Thursday, February 6, 2014

A Geography Lesson for Bob Dylan and Fiat

Both Made in America

Not Exactly

Chrysler's Super Bowl commercial featuring Bob Dylan has generated significant controversy, with some claiming that Dylan "sold out" and compromised his anti-establishment principles by accepting money to sell automobiles.   (See here, here, here and here for stories or commentary on the topic.)  (John Mellencamp, it should be noted, spurred analogous controversy when he licensed his superb song "Our Country," to Chevrolet, which featured portions of the song prominently in several advertisements for its trucks.)  Perhaps because I am not an expert on Mr. Dylan's principles, this blogger found the content of the advertisement more intriguing and perhaps more controversial.  In particular, the advertisement, which began by asking "is there anything more American than America ?" was a straightforward and well-conceived argument that Americans should buy purported American cars, particularly Chryslers.  A self-described "obsessive Bob Dylan fan" blogging for the Washington Post put it quite well:  "Dylan [was] telling us, in as many words — America rules. Buy an American car. Specifically, buy this Chrysler." 

The advertisement is thus intriguing because Chrysler is, for all intents and purposes, an Italian company.  For more than two years now, Fiat, has owned a majority interest in Chrysler, an arrangement the United States encouraged pursuant to the ill-advised bailout of the failed and defunct firm in 2009.  (See also here.)    Moreover, in early January of this year, Fiat announced that it had purchased the remainder of Chrysler from the United Auto Workers.  Apparently unbeknownst to Mr. Dylan, Fiat is headquartered in Turin (Italy, not Georgia) and also incorporated in Italy.  The firm recently announced that it will declare the United Kingdom as its seat for tax purposes.  In short, Chrysler is no more an American company than, say, Volkswagen Group of America.  The latter, while incorporated in New Jersey and headquartered in Virginia, is a wholly-owned subsidiary of the Volkswagen Group,  incorporated and headquartered in Germany.  To be sure, Fiat still manufactures automobiles in the United States that display the Chrysler trademark. However, like many other foreign manufacturers, Volkswagen also produces automobiles in the United States, including at a billion dollar plant in Chattanooga, Tennessee that employs 3,200 Americans.  (Is there anything more American than Chattanooga?)  Would such cars suddenly become "American" if Volkswagen renamed them for a now defunct American company, e.g., Studebaker or Checker?  If not, then Chryslers are no more "American" than Volkswagens.  If so, then any company that manufactures cars via a wholly-owned subsidiary in the USA can characterize their cars as "American" and appeal to consumers' patriotism as Chrysler has done.  Perhaps next year's Super Bowl will feature several similar commercials touting the virtue of "American" automobile companies such as Toyota (which manufacturers cars in Kentucky), Honda (which manufacturers cars in Indiana), and BMW (which manufactures cars in South Carolina), to name just a few. 

This blogger hastens to add that he is a big fan of free trade and would gladly buy a Fiat, for instance, if such a car otherwise satisfied his needs at a reasonable price.  Moreover, in a free society, individuals should feel completely at liberty to purchase cars wherever they are made and without arbitrary interference by the State.  Such freedom includes the freedom to confine one's purchases to "American" cars out of a sense of patriotism or obligation to one's fellow citizens who own American companies and work for them.  To make such choices, however, Americans and citizens of other nations need accurate information about the nationality of the companies from which they purchase.   Dylan's "Chrysler" commercial will likely do more to confuse such consumers than inform them.