OK so it's changeover time in the Auto industry so how about another little scare.

[fromderinside]

After Years of Growth, Automakers Are Cutting U.S. Jobs

https://www.nytimes.com/2017/07/04/business/automaker-jobs-trump.html

Scares ya huh?

Read the title of the thread. Every year in June and July the auto industry retools for the next year so some production people are put on summer furlow. Some bright enterprising soul looked at that and saw an opportunity to scare us a little more by linking a periodic turn down in sales and a seasonal labor lull into a Hair on Fire.

I wonder why some think the press is sometimes in it for the money and readership more than for the actual news.

Or, maybe business news is just a bunch of Kramers.

 

[hurtinbuckaroo]

Did you even read the article? Did you notice that the employment comparison used April numbers, not June/July? Do you really think people who write about the auto industry don't know about retooling? Does six months of falling sales have no significance?

 

[fromderinside]

Yeah I read it. What I see is that the pit in sales over the Bush recession has been taken up by higher sales on top of an increasing number of cars per year. We should be at about 16 million cars a year but we got to 18 million in 2016 as the soak up of demand was being completed for the period from 2006 to 2010. Now there are layoffs for the coming year and there is a new target of about 16 million cars increasing to 17 million over the next five years as I see it. We aren't trending to recession, but, a July normal large temporary layoff is going to scare people with after the fact incomplete articles.

All I'm suggesting is that news people take their responsibilities seriously and not be putting freight masks on their stories.

I'm not a news man so I took liberties.

News persons don't have that luxury if they want their institution to appear reliable and stable.

I understand it is the headline writer's job to attract readers with catchy bits drawn from the story. Unfortunately the story doesn't moderate that headline like it should.

Oh, and to your point about 6 months of 'falling' employment due to lower sales the sales fall was from about 16.6 million to 16 which I think is near where the sales will end up for this year and the employment probably reflects a bit of exuberance earlier.

 

[ZiprHead]

My father was a GM electrician. He worked his ass off during changeover. Sometimes more than seventy hours a week, some of it pulling 000000 cable.

 

[Horatio Parker]

My father was a GM electrician. He worked his ass off during changeover. Sometimes more than seventy hours a week, some of it pulling 000000 cable.

Depending on the plant, changeover isn't always a big deal. I worked summers in an engine plant, and changeover was done over a weekend, no layoffs. Final assembly might be off for a month. Maybe the companies now milk them when times are slack, but they didn't in the heyday.

Auto sales and lending for autos are both trending down.

 

[Lumpenproletariat]

Oh NO! more layoffs! It's the END OF THE WORLD!

Why do we have to keep falling all over ourselves feeling sorry for laid-off auto-workers?

If we don't need them in those factories anymore, then let the spoiled brats change careers. Put themselves somewhere in the economy where they're needed. When we will finally get tired of their constant whining?

ditto the steel-workers. And other uncompetitive crybabies.

 

[ZiprHead]

Ah, good ol' Lumpy. Here again to remind us that workers should be treated like used toilet paper.

Does your inhumanity have any boundaries?

 

[Jimmy Higgins]

Did you even read the article? Did you notice that the employment comparison used April numbers, not June/July? Do you really think people who write about the auto industry don't know about retooling? Does six months of falling sales have no significance?

Anecdotally, I bought a car in 2012. When looking at used cars, the prices were very high and only once a used car had serious miles (over 100k), did the price drop.

In 2017, I finally replaced my 2000 Insight. The used car market (same dealership) was much cheaper, for lesser used cars. I got a fully loaded 1 yr old car with 20K on it, for $6k less than the original selling price. Back in 2012, that car would have been about $1k cheaper.

Sales are definitely down.

 

[Keith&Co.]

If we don't need them in those factories anymore, then let the spoiled brats change careers.

Lumpy, who exactly do you imagine to be the 'we' in that sentence?

I mean, if your 'we' is the general population of the United States, then that 'we' would include those auto workers.
If your 'we' includes the current President of the United States, he has been saying 'Jobs Jobs Jobs' for most of the last two years, so he 'needs' those people to be employed.
Does the 'we' include the people who own businesses near the auto plants, the people whose bottom line depends on the workers bringing home disposable incomes to spend in the businesses?

