In my original post I mentioned that I thought that part of the car companies on going

problems included the fact that they had given up on leasing which was a significant part

of their business.  This week there was a article mentioning that Cadillac was going to

begin leasing again in an effort to bolster their sales.  So at least in part I was on the right

track.  But on to other items.

 

How much trouble will the Democrats find in next years elections?

 

My observation is that it will be significant if current events continue as they are.

 

16 million when you consider those whose benefits have expired and those that have

just given up.  The issue is that the administration is doing nothing to foster the

creation of new jobs.  The shovel ready jobs they have funded have only created work for those people in the industry who come and go as work is started.  What about the

tens or hundreds of thousands of jobs that were lost in the financial services area.

Those jobs are for the most part gone forever and there is nothing filling the void.

So come election time unemployment will loom large over the ballot box.

 

2.      Another factor will obviously be the debt which will only be larger my then.  The

vast majority of the populace is outraged at the direction the administration has taken

with spending and incurring debt which goes far beyond our ability to manage or

retire.  We are destroying those values which made this country strong.  Between the

assault on capitalism,  individual freedoms, and the unwanted expansion of government into our lives a majority of voters will display their displeasure at the

polls next November and a large number of incumbents of both parties will find themselves out of a government job.

 

3.      Prior to the presidential election I made the following remark when asked about

Obama “as an individual I have no problems with him, however the Democratic

party agenda will destroy this country”. Now I do have problems with him and

the agenda is doing just what I predicted.  Among the things that a vast number of

people are upset over are the arrogance, hypocrisy, and bold lies that we see

demonstrated each day in Washington D.C.  President Obama stands in front of

the American people and believers we will believe him and follow like sheep, and

when tens of thousands amass in Washington in protest he shrugs it off as and few

kooks.  He needs to be reminded that for each person who showed up that day there

was a thousand more at home watching and supporting those individuals.  We hear

from Congress each day speeches which wallow in hypocrisy, and we hear it and

see it for what it is and will remember nest November.

 

So as we go forward it would be wise for the residents of the Senate and the House to

listen to their constituents who are telling them that they are out of touch with reality.

Let them go forward with Cap and Trade, Medical insurance reform, and the rest of

their agenda with fair warning that come November they are out of work.

Tuesday, May 12, 2009

Much has been said recently about the goings on at Chrysler and GM, none of which has been flattering or confidence inducing.
The battering of the principle of contract law by the administration would leave one to believe that only the foolish would invest
in the corporate bonds of these companies.  On the same train of thought what financial institution would lend money to these
corporations at any interest rate?  What good is a high, profitable rate if you cannot count on the administration keeping hands off.

It is also questionable just how good Obama was to the unions, after all  is said and done, with the unions owning 50% of
Chrysler they will be the ones making the decisions to lay off their own members, and deciding what plants to close.  The rank and
file will not be happy either way.

These however are the larger, out in front issues.  There are a couple of points worthy of discussion.  The first, which has been in
the back of my mind for several months and is important to the idea of whether or not these companies can survive.  If you will
recall, back in the summer of 2008 the Detroit automakers announced that they were terminating all in house leasing programs
because they have been losing millions of dollars each year leasing.  If I recall the numbers were between 20-30% of reported sales
were from leasing.  There was an article in the WSJ at the time that quoted one west coast dealer who said he "sole 200 cars" in
the last days of the program.  The point here is that somewhere in the range of 3-4 million cars sold by Detroit each year are gone
because people who could not afford large car payments used the lease program to drive new cars.  And now that credit is tight and
unemployment is rampant, there is no demand.

On the West coast of Florida is an auto group which has 21 brand offerings across 19 stores.  I have been told that last month
they sold 500 cars over the entire operation.  I do not believe that this is nearly enough to support such a large organization.  The only thing that is helping is that most of the sales are from Cadillac, Infinity, Porsche, Audi, and VW.  The wealthy are not supporting the
domestic market.

And we have not begun to discuss what Detroit will build in the future that people will  want to buy as well as be able to afford.
Certainly not a $50,000.00 Volt.

And lastly, while Detroit certainly did most of the damage themselves, the folly of the sub prime debacle was the tremor that
brought it all crashing down.

B. Dod