In Globalization Age, What Does “Made in America” Mean? – Kogod Now
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Kogod Now / Cover Story  / In Globalization Age, What Does “Made in America” Mean?

In Globalization Age, What Does “Made in America” Mean?

In Henry Ford’s day, consumers knew exactly where their cars came from. Ford made everything under one roof, processing steel and splitting lumber for wheel spokes at the massive River Rouge plant in Dearborn, Michigan. But that level of manufacturing purity hasn’t been the case for a long time.

In this age of globalization, suppliers can be anywhere. Beginning in the 1960s, auto manufacturers stopped making everything themselves in favor of farming out parts production to lower-cost suppliers. Ford and GM pioneered the process, and it picked up speed over the next few decades.

Now, break down a single “American-made” transmission and you’ll find many smaller parts, each stamped with its own country of origin.” You may well find 80 percent of the parts inside that transmission didn’t come from the US,” said Frank DuBois, associate professor of international business. “You start disaggregating vehicles, and you’ve got thousands of primary and secondary suppliers that have some hand in creating those parts.”

MORE: Redefining “American Made” Cars – DuBois’s Index Ranks 253 Models

For the consumer who simply wants to know, “Was this car made in America or not?” a clear answer is almost impossible. In 2013, when Toyota is newly sponsoring NASCAR, Chrysler has a plant in Canada, and BMW employs thousands of South Carolinians, what does it mean to be American-made?

An expert on global supply chains and a car buff, DuBois saw that this fundamental shift in manufacturing had not been reflected accurately in existing measurements. He turned his attention to the American Automotive Labeling Act (AALA), which purports to inform consumers about the “American-ness” of the vehicles they buy.

Since 1994, the regulation has stipulated that vehicles must carry labels stating what percentage of their parts came from the US or Canada, and which countries contributed at least 15 percent of the content. Also listed are the country of assembly and where the engine and transmission were made.

But the AALA data are critically flawed and easily manipulated, according to DuBois. He has created a new index that he believes more accurately reflects vehicles’ country of origin, including several factors not addressed by the AALA. For consumers who insist on buying American, DuBois’s index enables them to make a more informed decision. Compared to the AALA index, he said, it “gives consumers more knowledge, and knowledge is power.”

DuBois argues that his index provides a more accurate assessment of a vehicle’s true country of origin: “All that automakers are required to do is abide by the terms of the AALA, and I would argue the AALA is a flawed measure.”

Made in America?

In smaller industries—apparel, furniture, foodstuffs—the country classification is often simple. But with automobiles, it’s a very different story.

For the consumer who simply wants to know “Was this car made in America or not?” A clear answer is almost impossible.

DuBois first learned about country-of-origin issues in the early 1970s, as a Volkswagen mechanic in Virginia Beach. The shop did a brisk business replacing mufflers; the parts came from Germany and popped easily onto the cars. But when the shop began sourcing mufflers from Brazil, it took a lot more work to wrestle them onto the VWs. That’s when DuBois became aware of the increasing globalization of manufacturing.

To DuBois, American-made is not a term that can be applied wholesale; instead, it reflects a percentage of content. While purists may shudder at the globalized economy, pure American-ness is no longer realistic, he said. “We’re not at the point where everything can be American-made anymore.”

The impetus for DuBois’s research was a conversation with an alumnus, Rob Engel, BS ’82/MA ’04, who serves at the American Automotive Policy Council (AAPC).

Using data from the AALA, automakers’ annual reports, and Form 10-K filings to the US Securities and Exchange Commission, DuBois’s index ranks 253 models based on

  • • where the manufacturer’s headquarters is located;
  • • where most research and development (R&D) occurs;
  • • where assembly occurs;
  • • where the engine and transmission come from; and
  • • the AALA score.

Each category is scored higher for US-based parts and operations. For example, a car gets a 6 if its R&D is domestic, a 3 if R&D is foreign but the car is assembled in the US, and a 1 if R&D is foreign and the vehicle is imported. Scores are summed for a possible total of 100.

According to his analysis, a GM, Ford, or Chrysler vehicle designed and sourced in the US but assembled outside the US scores higher than a vehicle assembled in the US using a foreign engine and transmission by a foreign automaker.

He anticipates the index will draw criticism from manufacturers. His response? “Show me something better.”