Who's 'we,' Lumpy, and how do you qualify to be one of the we?

 

[Horatio Parker]

Did you even read the article? Did you notice that the employment comparison used April numbers, not June/July? Do you really think people who write about the auto industry don't know about retooling? Does six months of falling sales have no significance?

Anecdotally, I bought a car in 2012. When looking at used cars, the prices were very high and only once a used car had serious miles (over 100k), did the price drop.

In 2017, I finally replaced my 2000 Insight. The used car market (same dealership) was much cheaper, for lesser used cars. I got a fully loaded 1 yr old car with 20K on it, for $6k less than the original selling price. Back in 2012, that car would have been about $1k cheaper.

Sales are definitely down.

Also, the used car market was inflated by the cash for clunkers program. That may have run its course.

 

[Jimmy Higgins]

Anecdotally, I bought a car in 2012. When looking at used cars, the prices were very high and only once a used car had serious miles (over 100k), did the price drop.

In 2017, I finally replaced my 2000 Insight. The used car market (same dealership) was much cheaper, for lesser used cars. I got a fully loaded 1 yr old car with 20K on it, for $6k less than the original selling price. Back in 2012, that car would have been about $1k cheaper.

Sales are definitely down.

Also, the used car market was inflated by the cash for clunkers program. That may have run its course.

The other part of the anecdote was that the dealership was selling cars that hadn't even arrived yet in 2012. In 2017, there were cars available on the lot in the same model. Car sales are dropping, generally because the new generation can't afford cars because corporations are too busy subbing jobs for Temp agency positions and the like.

 

[bilby]

Did you even read the article? Did you notice that the employment comparison used April numbers, not June/July? Do you really think people who write about the auto industry don't know about retooling? Does six months of falling sales have no significance?

Anecdotally, I bought a car in 2012. When looking at used cars, the prices were very high and only once a used car had serious miles (over 100k), did the price drop.

In 2017, I finally replaced my 2000 Insight. The used car market (same dealership) was much cheaper, for lesser used cars. I got a fully loaded 1 yr old car with 20K on it, for $6k less than the original selling price. Back in 2012, that car would have been about $1k cheaper.

Sales are definitely down.

Here in Australia, the bottom fell out of the used car market about a couple of decades ago, and never recovered. We haven't had a recession here since 1997, and we have a high minimum wage and low unemployment; so most people are generally pretty well off. The mainstay of the used car market was teenagers buying their first vehicle, and changes to the laws prohibiting P plate drivers from owning cars with large engine capacities and power outputs have meant that these first time buyers are looking at the small car market, where a brand new car can be had for $12,000, including a manufacturer's warranty, and with the expectation of low or no maintenance costs.

It's difficult to find buyers for second-hand cars, with an unknown driving, maintenance, and crash history, when a new car can be had for so little; Interest rates are close to zero on car loans, so a buyer would could afford to pay a few grand cash for a used car, can readily afford to finance twelve grand for a brand new vehicle.

Young drivers who can lawfully drive more powerful V8s and the like often find that the insurance prices them out of the market for a second hand SS Holden, when the cost of ownership for a brand new Hyundai Accent is far lower, and the sticker price is similar at around $15k.

As a result, you can now buy a very nice used car for a tiny fraction of the sale price when new; and modern cars are far more reliable in the long term than older models, so there's little incentive to turnover ownership amongst people who already have a car. I bought my car brand new, and knowing that I cannot possibly get what I paid for it if I sell it, I will keep it, and not buy a new car. People who used to buy a new car every couple of years are now keeping their cars for five or ten years. That pushes down the demand across the entire market for cars - and particularly in the market for new cars. Which pushes new car prices down even further. Which in turn, pushes down prices people are prepared to pay for used cars.

(all prices are AU$)

 

[Lumpenproletariat]

When we babysit uncompetitive autoworkers, low-income consumers have to pay the cost with lower standard of living.

Ah, good ol' Lumpy. Here again to remind us that workers should be treated like used toilet paper.

No, just that they (and auto companies) should not be subsidized at the expense of consumers, who are treated like used toilet paper when they are forced to subsidize uncompetitive auto producers (with higher prices).

Does your inhumanity have any boundaries?

