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Monday, October 11, 2010

Action is the Word

If you take the words hire, employ, sell, consume, purchase and buy and make a simple adjustment, the economy moves off the dime it has been sitting on. Our economy has not moved. It is not getting worse and it is not getting better. And Washington is taking the heat for good reason.

Here is the simple adjustment but it reflects action: hiring, employing, selling, consuming, purchasing, and buying. If we put some action into these aspects of our economic recipe things get better fast.

No, the recession is not over. I do not agree with certain experts that the recession stopped in June of 2009. I know better. I saw it with my own eyes. I was in Detroit that first week of June 2009; it was UGLY, very ugly. General Motors and Chrysler both fell over hard and unemployment was at unprecedented levels in Michigan and beyond.

Now, I agree that the recession started in December 2007. It hit full-speed with four buck gas in the summer of 2008, and continued right into September with the financial collapse and the demise of Lehman Brothers. The Automotive Industry, already deeply wounded by a confused and jittery public that summer, had SUV’s and trucks galore gathering dust as that aspect of the market went bye-bye at lightening speed. Dealerships could not even give away gas hogs. The business was soon on life support.

But we are a resilient bunch in the car biz. We will come back. We have weathered recessions in the past. 1958, 1962, 1966, 1973-74, 1980-81, and 1991 were tough years. We had a great stretch from 1992 to 2007… record years for gosh sakes. But this newest recession, 2008-2009, was extra special. It knocked us out with a left and right hook and we saw stars as we hit the economic canvas.

Consumer and hiring confidence are the keys to our country getting permanently out of this mess. I know there is cash out there. But people are sitting on it and paying off their charges. Businesses have cut payroll and cut hours. Raises are on the endangered list. Is it a wonder that we are still refusing to buy like in the good ole’ days of zero percent and $1.68 gas?

Detroit, Ford Motor Company in particular, is making great small and medium-sized cars and solidly built larger vehicles right now, but there is less revenue and profit overall. Trucks and SUV’s are selling somewhat better but with much tighter margins. The car business still has the challenge of debt to deal with.

A critical month for the car business and for the American public is the next one. November, 2010 will set records for political change. This change can only help bring an array of positives to this challenging climate. A number of politicians will soon understand what being out of work is all about.

Things should get better fast with new faces in places of political power. I plan on this renewed confidence to steer holiday purchasing. In fact, a friend of mine, much smarter than me, calls 2011 the “Year of the Come Back!”

Let’s get this industry and this economy back to employing and consuming. It is the kind of action we all really need.

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