The continuing Cash for Clunkers saga...

ignorant wrote:

Snowdoggie wrote: The Cash for Clunkers program is for the economy what sugar is to your system. It tastes good and speeds up the metabolism for a short time, but in the long run your metabolism, or the economy will slow down again to an even lower level than before you ate the sugar.

Or you could say that this program provides the needed capital to cash strapped organizations to alow them to build more fuel efficent/desireable models, keep plants open, people employed, and suppliers from going belly up. Surely having companies remain solvent in the near term so they can become a long term going concern isn't that what you describe.. (just playing devils advocate) Mg is just gm backwards anyways.... http://www.28dayslater.co.uk/forums/showthread.php?t=10566&highlight=longbridge http://www.28dayslater.co.uk/forums/showthread.php?t=12814&highlight=longbridge http://www.28dayslater.co.uk/forums/showthread.php?t=9749&highlight=longbridge http://www.28dayslater.co.uk/forums/showthread.php?t=9321&highlight=longbridge http://www.28dayslater.co.uk/forums/showthread.php?t=7975&highlight=longbridge http://www.28dayslater.co.uk/forums/showthread.php?t=9760&highlight=longbridge

Yep. We are doing a good job of using AMERICAN taxpayer's money to keep Japanese and Korean Companies solvent. I guess that is called 'globalism'.

http://money.cnn.com/galleries/2009/autos/0908/gallery.clunker_top_10/index.html

Interestingly enough, the two companies currently being subsidized by Federal Government don't make out so well in the Cash for Clunkers Program as most people are chosing Fords and foreign brands. We aren't really helping out the most 'cash strapped' companies here.

MA2LA wrote: The whole program just makes me sick to my stomach..and its not only some of the vehicals being killed, and well that kills me on so many levels.. the other is just the waste of money that is happening. the direction this goerment is heading scares the crap out of me and nothing i have seen them do has convinced me they know what they are doing nor have i seen a single thing to improve with all the money they are dumping.

I have.

Thanks to the CARS program, Ford posted it's first profit in some time, and posted it's first increase year to year of car sales in over 2 years.

What you call waste is money that is flowing through the economic system. It's too bad that much of it is going to forgein brands, but quite a bit of the money stays here, and since savings rates are quite low, that money will cycle through the system for years.

Also, the boom in the recycling business currently is going on- this will help light a small fire under the economy- yes it's a fuel on the fire kind of burn, but in some segments, that's all that's needed.

Considering how much this board loves to bash SUV's, it's not a good thing to part ways with them, and replace with fuel efficient cars? A way to help us maintain our interestes for a longer time? Seems like a good thing.

E

carzan wrote: It would appear that at least the majority of the new cars being traded for are more fuel efficient. The Top Ten Cash for Clunkers Trade-Ins: 1. 1998 Ford Explorer 2. 1997 Ford Explorer 3. 1996 Ford Explorer 4. 1999 Ford Explorer 5. Jeep Grand Cherokee 6. Jeep Cherokee 7. 1995 Ford Explorer 8. 1994 Ford Explorer 9. 1997 Ford Windstar 10. 1999 Dodge Caravan The Top Ten Cash for Clunkers New Cars: 1. Ford Focus 2. Honda Civic 3. Toyota Corolla 4. Toyota Prius 5. Ford Escape 6. Toyota Camry 7. Dodge Caliber 8. Hyundai Elantra 9. Honda Fit 10. Chevy Cobalt

The HORROR!

JmfnB wrote:

carzan wrote: It would appear that at least the majority of the new cars being traded for are more fuel efficient. The Top Ten Cash for Clunkers Trade-Ins: 1. 1998 Ford Explorer 2. 1997 Ford Explorer 3. 1996 Ford Explorer 4. 1999 Ford Explorer 5. Jeep Grand Cherokee 6. Jeep Cherokee 7. 1995 Ford Explorer 8. 1994 Ford Explorer 9. 1997 Ford Windstar 10. 1999 Dodge Caravan

The HORROR!

I don't see Suburbans, Tahoes and Expeditions on the list, nor do I see full sized pickups and vans. Most of these are mid-sized SUVs with six cylinders. If you have to haul or tow, won't you use less gas with a smaller SUV?

I drive my Miata to work and use my Cherokee for towing and hauling packs of large dogs. I use less gasoline than the guy who drives his V8 Suburban everywhere.

