Why Lincoln and Cadillac are Failing

By JOEL D. JOSEPH

Cadillac and Lincoln, America’s top luxury automobiles for the past one hundred years, are failing because many of their vehicles are being imported, mostly from Mexico. The Made in the USA Foundation conducted a survey with Harris Interactive recently, and discovered in an overwhelming percentage, Americans would prefer to buy, and will pay more for, American-made products, particularly luxury goods.

It is astounding that Mercedes Benz and BMW, non-American companies, manufacture more vehicles in the United States than either Lincoln or Cadillac. And neither BMW nor Mercedes manufactures cars in Mexico for the American market.

You may have thought that Cadillac and Lincoln are suffering because of poor quality. This is definitely false for Cadillac: According to J.D. Power & Associates, Cadillac ranks higher in quality that BMW or Mercedes for 2012. The American-made Cadillac Navigator ranked highest of all of its cars and trucks. The US-made Cadillac ATS was selected as Motor Trend’s Car of the Year for 2013. So there’s definitely no questioning whether or not Cadillac can make state-of-the-art high quality cars in the United States.

The Made in the USA Foundation nominated the Cadillac ATS and the Lincoln MKS for this year’s Hall of Fame Awards for luxury vehicles. The Tesla S was also nominated in this category.

Lincoln recognizes that it has a quality problem with its Mexican-made Lincoln MKZ. After assembly in Mexico, the Lincoln MKZ is shipped to Michigan for a final quality inspection.

Lincoln’s 2012 total US sales were a meager 82,150 cars and trucks, a decline of 4%, compared to BMW, which led US luxury car sales with 281,460 units sold, up 13.5% from the previous year.

Lincoln sales peaked in 1990 at over 200,000 vehicles. Its sales are now only 40% of what they were 20 years ago, while US car sales are booming. The Lincoln MKZ is made in Mexico, the Lincoln MKT is made in Canada. The Lincoln MKS and the Navigator are made in the USA. This can all be very confusing to consumers. Consumers think that Lincoln and Cadillac are American cars, but 74% of Lincoln’s sales were imports!

For the year 2012, Cadillac sold 149,782 new luxury vehicles in the US. This accounts for a decline in sales from the year before of 1.7%. Cadillac was one of just five brands sold in the US to show a decline in annual sales from 2011 to 2012, joining Lincoln, Jaguar, Suzuki and Mitsubishi. The Cadillac SRX is made in Mexico and represents 38% of Cadillac’s US sales.

General Motors, while still being majority-owned by the US government, had the audacity, and stupidity, to move production of the Cadillac SRX from Michigan to Mexico.

BMW manufactured 301,519 vehicles at its Spartanburg, S.C. plant in 2012. Seventy percent of the vehicles produced there were exported; making BMW the USA’s largest automotive exporter, and BMW isn’t even an American company! More than two million BMWs have been made in Spartanburg. Thirty percent of the vehicles that BMW assembled in South Carolina, or 90,000 vehicles, were sold in the US. More than 200,000 vehicles were exported. Remarkably, BMW built more vehicles in the US than it sold here.

Mercedes reported sales of 274,134 cars and trucks in the US in 2012, a 12% improvement from 2011. Mercedes manufactured 182,000 vehicles in Alabama, selling 74,000 in the United States while exporting 108,000 units.

In total, 25% of Mercedes sold in US are made or assembled in the US.

The message for Cadillac and Lincoln: follow BMW and Mercedes’ example and build more cars in the US. If Mercedes and BMW can do it, why can’t American car manufacturers build luxury cars and trucks here? Cadillac’s quality is rising on its US vehicles and should keep on that path. Lincoln knows that it has quality problems in Mexico and should come back home to the US where it has enjoyed a reputation for great quality for over 90 years. Lincoln’s new ad campaign does nothing to solve its fundamental problems. Lincoln should start making the cars in the US that made it famous: the Lincoln Town Car and the Lincoln Continental as well as moving production of its midsized MKZ to Michigan.

Joel Joseph is chairman of the Made in the USA Foundation, a non-profit organization dedicated to promoting American-made products. Email joeldjoseph@gmail.com, phone 310 MADE-USA, see madeusafdn.org.

From The Progressive Populist, June 1, 2013