Foreign Parts Invade American Cars

U.S. auto production is nearing all-time highs on the back of strong domestic demand and steady export increases. But American-made cars and trucks are increasingly loaded with parts imported from Mexico, China and other nations.

The U.S. imported a record $138 billion in car parts last year, equivalent to $12,135 of content in every American light vehicle built. That is up from $89 billion, or $10,536 per vehicle, in 2008—the first of two disastrous years for the car business. In 1990, only $31.7 billion in parts were imported.

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The trend casts a cloud over the celebrated comeback of one of the nation’s bedrock industries. As the inflow of low-cost foreign parts accelerates, wages at the entry level are drifting away from the generous compensation packages that made car-factory jobs the prize of American manufacturing.

John Childers and Chrystal Varty (back row, center)
 with their children on the porch of their home in Three 
Rivers, Mich.

At an American Axle & Manufacturing Holdings Inc. car-parts factory in Three Rivers, some new hires are paid as little as about $10 an hour, roughly equivalent to what the local Wal-Mart will pay. John Childers, a 38-year-old assembly-line stocker, said he is grateful for the job but finds it tough to get by on the money he and his fiancée make at the plant.

“Lower class is what we are,” he says. “Let’s be honest.”

Mexico was by far the biggest supplier of car parts to the U.S. last year, accounting for 34% of the imports, followed by China with 13%. Imports from China have more than doubled since 2008. Those from Mexico are up 86%.

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