Generally I avoid the news, but lately I am trying to see what is going on in the automotive sector. I was referred by Google to an article by Justin Hyde in the Detroit Free Press published Sunday, June 22, 2008. The title is "Month of Economic Troubles Has U.S. Automakers On Edge - Another Jolt Could Tear Them Asunder, Analysts Say." Just in case you want to read this piece, here is the link: Article.
This article is not meant to lift you up; however, he does have a small "positive" angle in a section sub-titled, "Hints of Hope." Hints is a good description. It's not his fault. He is doing his job and he is rewarded for focusing on what is wrong. He must have been overcome and thought seeing a bright side might help. Here is a great sentence that is under that Hints of Hope heading: "A stampede of customers shunning big trucks for small cars has left dealers with too few popular sedans to sell and too many unpopular SUVs and pickups clogging lots." A stampede of customers shunning. . . interesting phrase. I'm sure a stampede of customers should be doing something. I'm sure any dealer in the world would love to have a stampede of customers shunning or otherwise.
Nonetheless, the next two sentences say the opposite (still under the Hints of Hope heading): "Russ Shelton, owner of Shelton Pontiac-Buick-GMC in Rochester Hills, said incentives had done little to draw buyers into the showroom. "There's no floor traffic, there's no one calling in," said Shelton, a 30-year veteran. "This is probably the worst I've seen it, and I lived through the oil embargo of the '80s." Now, I thought this was interesting. I was selling cars during the oil embargo in 1973-4, which is close to the '80s, and my take was that this was a completely different thing. It wasn't gas prices, it was a shortage of gas. There is no shortage now. I can buy all I want. In 1973-4 I could not. But, I'll go with Shelton: it sucks. No, that's not it. It really sucks.
Under the next heading, A Troubling Month, we find this: "Outside of oil prices topping $130 a barrel, other economic indicators haven't reprised the worst of the 1980s, when soaring inflation and widespread unemployment triggered the worst recession since the Great Depression and nearly put Chrysler into bankruptcy." My that is a mouthful. You have to take a deep breath to get that all out. Soaring inflation. I kind of like that one, being a pilot and all. Soaring does sound kind of nice and free and exciting--as does inflation, I suppose--depending on what is being inflated. Then, we do always have to compare things to the Great Depression as if depressions can be great, capitalized and all. Having been in the car business since 1972, I know that the second greatest depression of the 1980s (has a nice ring to it, you think?) didn't almost cause Chrysler to go bankrupt. . . nearly. It was the crap they were building as I recall. But that was before Mr Mustang took over. I'm so glad that outside of current oil prices, things are not so bad in Detroit. The Big Three should feel much better now.
Then we get this line: "GM had $23.6 billion (that's BILLION--23,600 million!) in cash on hand at the end of the first quarter, which ended in March, along with another $7 billion (7,000 million) in credit available." Doesn't every business in the world want those kind of cash reserves. It does tend to give them time to respond or react or whatever.
It gets better. Here is the last couple of sentences: "Detroit "has to be able to transition to a business of not only producing cars and crossovers, but convincing customers to pay up for them," Clark said. "You have to have a fundamental sea change in the underpinnings of the business." Sure. Easy for you to say.
The first line in the story sets the tone: "Every sign of economic health--jobs, oil prices, credit, housing--suggests a calamity on the horizon as bad as Detroit's keystone industry has ever faced." Whew! It's always these pesky circumstances and changing seas that gets those Detroit Three into a calamity with the horizon. They do a great job of reacting to it all without anyone's help. Like this line: "GM President Fritz Henderson said last month that 18 of GM's next 19 new models in the United States would be cars or crossovers, while Ford pledged Friday to speed the transition of its more efficient European cars to American versions." You go GM and Ford. You go. That's the way to react to all this negative stuff coming down from the world. Great followership. Gas goes from $2.50 to $5 a gallon and they are planning on building smaller cars and importing more efficient European cars. . . nice! I'm wiggling in my seat as we speak. No wonder GM needs 23.6 billion stashed away. Gag me. Who was it that killed the electric car?
I had a great time laughing throughout this article. I hope you did too. To take it seriously is only for the insane and depressed.
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