Tuesday, August 22, 2006

Backing America

Thursday, August 10, 2006
Backing America
Auto execs rally for U.S. industry
David Shepardson / Detroit News Washington Bureau

TRAVERSE CITY -- American Axle & Manufacturing Inc. CEO Dick Dauch didn't sugarcoat his comments Wednesday as he spoke of the negativity gripping the U.S. auto industry.

He asked why we've stopped honoring American manufacturing. As for the notion that Japan's Nissan Motor Co. and France's Renault SA need to ride to General Motors Corp.'s rescue, he dismissed it as "garbage."

"We don't need to have the French owning America," said Dauch, a former GM executive.

As he ended his speech, an image of Uncle Sam on an old Army recruiting poster appeared on the giant screen behind him.

This week, as automotive leaders gather in Traverse City for the industry's annual Management Briefing Seminars, the gloom and doom enveloping Detroit may be Topic A. But Dauch and other prominent executives are sounding a call for patriotism, optimism and a belief in the future of the American auto industry.

Ford Motor Co.'s North American President Mark Fields spoke Wednesday about how Asian governments value and root for their domestic manufacturers, while Detroit's automakers often feel ignored by policymakers and bashed by the media.

"This dismissive portrayal of Detroit and the cynicism we sometimes have for the home team is like nothing I've ever seen before," said Fields, who previously ran Ford operations in Japan and Europe. "It's time to believe in ourselves again -- so that consumers around us can do the same.

"The health of the U.S. auto industry needs to be important to everyone -- even if you don't work for a U.S. auto company or drive an American car."

The executives' rallying efforts come as the U.S. auto industry struggles through one of its most severe crises, with Detroit's Big Three shuttering factories, laying off workers and shifting supply work overseas.

Dauch said the number of auto suppliers has dropped from 30,000 in 1990 to 10,000 today and is expected to drop to less than 4,000 by 2010.

"It is like ships passing in the night. North American suppliers are establishing locations outside their home base to maintain business with their current customer base. Non-U.S. suppliers are coming to North America to support the new domestics," Dauch said.

He ended his talk on a grim note:

"I hope to see the survivors back here in Traverse City next year."

Detroit executives are pounding home the message that investments made by their companies are critical to the U.S. economy.

Fields noted that the Big Three have invested $39 billion in the United States over the past four years -- more than all the foreign automakers have spent here in the past 25 years.

Chrysler Group Chief Operating Officer Eric Ridenour echoed Fields, saying the company had recently invested $2.2 billion in southeast Michigan.

In May, Ford began funding a public relations campaign designed to emphasize the economic impact of the domestic industry through group called the Level Field Initiative.

The claims are largely in response to advertising by Toyota Motor Corp. and Honda Motor Co. touting their investments and the number of U.S. jobs they have created.

Level Field has paid for TV and print advertisements emphasizing that "not all automakers are the same."

Level Field's president, Jim Doyle, a former Clinton Administration official, is in Traverse City this week gathering information for the group's publicity campaign.

"If domestic automakers did as little of their production, design, engineering and other critical activities here in the U.S. as foreign automakers do, we'd lose about half the automaker jobs currently here in the U.S.," Doyle said.

Honda's senior vice president of automotive operations, John Mendel, countered that the American question was a "nonissue for us."

"Eighty percent of what we sell here we build here. We import fewer cars than Ford Motor Co.," Mendel said. "Is Ford a U.S. company any less than Honda's a U.S. company? I think those lines have blurred enough where people are saying, 'I know what I want. I'm going to buy what I want. I really don't care where it's built, unless it's someone producing products in sweatshops that I fundamentally oppose.' Is DaimlerChrysler a U.S. company?"

Honda spokesman Ed Miller clarified that Mendel's comparison to Ford included Mazda imports.

Long gone are the days when foreign cars were burned or crushed in public demonstrations in Michigan and elsewhere in the Midwest. Detroit's automakers are all aligned with foreign makes and import vehicles from Mexico.

But that doesn't necessarily mean the patriotic rhetoric no longer resonates, said David Cole, head of the Ann Arbor-based Center for Automotive Research, which organizes the Traverse City event.

Cole said the idea is not "to convince people to buy bad American-made cars," but "to make people aware of the impact of the domestic industry."

You can reach David Shepardson at 202-662-8735 or dshepardson@detnews.com.

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