Born in the USA

Even the most homegrown manufacturers are now global corporations. DuBois noted that of Ford’s 56 research centers, 45 are in the United States—which means 11 are elsewhere. On the other hand, four out of every 10 Ford workers are based in the US, while Toyota has just one out of 10.

BMW operates one of the largest manufacturing plants in the US: about 7,000 workers staff its Greer, South Carolina, plant. Yet most of the content used to assemble the BMWs comes from overseas, and about 70 percent of the cars go back there, according to DuBois.

Given these complexities, what makes a car American-made depends on whom you ask. In’s 2012 American-Made Index, the top-ranking vehicle isn’t a Ford, Chevy, or GM—it’s the Toyota Camry, made in Kentucky with an American engine and transmission.

In DuBois’s 2013 index, by contrast, the Camry is in a six-way tie for 12th, with a score of 78.5. According to his analysis, the most American car is a three-way tie between the GM Acadia, Enclave, and Traverse, all with a score of 88.5. Although non-US vehicles may rank higher in terms of the country of origin of parts and components, the fact that GM does most of its research and development in the US, and is headquartered there, moves it to the top of his ranking. DuBois argues that an index of this sort must account for the country of origin of the manufacturer and the location of R&D operations. Some Japanese models do rank higher than domestic models, but only 17 of the top 65 vehicles on his index are from foreign manufacturers.

However, none of the Big Three gets a perfect 100 on DuBois’s index. When scores are averaged, GM is in the high 70s, followed by Chrysler and Ford. Still, their averages are significantly higher than Honda, Toyota, and other foreign manufacturers.

The data also vary depending on whether you are looking for a sedan, a pickup, or a minivan. The sedan shopper who insists on buying American may be surprised to learn that the Ford Fusion and Chrysler 300 rank lower on DuBois’s index than several Japanese models. Pickups, on the other hand, consistently rank as full-blooded—well, mostly—American. And if you’re in the market for a minivan, the highest-ranking models are from Honda and Toyota.

Totaled Beyond Repair?

In theory, that is what the AALA was supposed to address when it was created almost two decades ago. But its numbers were tangled from the start.

For one thing, AALA reports do not distinguish between US and Canadian parts. As DuBois pointed out, Windsor, Ontario, is just five miles from Detroit across the US-Canada border. That proximity, combined with an exchange rate advantage, once prompted many domestic manufacturers to set up plants in Canada.

But that’s just one problem with the numbers. DuBois sees many more, starting with the fact that automakers report their own data—there are no auditors, no third-party verification. That means manufacturers can massage their reports in any number of ways.

For example, automakers submit one report for each model—say, the Honda Civic—without accounting for differences among the Civic Coupe, Civic Sedan, Civic Si Sedan, and so on.

The most dramatic opportunity to fudge the numbers lies in the part of the legislation that says if manufacturers have at least 70 percent domestic content, they can round up to 100 percent. That means engineers can assemble a car with almost one-third of its parts from another country and tout it as fully American-made.

DuBois’s index addresses those weaknesses by broadening the factors used to determine country of origin. Beyond physical parts, other factors—such as research and development, corporate overhead, and assembly—often represent money flowing to the country where the automaker is headquartered.

“They want to be a global enterprise with a strong local presence, but where the rubber meets the road, where do the profits go? The profits go, more often than not, back to the home country of the manufacturer,” DuBois said.

An accurate assessment is crucial because auto manufacturing remains a critical sector of the US economy, in both job creation and the economic multiplier effect. An estimated 14 million new cars and trucks were sold in the US last year, each costing an average of $30,303, according to Forbes.

Accuracy also matters because post-recession consumers pay more attention to where cars come from. And automakers are responding with investments in “Made in America” advertising. But, as with most advertising, the devil is in the details. DuBois pointed to Volkswagen, which heavily promoted its new plant in Chattanooga, Tennessee, even building a $40 million visitor center, according to Motor Authority. Yet only one of VW’s 21 models, the Passat, is assembled in the US, compared with 29 of 34 GM models.


While American and foreign automakers play up “Made in America,” that may not be the best strategy for companies targeting consumers overseas. While DuBois’s work speaks to consumers who want American-made products, the research of Assistant Professor Cristel Russell touches the other end of the coin: international consumers whose anti-American views lead them to spurn products with strong American branding.