It's inhumane to force consumers, half of whom have lower incomes than autoworkers, to subsidize the latter. Why do you want to spit on low-income consumers by forcing them to pay higher prices in order to subsidize perceived victims who are really better off than they (consumers) are?

 

[whichphilosophy]

No, just that they (and auto companies) should not be subsidized at the expense of consumers, who are treated like used toilet paper when they are forced to subsidize uncompetitive auto producers (with higher prices).

Does your inhumanity have any boundaries?

It's inhumane to force consumers, half of whom have lower incomes than autoworkers, to subsidize the latter. Why do you want to spit on low-income consumers by forcing them to pay higher prices in order to subsidize perceived victims who are really better off than they (consumers) are?

So we can raise taxes instead and the working people pay for those laid off as our work is transported abroad. Then no one will afford consumer products. As spending power decreases, then more people go out of work.

Or perhaps not pay anything to those laid off. In some areas a factory is the criteria for the existence of a community.

Rather then compete with sweatshops there is no harm in keeping people in work even if it costs the boss more, and the CEO can only own one jet instead of two. Then taxes could eventually go down a little and consumer spending continue to rise as a result of more disposable income.

In the London a 3 bed family house can reach £1 million and foreign investors are on large source of sales for this. With salaries not competing, if a person already owns a house or earns around £60,000 pa and upwards he has to rent. In fact rents are so high that nurses, doctors, teachers and shop workers who work in Central London have to travel from outside the city. In W1 and WC1 London, not many people can afford £3,000 per month for a one bedroom flat plus utilities,service charges (often not included in the rent) and council taxes.

 

[Lumpenproletariat]

The "we" is all of us, who do not need uncompetitive factories to be preserved like museum exhibits at higher cost which all consumers have to pay.

If we don't need them in those factories anymore, then let the spoiled brats change careers.

Lumpy, who exactly do you imagine to be the 'we' in that sentence?

The country. All the consumers in the market, for whom the best system is a totally competitive one in which no company or special interest producer or sector is protected against having to compete, and all of which should win or lose in the market based on their performance rather than on any favoritism.

I mean, if your 'we' is the general population of the United States, then that 'we' would include those auto workers.

Yes, they too benefit from everyone else having to compete in the market without any special interest receiving any special favors or protection. The totally competitive system benefits 100% of the population. While one which protects certain select sectors and exempts them from competing inflicts injury on us all while giving only a short-term benefit to the 1%-of-the-population special interest favored by the artificial subsidy.

If your 'we' includes the current President of the United States, he has been [babbling] 'Jobs Jobs Jobs' for most of the last two years, so he 'needs' those people to be employed.

("babbling" added for accuracy)

There are millions of unemployed and underemployed people who will be shafted as we extend protection and favors to any special interest group which then drives up the prices we all must pay, and which hurt the poor most of all. The poor are in the "we" and thus should not be forced to pay the higher costs imposed onto us by protecting any industry or sector or select class.

Does the 'we' include the people who own businesses near the auto plants, . . .

They too benefit from a totally competitive economy. We ALL benefit from everyone having to earn their way without special privileges others have to pay for, such as protectionism and subsidies and phony makework "jobs" which are not needed but have to be paid for by someone.

If those businesses near the auto plants become less needed in the economy, because the demand for them decreases, then they should have to compete by relocating or adjusting so that they are earning their way instead of receiving an unearned benefit at the expense of the 99% who have to compete. Their income should not be based on pity toward them because we feel sorry for them or for the autoworkers or other select victim group needing to be propped up at the expense of everyone else.

. . . the people whose bottom line depends on the workers bringing home disposable incomes to spend in the businesses?

Their "bottom line" is not more important than the "bottom line" and "disposable incomes" of millions of consumers who have to pay the high cost of subsidizing any special interest and who are trampled underfoot by propping up any special interest for favored treatment and protection and subsidy at the expense of us all. It's not our obligation to rush in to protect these uncompetitive businesses out of pity for them and at the expense of the vast majority of us, including the poor.

Who's 'we,' Lumpy, and how do you qualify to be one of the we?

The "we" is ALL consumers, or ALL citizens. Not certain select victim groups like laid-off factory workers or steel-workers etc. who are supposed to gain or lose in the marketplace based on their performance, not on pity toward them and a phony patriotic obsession to protect their outmoded "jobs" and factories even when they are failing to perform.