Are you sure aboutthat? Most 'burban owners I know get better gas mileage than most exploder owners I know. Just because it;s a V6 and smaller doesn't mean it gets better economy.

Interesting to see the new Elantra ahead of the Fit. It hought the Fit was the "perfect" car.

Snowdoggie wrote: I don't see Suburbans, Tahoes and Expeditions on the list, nor do I see full sized pickups and vans. Most of these are mid-sized SUVs with six cylinders. If you have to haul or tow, won't you use less gas with a smaller SUV? I drive my Miata to work and use my Cherokee for towing and hauling packs of large dogs. I use less gasoline than the guy who drives his V8 Suburban everywhere.

Two things- more than likely, these people figured out that the benefits of being able to tow anything and haul anything isn't really worth it. They are the ones who more bought on want vs. need.

The truck owners really can't part, since they actually use the capability.

As for mileage- our 5.4l F150 got the same 15mpg towing as our 3.0l and 4.0l Rangers. AND it was cheaper to insure. Thankfully, our new Edge gets 18mpg towing, and is close enough to a car in terms of daily driving that it replaces a sedan.

It's all relative.

E-

Snowdoggie wrote: Yep. We are doing a good job of using AMERICAN taxpayer's money to keep Japanese and Korean Companies solvent. I guess that is called 'globalism'. http://money.cnn.com/galleries/2009/autos/0908/gallery.clunker_top_10/index.html Interestingly enough, the two companies currently being subsidized by Federal Government don't make out so well in the Cash for Clunkers Program as most people are chosing Fords and foreign brands. We aren't really helping out the most 'cash strapped' companies here.

From The Detroit News: "General Motors Co., Ford Motor Co. and Chrysler Group LLC sales account for 47 percent in the program, which is above their overall share in the auto market of about 45 percent of the three Detroit companies."

"Of non-Big Three purchases, the Transportation Department's preliminary analysis suggests that more than half of these new vehicles were manufactured in the United States. "

"Gibbs said the program has been a "big benefit to domestic automakers." The transactions are generating a 61 percent increase in vehicle fuel economy, Gibbs said. The average fuel economy of new vehicles purchased under the CARS program is 25.4 miles per gallon, and the average fuel economy of trade-ins is 15.8 mpg, for an average increase in fuel economy of 9.6 mpg. "

alfadriver wrote: Thanks to the CARS program, Ford posted it's first profit in some time, and posted it's first increase year to year of car sales in over 2 years.

Umm, the last time Ford disclosed their financial information was for Q2 of 2009 (April, May and June). The CARS program didn't start until July 1. How did CARS help Ford post a profit? (Not to mention that Ford still had an operating loss and only made a profit because they did some debt restructuring.)

Bob

Schmidlap wrote:

alfadriver wrote: Thanks to the CARS program, Ford posted it's first profit in some time, and posted it's first increase year to year of car sales in over 2 years.

Umm, the last time Ford disclosed their financial information was for Q2 of 2009 (April, May and June). The CARS program didn't start until July 1. How did CARS help Ford post a profit? (Not to mention that Ford still had an operating loss and only made a profit because they did some debt restructuring.) Bob

Well, I forgot the timing of the quarterly review was the same time that we were bragging about the sales increase of July. Being that our sales were went up for the first time in many years, I think they are projecting a modest proft. Still, the sales numbers really help the cash movement inside the company, which will help stabilize the development of new products- that I see for real.

Remember, it was a relatively small loss on sales that were 33% lower. We start this quarter with sales that are up 1% from last year. That's a pretty large increase of sales from the first quarter to now.

E-

carzan wrote: From The Detroit News: "General Motors Co., Ford Motor Co. and Chrysler Group LLC sales account for 47 percent in the program, which is above their overall share in the auto market of about 45 percent of the three Detroit companies." "Of non-Big Three purchases, the Transportation Department's preliminary analysis suggests that more than half of these new vehicles were manufactured in the United States. " "Gibbs said the program has been a "big benefit to domestic automakers." The transactions are generating a 61 percent increase in vehicle fuel economy, Gibbs said. The average fuel economy of new vehicles purchased under the CARS program is 25.4 miles per gallon, and the average fuel economy of trade-ins is 15.8 mpg, for an average increase in fuel economy of 9.6 mpg. "

On the face of it those bits of news look promising...

carzan wrote:

Snowdoggie wrote: Yep. We are doing a good job of using AMERICAN taxpayer's money to keep Japanese and Korean Companies solvent. I guess that is called 'globalism'. http://money.cnn.com/galleries/2009/autos/0908/gallery.clunker_top_10/index.html Interestingly enough, the two companies currently being subsidized by Federal Government don't make out so well in the Cash for Clunkers Program as most people are chosing Fords and foreign brands. We aren't really helping out the most 'cash strapped' companies here.