Russell’s work has serious implications for how companies should promote products in international markets. Those exports, by the way, totaled $2.1 trillion in 2011, according to the US State Department.
Russell found that for individuals with a negative attitude toward the US, the more strongly they associate a brand with America, the more deeply they will be prejudiced against those products.
The catch? Most people’s views are not black-and-white.

According to Russell, numerous factors influence attitudes about distant nations. Historical relationships and media coverage play a role. The biggies—war, the economy, environmental crises—all shape the way we view other nations. At the micro level, someone who has visited America will likely have a different impression than someone with only secondhand knowledge.

Jeans and American flag

Some brands have the power to rise above politics. Levi’s jeans, for example, are widely viewed as authentically American, Russell said: “For those brands, being positioned in America has worked in their favor because they are able to capitalize on good associations.”

Companies pay attention to such things because, ultimately, humans are malleable. “We’re very easily manipulated…which is why marketers have a job,” Russell said. “They’ve figured out they can shift people’s views.”

Yet anti-American feelings, where they exist, are deeply anchored. When such views are entrenched, even clever marketers have a tough time turning them around. One strategy is to employ counter-stereotypic association training, or playing against type.

For example, a prevalent stereotype of the US is “everything is big and plenty,” Russell said. A branding strategy to counteract this impression would play up features people do not associate with that image.
First, however, companies must understand how strongly consumers view their products as American.

Buyer Bias

Working with Dale Russell, a researcher at the Uniformed Services University, Assistant Professor Russell set out to test whether the strength of a brand-country association influenced the relationship between consumers’ animosity toward a country and their attitudes toward certain brands. In other words, if a consumer strongly associates McDonald’s with the US and has anti-American feelings, is that person less likely to patronize McDonald’s than an anti-American consumer who only loosely associates McDonald’s with the US?

First, the researchers measured the strength of country associations for several brands. Then they used different advertising images to manipulate those associations and measure whether consumers’ attitudes were affected.


Previous research had confirmed that animosity toward a country affects consumers’ willingness to buy its products. Researchers also know these attitudes are powerful even when inaccurate; in one study, participants incorrectly identified the country of origin for one-third of 84 brands.

They surveyed 731 university students in France. The country was chosen in part because among US allies, France’s anti-Americanism is most pronounced. The researchers were also intimately familiar with the ins and outs of Franco-American relations, as Cristel is French and Dale an American.

The French present an interesting case of ambivalence because their feelings toward America are complex, she said. On the one hand, America came to France’s aid in World War II. The French also embrace American pop culture. On the other hand, many French view the influx of American fast-food restaurants as a threat to their traditional way of life.

“That’s French culture, so at the same time that they have all this deep-felt love and respect for America’s help in the past, they find themselves always criticizing the invasion of McDonald’s and Coca-Cola and how that’s ruining culture,” Russell said. “That’s why we talk about ambivalence, because people have really mixed feelings about this.”

The students answered questions measuring their attitudes about 14 brands, half of which were American. One month later, 291 of the students took a survey rating their agreement with 12 statements measuring attitudes toward America.

The Russells found that four of the US brands were strongly perceived as American, four were not, and the remainder fell somewhere in the middle. Analysis showed that, indeed, consumers’ animosity toward brands was related to the strength of their association with the US, with one interesting exception: Levi’s, thanks to its perceived authenticity.

The more consumers think of these brands as American, the researchers found, the more negative they feel toward them.

Swallow It Whole

Building on that finding, they conducted a second study of 77 French residents between the ages of 20 and 35. This time, their goal was to evaluate consumers’ responses to a fictitious new beverage, V, when it was shown in American and non-American contexts. Consumers viewed one advertisement showing the Statue of Liberty and the tagline “V is soon arriving from America.” They viewed a second advertisement creating a weak US association, with the tagline “V is soon arriving from afar” against the skyline of Melbourne.

After participants viewed the ads, the researchers measured their attitudes toward V, including how American they perceived it to be. They then told the participants they could enter a lottery for free beverages and choose from an assortment that included V and other brands. This captured whether participants’ attitudes could actually extend into a purchasing decision.

