Chrysler.

But go to a Ford, GM, or Chrysler auto plant. What do you see? You see machines made in Germany, France, Italy. You see cars being assembled with components made in China, Taiwan, Mexico. You may see a Plant Manager or an engineer that talks funny because he is not from America. You may see fork trucks running around with “Toyota” on the label.

The super patriots say, yeh, o.k., but at least the profits stay right here in America. Not so fast. During the heyday of Detroit, when billions were rolling in, how much of it stayed in America? I cannot tell you to the penny. What I can tell you is all three auto companies spent billions in foreign countries building plants so they could abandon the American worker and exploit low cost foreign labor. They set up foreign plants manufacturing components and vehicles, and brought them to this country to deceive people that they were buying “American” products because they had American names.

Who owns these “American” companys? Do rich guys who live in big mansions on a lake somewhere, like Henry Ford and Andrew Carnegie used to, own these companies? No. Corporations today are multi national giants, owned by stock holders, mutual funds, hedge funds, etc. So people in Japan, France, or Brazil may own as much of what used to be an “American” company as people who live in the U.S. Stocks are traded like baseball cards. The “owners” of Ford yesterday are not the same as the “owners” today or tomorrow. So where do the dividends of these “American” companies go? France, Germany, Japan, or wherever the owners live. So is there a neat economic model showing that companies with American names, that USED to be exclusively in this country, provide jobs here and retain profits here. No, there is not.

Now let us take a look at “foreign” car companies. Go to a Honda, Toyota, or VW auto plant. What do you see? You see machines made in Germany, France, England. You may see fork trucks with an American name on the side. You will see mostly American supervisors. You will see American workers assembling components made in China, Japan, Taiwan, and Mexico. Who owns these “foreign” car companies? Some rich guy living in a mansion by a lake in Japan?

No. These, like all multinationals, are owned by stockholders, mutual funds, hedge funds from the United States, France, Japan, and countries all over the world.  The “owners” trade stocks like baseball cards. The “owners” today will not be the same owners tomorrow. An “owner” may only be an “owner” for two hours, until the stock price reaches his price goal, and he sells to some other “owner.” Where do the dividends go from these “foreign” car companies.

A fair chunk of them go to American pensioners whose mutual funds and pension funds own the stocks. Ironically, the United Auto Worker pension fund has a lot of “foreign” auto stocks in the portfolio, and dividends from these “foreign” car companies, so hated by the UAW, go toward paying the pensions of retired U.S. auto workers.

How about the “profits”? Do they go back to the country of origin? Yes, some of the profits do. But billions have gone into American communites in the form of paychecks in areas where “foreign” auto plants are located. Not to mention the billions that were invested here to build the plants, employing construction workers, road crews,  purchasing American concrete, steel, copper wire, and all the other materials that go into building an auto plant, and paying taxes to the communities.

So what is an “American” company, and what is a “foreign” company? These terms have little meaning in the real world of the 21st century. Multinational corporations, regardless of where they originated, or where they are headquartered, roam the planet like predatory vultures, searching for the lowest cost production areas. They want to sell their wares in countries with the highest standard of living, because they have the biggest markets and command the highest price.

Are any of these multinationals loyal to any particular country? No they are not. Ford will move production offshore at the first sign of a lower cost structure. Toyota will do the same. Both will try to sell in the United States, because that is where the money is. If you think that a company will be loyal to you because you are loyal to them, you live in a dream world. Buy the car that best fits your needs and wallet, no matter what name is on the dashboard. You are a fool if you don’t.