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They say you don’t recognize history while you’re living through it, but it won’t be long before there’s no doubt about the historic character of what’s happening now. In the not too distant future, everyone will look back on this period and shake their heads, at both the disruption to our economy and many of our solutions to it. And when that day comes and today’s events can be seen with real clarity, we will all turn to each other and ask, "What were we thinking?"
Oh, well. There is at least one man today whose mind is already focused on where he will be standing many years from now. He has coolly witnessed the turmoil inflicted on our financial system and is dispassionately observing the panic that has overtaken us all in its wake. And, knowing that foolish decisions almost always follow emotional trauma, he alone is standing out front, gladly waiting to receive the fruits of the outrageous decisions we seem ready to make. He is Sergio Marchionne, the CEO of Fiat, and he is undoubtedly a genius without peer.Encouraging WordsConsider if you will what is happening in the automobile industry today: A near catastrophic collapse in new car sales in most countries of the world. One might think that this signals consumers’ inability to purchase new cars, either for lack of a job or — as we have been told since last September — because they can’t get a loan for their transportation needs. But those issues are not really the problem. Many of the jobs lost were low paying jobs and therefore not new car buyers, for the rest, loans are readily available.It is true that new car sales have fallen from an annualized pace of just over 16 million vehicles to barely over 9 million in a 12 month period, a 42 percent drop. But it should also be remembered that used car sales at most dealerships in America are way up. And, although it’s speculation at the moment, it’s more than likely that new car sales in America would be substantially higher if the public were being encouraged to buy new cars rather than used vehicles being promoted so heavily. Does anyone still believe that Detroit deserves its current fate — that our manufacturers’ poor management or marketing the wrong products invited all this bad karma? If so, the irreproachable Toyota has dispelled those myths: Their first-quarter loss totaled $7.7 billion. As bad as or worse than losses GM, Ford or Chrysler suffered in the same period. And if Toyota keeps losing like this, then retaining enough in their corporate accounts to continue their operations by this time next year is by no means a sure thing. The other most insidious myth is one that comes our way in numerous e-mails and public comments every week: The price of new cars is way too high for the average family to afford to buy one. That is true for many families, who have been steadily hurt over the last six years by the ever rising prices of gasoline, food and energy. And it’s certainly true for those who just a decade ago made up the blue-collar middle class and either had their jobs shipped overseas or were replaced here by immigrant labor.
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