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Born in Germany - Raised in Canada - Buried in the USA

autoaccessories4less | Sep 15, 2010 |

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No, this isn't a biography of some famous actor or stateman. This is only about a car. While I was watching television this weekend, I saw a commercial for the Buick Regal. Much to my surprise, the voice on the commercial said that the Buick Regal was born in Germany. Now that was news to me! Since Walter Marr shares my surname, I have been knowledgeable about Buick Motor Car Company. Uncle Walter, although he probably wasn't an actual relative, was the designer of the original Buick cars at the turn of the 20th century. These cars were designed, developed and produced in Flint, Michigan. So, how did the Buick Regal get born in Germany?

With a little research, I found out that the Buick Regal is produced on the Epsilon II platform at the Opel plant in Ruesselsheim, Germany. This new "world platform" for GM is used on a number of vehicles including models with the brands of Opel, Vauxhall, Saab and, of course, Buick. The platform is the chassis that goes on the bottom of the vehicle. Having a standard platform make it easier and cheaper to build a car because many of the components are interchangeable. The Buick Regal gets those cost advantages and uses them to offset the extra cost of shipping a car from Germany to the USA.

Here is where the plot thickens. Because of the weak US economy and never ending imbalance of trade, the US dollar has continually declined in value since the newest Buick Regal was introduced. This has made the cost of making a Regal go higher and higher. To stop this perpetual increase in cost, GM has decided to move the production of the Regal to North America. Starting in the first quarter of 2011, the Regal will be made in Oshawa, Ontario, Canada. This will help reduce the shipping costs and takes advantage of the free trade agreements with the USA. So with this move, the Buick Regal will be raised in Canada.

Unfortunately, the US market is still in the tank. With unemployment at almost 10%, the demand for new cars is stuck in low gear. By moving production to Canada, GM does improve its cost structure, but this will do almost nothing for the demand side of the equation. Right now there are plenty of people who make could make Buick floor mats sitting home unemployed. The people who could afford to buy a Buick Regal on their wages as a car assembler are also sitting at home without the income to buy this car. I know there are probably a few people who make floor mats, batteries or carburetors that get their jobs from Canadian assmbly plants, but they are certainly the minority. However, if GM wants to sell this type of mid-sized car in the USA, they will need to think seriously about making yet another move of the production of the Regal to the USA. Putting the assembly wage dollars and component production wage dollars back into the economy that you want to sell the car into will have a multiplier effect that will boost overall wages and add to the list of people who can afford this car. Leaving the assembly in Canada will certainly help GM sell more Buicks in Canada, but will challenge Buick dealers in the USA to find qualified buyers for these vehicles.

So the death of the Buick Regal will come in the USA. The cars sold here will steadily send economic wealth to Germany and then Canada while depleting the overall economic wherewithal needed to buy these cars. When the wealth in America is depleted, then there won't be anyone left to either buy a Buick Regal or to bury it.