The results confirmed that consumers with low animosity toward the US showed little difference in their attitudes toward V, regardless of whether it was pitched against a New York City skyline or not. But the most anti-American consumers did adjust their attitudes in response to whether V was presented as American. This finding was substantiated in participants’ choice of which beverage they would select to drink: Those who felt animosity toward America and perceived V as American were less likely to choose it.

“With a single picture, you can completely shift people’s perceptions and responses to brands in this case,” Russell said. “It’s fascinating to see this because there’s been lot of talk about, ‘Does this matter for brands? Should marketing managers worry about this kind of stuff?’ Clearly you see, yes, it does.”

The French participants in the study elicited vocal criticisms of America when it came to current events, Russell said, but “once you scratched the surface, a lot of them were talking about rock and roll and jeans and all the things they quite love about America.” That led Russell to her next project: a formal study of the effects of ambivalence.

Strong vs. Weak

The complexities of ambivalence vary, but a common stance toward America is to embrace its popular culture while rejecting its politics. When researchers detect such mixed opinions, it is “clearly a signal that what’s going on there doesn’t line up,” Russell said. She attributes the discrepancy to the fact that people are good at compartmentalizing, disentangling “I like American movies” from “I hate what the American government does.”

Consumers who harbor both positive and negative views of a country are less willing to purchase emblematic brands from that country.

This study, also conducted in France, was the first to measure how consumers’ ambivalence toward a country related to their willingness to buy associated brands. The researchers’ prediction? The more ambivalent people are about the US, the less willing they will be to buy American brands.

The researchers used in-depth interviews of French residents to come up with 20 statements capturing common beliefs about the US, and 291 university students then rated their agreement with the statements.

In the next phase, the researchers chose seven US brands that were perceived as very American and seven non-US brands. Participants rated their attitudes toward the brands, along with their frequency of consumption and future purchase intent. They also completed a questionnaire designed to provide an objective assessment of their ambivalence toward the US. Researchers then paired these results to evaluate the relationship between ambivalence and brand attitudes.

They found that “consumers who harbor both positive and negative views of a country are less willing to purchase emblematic brands from that country.” Resisting the purchase, it turns out, is one way we cope with inner conflict. According to Russell, researchers know that ambivalence is uncomfortable—the more conflicted we feel toward something, the more likely we are to avoid it.

For businesses, she said, that means companies should strive to reduce consumers’ ambivalence and overcome it with stronger arguments. Corporate research into overseas markets also should measure consumers’ ambivalence and the strength of brand associations.

Think Global, Act Local

As with auto manufacturing, the ever-expanding reach of global corporations has blurred the lines of what is purely American and what has taken on a life of its own, well beyond our borders.

Famous brands that originated in the US are often viewed as American, regardless of how global they have become.

Some entrepreneurs find opportunity in anti-Americanism. When Coca-Cola struggled in the Middle East market, French businessman Tawfik Mathlouthi introduced Mecca Cola in 2003 in a bid for anti-American soda drinkers, according to a BBC report. (He also, however, played up the Coke resemblance with white letters on a red label.) Mecca Cola is now sold in many countries, from Algeria to the United Arab Emirates.

Like Coca-Cola, famous brands that originated in the US are often viewed as American, regardless of how global they have become. Starbucks is for sale in 60 countries. McDonald’s burgers are in 119 countries. Consumers, however, still view them as American.

In the midst of this fragmentation of ownership, campaigns like the Farm to Table movement have sprung up. Growing in popularity, the focus is on the consumption of goods grown locally, thus supporting the local economy. A dollar spent at a local business, supporters argue, translates to 45 cents reinvested locally—as compared to 15 cents of dollars spent on products made by large corporations, according to Eat Local First.

Is that good for business, or bad? Just as with vehicles, it depends on whom you ask. KN

Academic papers that gave rise to the cover story:

Frank DuBois, “Evaluating ‘Made in America’: A Critique of the American Automotive Labeling Act And a Proposed Alternative,” accepted by the Academy of International Business Annual Meeting (July 2013).

Cristel A. Russell, Dale W. Russell, and Jill Klein, “Ambivalence Toward a Country and Consumers’ Willingness to Buy Emblematic Brands: The Differential Predictive Validity of Objective and Subjective Ambivalence Measures on Behavior,” Marketing Letters (2011).

Cristel A. Russell and Dale W. Russell, “Guilty by Stereotypic Association: Country Animosity and Brand Prejudice and Discrimination,” Marketing Letters (2011).

