Kogod Rankings Reveal American-made, Foreign-branded Cars

Much press and political bartering give considerable weight to where products are manufactured. Americans lament the loss of manufacturing industries as companies relocate internationally. Many consumers seek out American-made goods in response. The Kogod index rankings reveal the country of origin for what's under the hoods of more than a hundred vehicles. These rankings also reveal the need to rethink what it means to be "Made in USA."

The past several decades have witnessed significant shifts in the U.S. manufacturing industry. One of most-discussed changes is many American companies' relocation of production plants to foreign countries. The offshoring of manufacturing prompted a backlash that resulted in "Buy American" campaigns in which consumers are encouraged to purchase only those products made in America. Politicians urged companies to remain in or return to the United States. Some companies are heeding the calls and are reconsidering foreign manufacturing. Companies such as Apple, Inc. are opening new plants in the United States.

Given the globalization of production and consumption, though, expectations of purchasing a product entirely made in the USA might be unrealistic. This is especially true of automobiles. Vehicles contain thousands of components manufactured and assembled throughout the world, which makes the task of determining the domestic content of vehicles sold in the United States a challenging task. To address this challenge, American University's Kogod School of Business developed an index that ranks the year's vehicles in an attempt to provide the public with a more accurate reflection of a car's country of origin and the impact of its purchase on the U.S. economy

Officially titled the Kogod Made in America Auto Index, the Kogod index incorporates product manufacturing data from the American Automotive Labeling Act into its calculation as well as details about the vehicle's location of assembly, the location of the company's headquarters and the location of where research and development occurs. Through a weighted computation based on a range of relevant factors the Kogod index assesses not only where a vehicle is manufactured but who benefits from the manufacturing. A German-based automotive company vehicle assembled in the United States using parts manufactured across the world would likely score lower on the Kogod index, for example, since the bulk of the economic benefits are enjoyed elsewhere. Technically, such a vehicle would be considered made in America, despite its foreign brand name.

The Kogod index strives to provide an accurate assessment of automobiles' countries of origin. An accurate assessment is important because auto manufacturing continues to be a critical sector of the U.S. economy, in both job creation and economic stimulation.

National discourse on the subject of the U.S. manufacturing industry typically turns towards closed factories and a desire for manufacturing to return to this country. The Kogod index adds to the conversation and addresses what it means for vehicles, at least, to be made in America in the modern era.

(Photo courtesy of digidreamgrafix / freedigitalphotos.net)