From The Detroit News: "General Motors Co., Ford Motor Co. and Chrysler Group LLC sales account for 47 percent in the program, which is above their overall share in the auto market of about 45 percent of the three Detroit companies." "Of non-Big Three purchases, the Transportation Department's preliminary analysis suggests that more than half of these new vehicles were manufactured in the United States. " "Gibbs said the program has been a "big benefit to domestic automakers." The transactions are generating a 61 percent increase in vehicle fuel economy, Gibbs said. The average fuel economy of new vehicles purchased under the CARS program is 25.4 miles per gallon, and the average fuel economy of trade-ins is 15.8 mpg, for an average increase in fuel economy of 9.6 mpg. "

Even if they manufacture here, a lot of that money is still going overseas.

How well will these companies be doing next year with the demand for new cars saturated and with no more government subsidies? Remember what happened with rebates? Buyers got addicted to them. Are these government subsidies going to be ongoing things, kind of like farm subsidies?

Maybe brand loyalty has something to do with it. It is likely that the the owner of a "gas guzzler, clunker" was the owner of a domestic nameplate. They may have turned in for a more economical car (or truck) from the same nameplate.

Notice that the Ford Explorer is the #1 trade in and the Ford Focus is the #1 purchase.

Snowdoggie wrote: Even if they manufacture here, a lot of that money is still going overseas.

Keeping 5000 people employed and earning money to spend on things like their mortgages, kids braces and new tires does a lot more good than the negative impact of sending money to one overseas company. Yes, the cash going to asia is a negative, but the good done by keeping american plants open outweighs that negative by a large margin

How many of these domestic company cars are made in the USA ?

Snowdoggie wrote:

carzan wrote:

Snowdoggie wrote: Yep. We are doing a good job of using AMERICAN taxpayer's money to keep Japanese and Korean Companies solvent. I guess that is called 'globalism'. http://money.cnn.com/galleries/2009/autos/0908/gallery.clunker_top_10/index.html Interestingly enough, the two companies currently being subsidized by Federal Government don't make out so well in the Cash for Clunkers Program as most people are chosing Fords and foreign brands. We aren't really helping out the most 'cash strapped' companies here.

From The Detroit News: "General Motors Co., Ford Motor Co. and Chrysler Group LLC sales account for 47 percent in the program, which is above their overall share in the auto market of about 45 percent of the three Detroit companies." "Of non-Big Three purchases, the Transportation Department's preliminary analysis suggests that more than half of these new vehicles were manufactured in the United States. " "Gibbs said the program has been a "big benefit to domestic automakers." The transactions are generating a 61 percent increase in vehicle fuel economy, Gibbs said. The average fuel economy of new vehicles purchased under the CARS program is 25.4 miles per gallon, and the average fuel economy of trade-ins is 15.8 mpg, for an average increase in fuel economy of 9.6 mpg. "

Even if they manufacture here, a lot of that money is still going overseas. How well will these companies be doing next year with the demand for new cars saturated and with no more government subsidies? Remember what happened with rebates? Buyers got addicted to them. Are these government subsidies going to be ongoing things, kind of like farm subsidies?

Yes, a lot of that money will go overseas, but a lot will stay here and by those stats, it appears (47% vs 45%) that those taking advantage of CARS are buying more domestic than historically typical without. Seems to me we should be at least a little happy about that AND as previously pointed out that of the remaining percentage sold, better than 50% of the workforce is domestic. But no one can get around the fact that no manufacturer is making money if no one is buying.

As far as comparing CARS to rebates, I haven't seen a lot of rebates recently. The manufacturers seem to be substituting the CARS program for rebates, for now. When the program is exhausted, I suspect the rebates will come back.

However,I think the manufacturers are as much or more addicted to rebates than buyers. When a car is selling well, they can pad the price to reflect that. When the same car isn't selling so well, some of that padding is given to the buyer in the form of a rebate without so much disturbing the price structure.

