NY Auto Show: It's Not The Economy Stupid!

Posted by: David Kiley on March 20, 2008

I don’t want to say that Chrysler LLC vice chairman sounds like Fox News Circus Clown in Residence. I have a lot of respect for Jim. But when asked about the economy and market volatility and plummeting consumer confidence, Jim suggested that the best thing folks could do is “stop reading the newspapers.”

Just as Circus Clown Hannity (CCH) often repeats that Michigan is a one-state Recession with a straight face, Press thinks the overall economy is “very sound.” It’s the news stories about the lousy economy that is feeding paranoia and unrest.

Hmmm. What came first…..the lousy economic indicators or the news stories that covered them?

Reader Comments

Noz

March 20, 2008 12:15 PM

Kiley, in your stated opinion of that of Jim Press, you are the clown. Check the looking glass. If the only 'news' one hears/sees for a few years is negative, sooner or later even the micro-brained come to believe it. Sadly enough, over sufficient time with sufficient boosting by the largely left-wing media, things take a turn for the worse.

Realize that we now have at least two generations of semi-literate know-it-alls wandering our streets. Many were taught by those with similar intellectual deficiencies, they knew no better and thus passed it on to the putty-like minds of their charges. We are reaping this now as can easily be seen in listening to their inane sound-bite arguments in support of both Billary and Obama and their mad-cap siren songs of higher taxes, bigger government, more massive programs to 'help the poor', and of course retreating from Iraq.

You have heard of self-fulfilling prophesies, well, we are living one thanks to the lefties. Exactly what their point is in dragging down our nation, indeed the world economy, is beyond me. Conservatives are not bent this way...

Mike

March 20, 2008 5:15 PM

BusinessWeek has a left-wing nut blogging for them?

44 mpg (in the US) by 2010

March 21, 2008 2:53 AM

44 mpg – Would it make a difference?

Is the housing market and mortgage market the culprit in OUR current economic down turn?

I did not think so!

In 2003 petro-fuel price were under $1.70 per gallon and about 60% of that fuel was imported. Today that gallon is about $3.60 and still 60% of that oil is imported.

At today's prices and with current vehicle fuel economies it can be estimated that about $0.4 TRILLION PER YEAR (at current prices) is consumed JUST PURCHASING petro-fuel that is derived from nondomestic sources. About 3/4 (75%)of that or $0.3 TRILLION PER YEAR is US DOLLARS ... EXPORTED to pay for that imported oil ... AND ... therefore, permanently removed from the DOMESTIC economy, no long available for purchase of domestic goods and services by the US consumer (unless brought in by a foreign investor).

Put on top of that, the decline in Detroit3 production and sales volume (in the range of 28% since 2004) coupled with 100 to 200 thousand reduction in their manufacturing headcount due to downsizing and outsourcing.

I believe these are the TRIGGERS for the housing market and economic down turn.

Further, Detroit 3 failure to aggressively address vehicle fuel economy is a key contributor to their slide in sales. Case at point ... IF you could buy any large vehicle with 100% improvement in fuel economy from the Detroit3 would that manufacturer's sales continue to decline? I suggest those sales could prossibly double, maybe even triple unless production limited. What would that do to their employment picture?

44 mpg – Would it really make a difference?

Reduced Domestic Oil Consumption: Some of its Snowballing Benefits

Reducing domestic oil consumption will divert capital from paying for foreign oil imports to injecting those funds into the national economy, and will help reduce the strain on the global demand for oil. This is both an economic incentive as well as a strategic imperative for improving international relations. Focusing on the oil consumption of domestic light vehicles, the following will show some of the major potential benefits that are possible.

IF the US could/would build and put on the road 20 to 30 million 44 mpg (or more) combined average vehicles per year for about 8 years and then scale production back to sustainable replacement levels over the following 5 years ...

as you read this keep in mind that by 2022 petro fuel may cost well above $4 per gallon.

On average these high mpg vehicles would save the "average" owner about 700 gallons of fuel per years compared to the average light vehicle available in the US market for 2008. Use your own cost per gallon and see what that means to you and your family budget.

It appears that this fuel cost savings at $4/gallon (assuming no increase in price), for the average owner, would pay for a $20,000 vehicle in about 7 years of use.