 

[Malintent]

What is even more scary is the profound drop in Horse sales. No one is buying horses for transportation anymore. We should be scared of progress... because jobs.

 

[bilby]

What is even more scary is the profound drop in Horse sales. No one is buying horses for transportation anymore. We should be scared of progress... because jobs.

Yeah, it's all those millions of farriers and ostlers who have been thrown onto welfare that I feel sorry for.

 

[Loren Pechtel]

As a result, you can now buy a very nice used car for a tiny fraction of the sale price when new; and modern cars are far more reliable in the long term than older models, so there's little incentive to turnover ownership amongst people who already have a car. I bought my car brand new, and knowing that I cannot possibly get what I paid for it if I sell it, I will keep it, and not buy a new car. People who used to buy a new car every couple of years are now keeping their cars for five or ten years. That pushes down the demand across the entire market for cars - and particularly in the market for new cars. Which pushes new car prices down even further. Which in turn, pushes down prices people are prepared to pay for used cars.

(all prices are AU$)

Yup, that's what's really going on. Cars are more reliable, thus there is less total demand and less turnover. Furthermore, a non-luxury car on the used market likely means either an owner who couldn't afford it (think they did proper maintenance??) or somebody else's problem. (And when it's an older luxury car you no longer have the new car luxury but you have the expensive upkeep that comes with luxury cars.)

 

[bilby]

As a result, you can now buy a very nice used car for a tiny fraction of the sale price when new; and modern cars are far more reliable in the long term than older models, so there's little incentive to turnover ownership amongst people who already have a car. I bought my car brand new, and knowing that I cannot possibly get what I paid for it if I sell it, I will keep it, and not buy a new car. People who used to buy a new car every couple of years are now keeping their cars for five or ten years. That pushes down the demand across the entire market for cars - and particularly in the market for new cars. Which pushes new car prices down even further. Which in turn, pushes down prices people are prepared to pay for used cars.

(all prices are AU$)

Yup, that's what's really going on. Cars are more reliable, thus there is less total demand and less turnover. Furthermore, a non-luxury car on the used market likely means either an owner who couldn't afford it (think they did proper maintenance??) or somebody else's problem. (And when it's an older luxury car you no longer have the new car luxury but you have the expensive upkeep that comes with luxury cars.)

There has always been a problem with second hand cars, which is that it's only viable to sell a lemon.

If you have a car that is apparently worth, say, $10,000, and it has a hard-to-spot problem that will cost $3,000 to fix, then you can sell your $7,000 (real value) car for $9,000 - the buyer thinks he is saving $1,000, and you know you are getting $2,000 more than it's worth - everyone agrees to the deal.

If, on the other hand, your car is in perfect condition, you want $10,000 for it; But the buyer won't pay that, because he wants to build in the risk that it has a hard-to-spot problem. He won't offer more than $9,000, and you won't take less than $10,000, so the deal falls through.

This is why used car salesmen have such a bad reputation - economics dictates that they can only do bad business.

 

[Loren Pechtel]

Yup, that's what's really going on. Cars are more reliable, thus there is less total demand and less turnover. Furthermore, a non-luxury car on the used market likely means either an owner who couldn't afford it (think they did proper maintenance??) or somebody else's problem. (And when it's an older luxury car you no longer have the new car luxury but you have the expensive upkeep that comes with luxury cars.)

There has always been a problem with second hand cars, which is that it's only viable to sell a lemon.

If you have a car that is apparently worth, say, $10,000, and it has a hard-to-spot problem that will cost $3,000 to fix, then you can sell your $7,000 (real value) car for $9,000 - the buyer thinks he is saving $1,000, and you know you are getting $2,000 more than it's worth - everyone agrees to the deal.

If, on the other hand, your car is in perfect condition, you want $10,000 for it; But the buyer won't pay that, because he wants to build in the risk that it has a hard-to-spot problem. He won't offer more than $9,000, and you won't take less than $10,000, so the deal falls through.

This is why used car salesmen have such a bad reputation - economics dictates that they can only do bad business.

In the old days cars aged worse--you could buy a used car that simply didn't look as nice as a new one without it being a lemon. Since modern cars hold up much better there aren't that many such cars on the market anymore outside the luxury area.