Tuesday, February 10, 2009

Where's Pauly's Bailout?

"Auto companies churned out oversized gas guzzling pieces of shit that no one wanted to purchase, so since those fat cats are lining up for a juicy government hand outs, I figure here was my chance to get in line behind homeowners with bad credit that never should have gotten loans in the first place..." Pauly


I realize this is the popular wisdom right now, but it's just plain wrong.

I don't know why people think that American car manufacturers suddenly stopped selling cars because all they do is "churn out oversized gas guzzling pieces of shit." But people do. Why is it that conventional wisdom is usually wrong and always overly simplistic?

In this case I guess it's because the auto slump coincided with surging gas prices. But sales were still pretty good, even when gas got up to $5 a gallon. Gas rose steadily over 5 years. But things really didn't start to get nightmarish for car makers until gas dropped down to HISTORIC lows, around $1.30 a gallon. So that can't possibly be it.

Yesterday it was announced that Nissan, who was projected to make over $1 Billion last year actually lost almost $3 Billion. Now how do GM and Ford's "gas guzzling pieces of shit" affect Nissan's performance?

People just STOPPED BUYING CARS. ANY CARS. The crashing economy scared the shit out of everyone. "Shit, my 401k just lost $300,000" isn't the kind of thing that inspires people to go out and drop $40K on a new SUV.

Every single car company is suffering. Only Subaru and Hyundai were profitable last year, and their market share is minuscule. Hell, Subaru produces ONLY all-wheel drive cars that get terrible mileage. They market solely based on safety and horsepower.

And if people stopped buying new cars, how are they surviving? They're driving their cars longer than they have. Because they are NOT "pieces of shit." They are built better and drive longer than any cars in history. It's actually the quality of the cars that's working against the automakers now. Maybe if they actually did make pieces of shit, they'd have more business.

And as far as "big gas-guzzling" vehicles, why do you think automakers produce them? Do you think automakers determine what people buy? NO! Automakers try to figure out what people will buy, then they try to make them. But it takes around 5 years for a domestic car manufacturer to get a new model on the road. Foreign auto builders can do that in 3 years, but again most of them do not produce the volume of GM and Ford. That flexibility gives the foreign makers an advantage in the short term, but too many snap decisions based on the current market can be more costly.

Decisions made in the last couple of years based on artificially high gas prices could help the industry, but since the "American Auto Buying Public" only seems to ever buy GIANT GAS GUZZLING DUELY PICKUPS AND SUVS, it could actually be a DISASTER. Drive down the street in any town and look at the ratio of giant vehicles to small fuel efficient models. It's overwhelmingly SUVs, Pickups and Mini-vans. Nearly all with one passenger in them.

Americans don't buy their cars based on what they "need." They buy based on what they "want." I want something BIG and STRONG. I want to be able to tow a boat, if I ever buy one. "What will I do with my hypothetical boat if I buy a Prius? Answer me THAT!"

11 comments:

StB said...

You forgot the part about government dictating to the auto makers what kind of cars to build. It goes against what people want to buy.

DuggleBogey said...

I'm not sure I forgot that, but I agree that's true.

Predator314 said...

the US auto industry failed to adjust, plus they the union is inflating the costs to build a vehicle. I'm not saying the union is a bad thing, but the cost of a vehicle is the reason I'm not buying new ones. $40K for something that if you're lucky will last 8-10 years. Fuck that. It's just un-necessary.

I'm just saying that if that this "going green" and "more fuel efficient" doesn't help if the average person can't afford $40K to blow on these turds. I'll pay $10K for a used gas guzzler with 50K miles on it instead.

I'm rooting for the collapse of the auto-industry and the banking industry. America needs hard times right now. We've lost our identity and it's time to get back to basics.

Fuck, I should have saved all of this for a blog post.

DuggleBogey said...

I don't disagree with any of those things but NONE of them explain why people suddenly stopped buying cars. Those things have ALWAYS been true, but until recently people didn't have a problem with it.

Those reasons can't be why, because nothing in what you're saying has changed.

DuggleBogey said...

And root for your OWN goddamn hard times, I need my fucking job.

Predator314 said...

lol, i created my own hard times.

I can only speak for myself here, but I used to be one that thought nothing about spending $40K on a vehicle. I have one sitting in my driveway right now..it's 8 years old right now, but I still paid $40K for that bitch.

My problem is I realized how stupid of a purchase it was. Sure, having a nice ride is great, but totally un-necessary. I guess I grew up and Americans are growing up as well as a result of the economy.

My point is that Americans have lost touch with reality. We have been living in this fast-paced business oriented world where kids are being babysit by teachers in government schools and they are turning out to be idiots. The American family is almost dead. How often does the family get together for a nice meal or picnic these days? Hardly ever. Everyone is too busy making these important calls on their blackberries, making sure they can cover next months cell phone, cable tv, internet, gym membership, vehicle payments,etc to sit back and enjoy life.

Remember when Christmas was about family and not about the latest video game system or Tickle my Elmo? Some things are more important than cars or toys.

DuggleBogey said...

I'll post what I think about the concept of "family."

I'll wager it's a different take than you have.

pokerguy2200 said...

The next time you see a "family" out eating together, notice all the kids texting on their phones while Mom and Dad talk on theirs. What makes you think "having dinner together" at home would be any different.

DuggleBogey said...

You guys are seriously talking about other peoples' families not acting the way you think families should act? As if how someone else's family acts is any of your business?

StB said...

Seems to be more bitching and moaning about the American family than why people stopped buying vehicles. More bitching about what is wrong than what they are doing to correct it. Sounds like the people bitching are more of the problem than the solution.

Why did people stop buying cars? Fear. Consumers are frozen. The headlines are gloom and doom. The president tells us we are on the brink of economic disaster, some needs to be done to avoid catastrophe or our system will collapse. Does that inspire you to go buy?

Politics of fear are being used once again. Now with jobs being lost, people are saving more. Those who never did save cannot afford to buy anything. Those of us who did can and are buying. I just don't need a new vehicle.

SirFWALGMan said...

What the hell is wrong with spending 40K for something that last over 10 years. Jesus. That is like lunch at work for a year. I have no problem with that. Of course I have always shown a great disdain for money.

I bought an American gas guzzler with a ton of space not because I love the gas prices but because it fit all the kids stuff in it and made the wife and I feel safer if the kids got into an accident. My Subaru just died after like 12 years. I will probably go for a smaller car for myself.

Seems like most of the problems with companies today go back to bad management decisions. Everyone living high off the hog in good times and not planning ahead at all. That has to be worth millions in salary every year right?