Happy New Year!
Today, my son Corban turned 9 and we’ll be taking him out for the day – “Happy Birthday Corban!”
Many people in the automotive industry are saying so long to 2008. GM, Ford, Chrysler and most of the new car manufacturers had a terrible year as everyone knows. It’s true that the perfect storm hit the automotive industry in 2008, but they really didn’t do much to overcome the problem. They were it by high gas prices that went over $4 a gallon, scandals on Wall Street with credit default swaps that nobody had ever heard of except for a few bankers who were betting that people would default on their mortgages (legalized gambling), a real estate crash around teh country, massive layoffs with millions losing their jobs, plus the ongoing War in Iraq. I’m sure I’m forgetting a few other things as well, but needless to say it was not a great year for America or the World as a whole and the automotive industry got killed.
Unfortunately, it’s not over yet! Here’s a headline and an article that came across the New York Times this morning:
Treasury Expands Possibilities for Aiding Auto Industry
According to the article, “The Treasury is giving itself room to provide money from the Troubled Asset Relief Program beyond loans already committed to General Motors, GMAC and Chrysler.
That would make suppliers like Delphi, a former parts unit for G.M. that has filed for bankruptcy, eligible for assistance. The guidelines may encourage more guessing on what companies and industries are next, said Vincent Reinhart, resident scholar at the American Enterprise Institute in Washington.”
The article goes on to say, “The bailout was originally intended to buy assets from banks and has instead become a fund for the Treasury to prop up lenders, insurers, carmakers, auto finance companies and, now, any company that may be important to those industries.
The Treasury has already provided $6 billion in aid to GMAC, the financing arm of G.M., and up to $17.4 billion in financing for G.M. and Chrysler, using money from the $700 billion rescue package.”
Personally, I don’t have a great deal of sympathy for the auto manufacturers. I assist my clients in buying, selling, leasing and trading in every make, every model and every price range of vehicle types. I help many of my clients get new vehicles or save them more money on buying or leasing a used vehicle, so I work with people everyday to see what they really want. the problem I see is that the automobile manufacturers have not been innovative to give the consumer more choices in the marketplace. There are plenty of product choices in the way of models, shapes and sizes, but I’m talking about going beyond the gasoline engine. Why would you as a manufacturer ever put your business into the hands of a third-party like the oil tycoons and give them the control to sway sales of your product, but that’s exactly what automobile manufacturers have done and continue to do.
Imagine for a minute if the computer manufacturer stopped innovating or even crazier, if they were to put their livelihood into the hands of a third-party. What if Apple computer had never created the iPod, the iPhone, iTunes, the MacBook and just continued to sell their desktop computers because that’s what they knew how to do? Apple would have been a blip in history instead of a successful technology company.
Think about what they did though and compare that to the automotive industry. Apple controls their own operating system. When you buy an Apple computer you get their technology to drive the computer. When you buy an iPod you have to use iTunes and they control that product, but what if they had created the iPod, and allowed a outsourced the iTunes to a third-party to drive the product? That third-party could charge a monthly fee, change prices for downloading music and before you know it the sales of iPods would be controlled by the third-party the same way that the oil industry ultimately affects the success of the automotive industry.
In my opinion this is one of the biggest problems facing the automotive industry. If they don’t have a paradigm shift in the way they create and manage their product, by putting the fuel source that drives the vehicle into the hands of the dealers, manufacturers or better yet the consumer, they will continue to have the fluctuation on oil prices controlling their sales. They’ve known about this problem for decades, since back when Jimmy Carter was President, but they continue to do the same thing over and over without ever looking at the problem with their business model. Gas prices are low now, but they could spike again this year and send the automotive industry into a greater tailspin than last year. This is in addition to the cost of healthcare, dealing with the Unions and other problems that the media focuses on. However, if you build a better mousetrap and have control over the cheese you will have a stronger position in the marketplace and people will come to buy your product because they want what you’ve created. It will be very interesting to see what 2009 holds for the automotive industry.
I’m looking forward to 2009 and I’ll continue to assist my clients in getting the vehicles they want at the prices they want with the features they want. I plan to introduce some new services and features at CoolCarGuy.com, I’m writing movie reviews at GoblinNetwork.com and I’ll be writing some automotive articles there as well. I also plan to put on some workshops in 2009 with a client of mine to give people some ideas on how they can fund their vehicle on their own and never have to use a bank again for their car purchases. This will be exciting!
Happy New Year!
Thanks again for visiting CoolCarGuy.com and I hope you have a great and prosperous 2009!
Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant with JFR & Associates in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! firstname.lastname@example.org