  • Bruce Armstrong
    April 22, 2013 at 3:27 AM

    First of all, I’ll identify myself as a retired engineer with a decades long detailed interest in the automobile industry, in which I never worked. I happen to live in Canada.

    I must say I find the Made in America car listings and the comment both flawed and highly disingenuous. It reeks of insularity and provincialism, quite frankly.

    First of all, zero mention is made of NAFTA. I find this typical of a great deal of American comment – why bother the reader with such details when trying to drum up a little controversy? The NA Free Trade Association has been in force for 20 years, and under it products manufactured in Mexico, Canada and the USA flow freely without duty between all three countries. So what is gained by not noting this fact? In effect, the existence of NAFTA means that there should be no distinction made between products made in each country and that such “foreign” content should not be regarded as foreign by the other two.

    Using Mexico as a cheap place to assemble cars for the US market was started by Ford in the 1980s. Chrysler had Mexican facilities since before WWII before ramping up like Ford in the 1990s. Making US cars in Canada started in the 1920s. In 1965, a free trade pact between the US and Canada allowed US manufacturers to utilize relatively cheap labour north of the border to make cars and ship them south. That pact ended with the signing of NAFTA.

    I see no sign of American manufacturers worrying about how US-centric their manufacturing was if they could turn bigger bucks making their products somewhere else.

    Let me now turn my attention to the lists themselves. There is the column regarding profit, accorded 6 points. No mention is made that every major car company except BMW has publicly traded stock, so who actually owns what is not really known in all cases. I do know that the Canadian government owns 9% of GM as a result of the bailout following their bankruptcy 4 years ago.

    Also, Fiat owns a majority of Chrysler, with the rest belonging to the UAW. Fiat is not a US company, period. So putting 6 in the Profit column of every Chrysler vehicle is incorrect and would disturb the rankings if corrected.

    There are so many detail errors in the listings, it beggars belief. In some cases, Canadian or Mexican “body” listings seem to follow NAFTA. In other cases, Canada seems to get an almost free pass and regarded as American, while Mexico is shafted.

    Examples: Camaro, all Chrysler minivans, Chrysler 300, Acura MDX are all assembled in Canada. They get big “body” ratings as if they were US assembled.

    Dodge Journey, Fiat 500, Lincoln MKZ, Ford Fusion get very low “body” ratings, because well, Mexico is apparently foreign, despite NAFTA. The VW Jetta, made in Mexico, with made in Mexico engine, is totally annihilated. The Subaru Legacy/Outback with engines built up in Indiana, bodies made in Indiana, seats, electrical gear made in the US, gets a big fat zero on the engine and 20% on the “body”. The Honda Accord CVT transmission equipping about 80% of that model is 100% manufactured in the US.

    Your expert is not up-to-date.

    These are only a few of the problems with this list. The percentages accorded various items seem to have been plucked out of thin air as well. I personally cannot grant the “expert” who assembled this list any real credibility at all. It is slipshod work at best, in my opinion, and shows strong bias against Mexico and the free trade pact your country is part of, while granting Canada almost a free ride.

    Not noting that Chrysler is an Italian company is the biggest howler of all. Sergio Marchionne, the CEO of Fiat and Chrysler, would find this list to his liking, while wondering if it were ever subjected to peer review, or indeed review by anyone au courant with the industry.

    Bruce Armstrong

    • Frank DuBois
      April 24, 2013 at 11:16 AM

      Dear Sir: This index was constructed based on reports produced by automakers under the requirements of the American Automotive Labeling Act (AALA) and is an attempt to more accurately gauge the impact that new vehicle purchases have on the US economy. Here in the US, all new vehicles are required to display a window sticker next to the details about pricing and options that provides information about the country of origin of parts and components, point of final assembly, and the origin of the engine and transmission. The US National Highway and Transportation Safety Administration website ( contains more detail with respect to these requirements. With regard to comments about NAFTA. NAFTA does not play a role insofar as the main data source are the AALA reports from automakers, this is self reported data and varies significantly in terms of level of detail (Ford lists data for 7 different Mustang models while Chevrolet aggregates all of the various permutations of the Camaro into one model).

