Saturday, December 27, 2008

A Look Back at 2008

Thank God 2008 is almost over.

There were many good times in 2008.

We had some tough times as well -
(About an hour each day wasted zoning out right here).

May much fortune rain upon the retail automotive
industry in 2009 (Please God).

Maybe we should ask the Blue Genie.

Ah, Time for another glass of good Merlot


Tags: Automotive Finance F&I Finance & Insurance
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Back in 1929 Financial Crash it was said that some Wall Street Stockbrokers and Bankers jumped from their office windows and committed suicide when confronted with the news of their firms and clients financial ruin. . .

Many people were said to almost feel a little sorry for them . . . . . .

In 2008 the attitude has changed somewhat:

Happy New year!


To measure a "well-run" automotive F&I Department, visit:

Wednesday, December 24, 2008

Turn off the damn TV in the waiting room!

By: Dealers Edge

We are being bombarded with analysis - much of it trying to predict when we will bounce off of the bottom of this painful recession.

Earlier in December we hosted a Web Conference that featured seven of the brightest minds in dealership fixed operations. These seven experts spent 30 minutes each offering their best advice for how to cope with the recession as a service manager. Over 700 locations registered for this event and their post-Webinar comments were almost universally enthusiastic.

In his presentation, one of Ed Kovalchick's recommendations was for you to "Turn off the damn TV in the waiting room."

Ed went on to explain that most often the TV is tuned to a cable news channel and that could only depress your customers even more as they waited for their vehicle to be serviced. Great advice! (He further suggested that you play DVDs of classic movies instead.)

For most news outlets, it's not news, unless it's bad news. I am a "glass half-full" guy and while I like to be well-informed, I am also very skeptical when listening to pundits and other so-called experts as they attempt to predict what the most savvy economist will tell you cannot be predicted.

So it is with that caveat that I offer to you some economic analysis from one of my favorite economists- Brian Westbury is the Chief Economist with First Trust and is often seen on business news shows and quoted in newspapers and magazines. I like him because he is not always so negative and within my limited ability to understand what economists are saying, he makes sense to me.

But that is only my opinion - you make up your own mind. Westbury recently wrote and article entitled, "We Are the Catalyst," exploring the concept of an event or happening that will signal the reversal of the downward spiral the economy appears to be in.

It's an interesting take on the current state of affairs and I invite you to read it for yourself. Westbury's- "We Are the Catalyst" While you are on the First Trust Website, you might want to look at a couple of videos at "Westbury's 101." The first is dated from December 3rd and is entitled "Perspective on Recession."

Link to "Perspective on Recession" (You may have to click on the link by that title once on the page.) The second is from December 12th is titled "Retail Sales Show Bounce in Velocity."

Both short video clips offer some insight into our present down-turn that you are unlikely to here while watching the mainstream news shows. To view "Retail Sales Show Bounce in Velocity"

I know there are plenty of economists that will take the same data and project an opinion 180 degrees from Westbury's. But it is good to know that someone has a bright outlook.

And please take Ed Kovalchick's advice - "Turn off the damn TV" - at least until next Monday.

Merry Christmas to all and to all a good night.

Good Stuff.


To measure a "well-run" automotive F&I Department, visit:

Tags: Automotive Finance F&I Finance & Insurance
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Wednesday, December 17, 2008

Backseat Driver - Let's Bail Out GM

A Good Article by Jerry Flint

Let's stop kidding ourselves. If General Motors is going to survive in the U.S., it will need government-guaranteed loans. Just between us capitalists, is there anything wrong with that? In 1980 we guaranteed $1.5 billion of private loans to Chrysler, which was much smaller than GM is today. The government made $400 million on the deal.

We're lending $120 billion to an insurance company. There's $700 billion set aside for banks and others whose leaders enriched themselves while ruining their companies and our economy.

The leaders of GM have made their mistakes--plenty of them--but they didn't enrich themselves beyond decency as those other executives did. Today's economic problems, brought on by subprime mortgages, credit default swaps, a credit freeze and a stock market collapse, were caused by those other folks.

We need to decide if we want a domestically controlled auto industry. We won't run out of cars. Toyota (nyse: TM - news - people ), Honda (nyse: HMC - news - people ), Mercedes and BMW will make sure of that. But the auto industry created the American society we know today. If this industry can't survive, what can?

We might ask ourselves if Japan would allow Toyota to go down in these circumstances or if Germany would let Volkswagen (other-otc: VLKAF.PK - news - people ) fail. We should also ask whether those foreign companies will build the tanks and trucks that we might need someday.

A collapse of GM would bring a huge job loss, close to 100,000 people on its own payroll, plus hundreds of thousands of others in dealerships and supplier industries, heavily concentrated in the Midwest. We'd pay a price for this in unemployment insurance, medical costs, the squeeze on schools because of tax losses and all the things that go with such devastation.

By now I am sure most of you realize the seriousness. GM could be out of money by the middle of next year. GM has successful operations in Europe, Brazil and China, but sacrificing them to save the American business would fail and would destroy chances for a future recovery.

At the same time it was enacting the bailout legislation, Congress approved a separate $25 billion package for the auto companies in Detroit, but that is only for retooling 20-year-old factories, and I doubt if any of that cash will get passed out for another year. GM needs money now to keep the business running until the tide turns.

There is talk of some sort of GM-Chrysler combination. All this would mean, as far as I can see, is that more factories would have to be closed, more workers laid off, more auto dealers be allowed to collapse.

We owe GM some help. The company helped save this country in World War II. GM paid such great wages and benefits that an entire middle class of workers was created. And it built some great cars.

Maybe you're driving your Mercedes to work and you're thinking: "What has GM done for me lately? We're not a manufacturing economy anymore. We're technology, service, finance. Let those autoworkers, who make too much money anyway, get jobs at Wal-Mart (nyse: WMT - news - people )." But when GM gets killed, it's bad for business everywhere, and we're supposed to do something about it.

Taxpayers should get stock warrants so they win if GM turns around. There should be some sacrifice by the workers whose jobs we would be saving. (Workers gave up $1 an hour in the Chrysler deal.) We should make sure that loan guarantee money does not get moved into union funds, such as the one that GM has promised the UAW in return for taking over health care costs.

The biggest question is the management and board of directors. This company has been sinking for decades, losing market share year after year, building cars that didn't match those of foreign competitors--who build them here, too, by the way. I would demand a new board of directors for sure, including some people who know something about the automobile business.

GM has finally woken up, at least as far as the vehicles go. The new cars and trucks coming off the lines are among the best. But this management doesn't inspire anyone. It will take a great leader to bring GM back to prosperity, the way Lee Iacocca saved Chrysler and, a few decades before that, George Romney saved American Motors.

Now, you may find even this small dose of socialism to be intolerable. You may think taxpayers have no responsibility to save private companies. But General Motors (nyse: GM - news - people ) needs help if it is going to survive in the U.S. It's about time that GM executives admit this and ask for that help. What's good for America is good for General Motors--and vice versa.

Jerry Flint, a former Forbes Senior Editor, has covered the automobile industry since 1958. Visit his homepage at

Tags: Automotive Finance F&I Finance & Insurance
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