There would be industrial expansion and jobs.

These vehicles would, by their very nature, have very low CO2 emissions. And, as a result, would be much more compatible with world emission standards and therefore more easily exported. At present exchange rates, that is a potential opportunity for even more jobs further improving both employment and balance of trade.

Automotive fuel consumption would be reduced by about 50% (or more) ... putting money (up to about $3,000 per year @ $4/gallon ... or more depending on the price of fuel) into the US consumers' pocket to spend on "domestic" goods and services (including fuel efficient vehicles).

The large reduction in fuel consumption could free up 40% of domestic refining capacity which, in turn, allows decommissioning of excess capacity (probably obsolete or “at risk” facilities).

Money injected into the domestic economy generates not only potential for new profits but also new tax revenues to pay down National Debt, now approaching $9.5 TRILLION. At $4/gallon the injection potential is about $0.8 TRILLION PER YEAR at 44 mpg combined average. Please let the economists figure out the annual rate of National Debt reduction for US.

Oil imports would ultimately be reduced to near 0% ... saving ALL of those EXPORTED $$$$ traditionally used to pay for imported oil ... improving National Security by reducing or eliminating oil imports. Obviously balance of trade is improved further as a result.

Petro-Fuel Price Driven Inflation would be reduced to a minimum. The oil speculators will "JUMP" out of the market as soon as this type of plan appears to have a chance.

Ooooh ... by the way ... burn half the fuel and get half the emissions ... a cleaner environment.

With everyone working at meaningful jobs, would there even be a mortgage/foreclosure crisis? Bear Stearns might not have gone under.

With expanding employment ... OUR young people may develop a stronger sense of hope for their futures because of the visible opportunities.

There is more ... but you get the idea.

Both Bear Stearns and the Iraq War (with ALL its’ casualties and wounded plus the $0.5 TRILLION, or much greater, cost to date) are each big problems ... but this maybe much bigger ... the 2 ton gorilla under the SHAMROCK, so to speak.

Has Congress, the President, the auto industry, or anyone even attempted a solution to recover the $0.8 TRILLION (at $4/gallon and 44 mpg) that is REMOVED from the US economy annually by high fuel consumption vehicles? It appears, in fact, they have not even acknowledged this loss to the economy and its' origin publically. Possibly they have not even considered this “circular logic” and what it implies.

What should our NATIONAL PRIORITIES BE?

You will have to draw your own conclusions.

Noz

March 21, 2008 12:10 PM

No Mike, a left-wing nutcase writing for B/W with the initials DW, and I do not mean David Welch!

MarkVanPatten

March 21, 2008 3:36 PM

Stop reading newspapers?

So he is admitting that the auto buying public reads newspapers?

If the car buyers read newspapers, perhaps car makers should consider running their ads there?

Disclosure: I work for a newspaper.

Noz

March 22, 2008 5:27 PM

Sorry Mike, I clearly meant YES in my above comment. Our friend Kiley is one of those left-wing sickos. In his BW article MAR 31 p19 he missed a great opportunity to hype Nuclear Power Generation, our only way out of the nasty pit Gore and his buds have created and most have fallen into.

Nuclear is safe, clean, very cheap, and doing well in both France and Japan, elsewhere as well but not in the same numbers. And a lot of this with US technology rendered illegal under that fat-headed/fat-arsed Big Bad Al Gore. And I should add that the so-called Nuclear Waste is reprocessed and put back to work then the greatly shrunken residue is safely disposed of. and there is no need for 10,000 years in Yucca Mountain, just 30 or 40 or so. Ours is now piling up, stored outside where the terrorists can get at it. Thanks again, Gore and Harry Reid.

Eideard

March 23, 2008 4:17 PM

Warms the cockles of my heart to see that reactionary nutballs who Comment at BusinessWeek are as unlikely to bolster their opinions with fact - or validate their invective with historic accuracy - as elsewhere.

docinbox

March 24, 2008 8:50 AM

My next car will be electric - not hybrid but plug-in. Maybe Chrysler should consider making one instead of worrying about what I read.

Mark

March 28, 2008 7:24 AM

I agree with Docinbox's comment "Chrysler should consider making electric Car", this would really pepp up the market with palyer's like ZAP !

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