      The index was developed in response to other indexes which use only AALA information to support assertions as to which cars sold in the US are the “most American,” not Canadian and not Mexican! I am concerned that these indexes present a distorted view of the realities of auto manufacturing and that a more realistic index should take other factors into account. To start with, under the requirements of the AALA, US and Canadian vehicles are aggregated into one category with respect to the country of origin of parts content. The AALA does collect information with regard to the country of origin of the engine and transmission as well as the country of final assembly. Mexico and Canada are treated equally in the Kogod index insofar as country of final assembly is captured in the index based on AALA reports. That is, if the point of final assembly is Mexico or Canada, the vehicle scores zero for labor as well as inventory costs and capital expenditures.

      Compare the Ford Mustang to Chevy Camaro. The Camaro is assembled in Canada so scores zero for assembly labor and inventory and capital equipment. Ford, assembled in the US scores much higher (85 vs 68.5). Were one to compare the Mustang and Camaro solely on the basis of AALA scores in they would be virtually tied despite one being assembled in a manufacturing plant in Canada. As such, I do not think the AALA data by itself paints an accurate picture of the true “country of origin.” With respect to the Body ratings for the vehicles that you mention, this is data taken directly from each vehicle’s percent parts content score in the AALA. I take 50% of this number which is an estimate of the percentage of vehicle sales price encompassed by parts exclusive of the engine and transmission.

      The case of Chrysler is as you state complicated and in future iterations of the index I will likely adjust ownership to reflect its continually changing ownership status. While Chrysler is majority owned by FIAT (an Italian Company), 38% of shares are controlled by the United Auto Workers. This means that the UAW plays an important role in strategic decision making through its representative on the board of directors. In discussions with industry experts, in particular, researchers at the Center for Automotive Research in Ann Arbor, I concluded that at this stage of the integration of Chrysler into the FIAT corporate structure there is a strong argument to be made that the majority of the R&D and strategic decision making takes place here in the USA in contrast to other more “foreign” automakers.

      Without getting more detailed country of origin data from each automaker (and their suppliers) for each model and variation of vehicle this is about the best that can be done given the data available. Given that there are over 300 vehicles reporting AALA numbers this would be a monumental task. Again, my objective in developing the index was to provide more information to consumers with regard to what is typically a major purchase decision. Any index will have its strengths and weaknesses and it is my hope that subsequent iterations of the index will be improved upon as commentators such as yourself question and debate its contents.

  • steven wonder
    August 23, 2013 at 7:52 AM

    I think your data concerning the Dodge Grand Caravan and the Chrysler T&C are incorrect. Both products should have identical data points yet the Dodge GC scores hirer than the Chrysler T&C. I would think the labor and inventory categories would be the same as both models are produced in Windsor Ontario.

  • Won Chang Hwang
    August 30, 2013 at 5:54 AM

    Dear Professor DuBois,
    Thank you for releasing index and tell the truth. Indeed, I was so dumbfounded that people make quick assumptions that Toyota and Honda are American because they pay taxes and make cars in American soil. However, they never talk about where majority of profits go and cars are designed.

    • Won Chang Hwang
      August 30, 2013 at 5:59 AM

      Purchasing foreign automakers don’t benefit America. Paying tax is just a duty required by US Law. Even US automakers are subject to taxation and fines when they are operated in foreign countries. Another problem with import car supporters is that car lineups are different in foreign countries. For example, Import drivers are using Chevy HHR as one of the examples to criticize GM because it was made in Mexico, however they don’t know that GM is making a new Cobalt with different exterior and never brings it to US. How about Sail and Orlando? How about Ford Falcon?

  • dennis golbesky
    January 10, 2014 at 4:27 PM

    I enjoyed the article and the detailed list. Not all projections can be 100% accurate, but being consistent with the approach should present a relative picture of how each auto stacks up relative to the others.

    I am looking to purchase a new suv in 2014 and hopefully this list will be updated as new models are released. I am trying to buy American, but at the same time I need to find a choice that suits my needs, and taste.
    Thanks for helping out

    • Jackie Sauter
      February 17, 2014 at 11:16 AM

      Dennis, we will be updating the index shortly – in the next month, most likely. Stay tuned! Thanks for your interest.
      Jackie Zajac, editor, Kogod Now

  • John Chaeles
    March 10, 2015 at 4:56 PM

    Please show me where I can find the domestic parts content of a 2015 SE Ford Escape

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