I've been watching all this unfold with the big three while the stock market bounces like a yo-yo on steroids... Massive job cut announcements are a daily thing... it's official - the economy is in the toilet... are we going to flush it down the pipes and into the sewer? If we don't bailout the big three - I suspect that is exactly what will happen. There are so very many angles to consider here. First - no one I know of wants to buy a new car... or a used car... or anything that costs anything more than $500 right now. Most of us are in hording mode - trying to stock up on food, cut expenses and concentrating on surviving. Luxuries like a new car are really hard to justify. I look in the driveway and see my truck that I've had a little over two years now and have no intentions of getting rid of. In times past, by the time I hit the two year mark with a truck, I'm ready to get a new one. Now I sit here and think well, it should live at least 150,000 miles so I should have 100,000 or so more to go. I think my thought process is not unique at all, actually I think it is very common right now. So by bailing out the car makers - are we just delaying the inevitable? Or will the economy come back in 2010 like they say?
Granted - the big three have done nothing worth noting to try and prevent this from happening. They seem to spend money like there are no limits. Paying workers most of their salary for not working just doesn't seem like the brightest business model to me. It's been more than three years since hurricane Katrina hit and gas prices jumped to $3 a gallon. That kind of made me take a look at gas mileage as something that needs to be strongly considered. I know the car companies have made strides in improving gas mileage but there is such a very long way still to go.
For the average person - the math is pretty simple.... you need money to survive, keep a roof over your head and food in your belly.... so you need a job... and a way to get too and from that job. When it takes $60 a tank to fill your SUV - how far can you realistically afford to drive to work? I'm not bashing SUVs - I have one myself. I like to take road trips and I want a vehicle big enough to take passengers in comfort and big enough to haul my camping gear. But I did trade down from a 4x4 V6 (16 mpg) to a 2wd 4 cylinder to pick up the extra 4-6 miles per gallon (there were other reasons as well - primary being I wanted to be able to carry more than one passenger at a time). In town if I don't need to haul anything other than myself - I prefer my motorcycle at 55 mpg or my scooter at 83 mpg. So yes, I have an SUV that gets 20 - 22 mpg but I also have other, cheaper alternatives as well.
Back to the car companies... if they go under, it effects many other businesses... including a lot of mom and pop businesses that are near the various manufacturing plants. Diners, day care centers, gas stations, bars... the trickle down effect could be huge. But what good does it to make cars no one can afford? And are they even the cars people want if they can afford them? Honestly - who is going to buy a car right now without concerns about how long that car will live? How much it might cost to maintain?
I think the car companies need to take a good look at real people and see what their needs are and then figure out how they can meet those needs. They need to make "made in America" a symbol of pride and quality, of innovation, of affordability and dependability. We do need need to save the car companies - we can't afford not to. In turn they need to adjust and learn how to take care of the consumers that are indeed their lifeblood.
Tuesday, December 9, 2008
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