I'm not saying that the program is the greatest thing ever, but I think it has caught a lot of people of guard as far as how well it has worked. Will it save the domestic car industry? Not likely by itself, but it has given a bit of a boost that might get them started in the right direction. Will I use it? Nope. When the money runs out, I will still be driving my '93 Cherokee Sport with 226,000 miles on it that I got for free on Craigslist.

I'm not an economist, so I am prepared to be completely wrong on this, but I'm having a hard time imagining the same level of job stability for American (or any) auto workers as some of you are.

They are selling overstocked inventory. It's already on the lot. That isn't directly related to future production numbers. It is related to cash flow, and resource allocation.

Plus, the companies are in big financial holes. So, how much of that money is being used to address overdue accounts payable, refinancing debt, or corporate restructuring vs. maintaining jobs for autoworkers to build cars for future sales?

Current (and future) jobs are not directly related to reducing old inventory. They are related to projections of future sales, which could actually be diminished by this program.

I'm just not as convinced as some of you.

SVreX wrote: I'm not an economist, so I am prepared to be completely wrong on this, but I'm having a hard time imagining the same level of job stability for American (or any) auto workers as some of you are. They are selling overstocked inventory. It's already on the lot. That isn't directly related to future production numbers. It is related to cash flow, and resource allocation. Plus, the companies are in big financial holes. So, how much of that money is being used to address overdue accounts payable, refinancing debt, or corporate restructuring vs. maintaining jobs for autoworkers to build cars for future sales? Current (and future) jobs are not directly related to reducing old inventory. They are related to projections of future sales, which could actually be diminished by this program. I'm just not as convinced as some of you.

Big +1. And I'm obviously not an economist either, but while this certainly appears to be a good "shot in the arm" for automobile manufacturers, it doesn't seem the least bit sustainable. Not trying to be all "doom and gloom," I truly hope I'm wrong, and for the sake of those employed by the big 3, I hope that they are undergoing massive restructuring while trying to stay afloat.

And I'm still more than a little pissed that my tax dollars are funding the purchase of a doctor's new Toyota Highlander that BARELY eeks out exactly 22 MPG, while I'm scrounging up $20 to get used tires mounted on the front of my 310,000 mile "clunker" Integra that averages 33.5.

Ho-hum.

poopshovel wrote:

SVreX wrote: I'm not an economist, so I am prepared to be completely wrong on this, but I'm having a hard time imagining the same level of job stability for American (or any) auto workers as some of you are. They are selling overstocked inventory. It's already on the lot. That isn't directly related to future production numbers. It is related to cash flow, and resource allocation. Plus, the companies are in big financial holes. So, how much of that money is being used to address overdue accounts payable, refinancing debt, or corporate restructuring vs. maintaining jobs for autoworkers to build cars for future sales? Current (and future) jobs are not directly related to reducing old inventory. They are related to projections of future sales, which could actually be diminished by this program. I'm just not as convinced as some of you.

Big +1. And I'm obviously not an economist either, but while this certainly appears to be a good "shot in the arm" for automobile manufacturers, it doesn't seem the least bit sustainable. Not trying to be all "doom and gloom," I truly hope I'm wrong, and for the sake of those employed by the big 3, I hope that they are undergoing massive restructuring while trying to stay afloat. And I'm still more than a little pissed that my tax dollars are funding the purchase of a doctor's new Toyota Highlander that BARELY eeks out exactly 22 MPG, while I'm scrounging up $20 to get used tires mounted on the front of my 310,000 mile "clunker" Integra that averages 33.5. Ho-hum.

Another +1...a shot in the arm is no good if it gets short term gains in exchange for long term sustainability. Using my tax dollars to subsidize this crap is infuriating.

Bryce

iceracer wrote: How many of these domestic company cars are made in the USA ?

I can tell you that the '09 Ford Fusion is considered 55% domestic content, show here:
http://www.nhtsa.dot.gov/portal/site/nhtsa/template.MAXIMIZE/menuitem.bead436724af02e770f6df1020008a0c/?javax.portlet.tpst=4427b997caacf504a8bdba101891ef9a_ws_MX&javax.portlet.prp_4427b997caacf504a8bdba101891ef9a_viewID=detail_view&itemID=539ed5c474a5a110VgnVCM1000002fd17898RCRD&viewType=standard

What is not yet show online but can be seen in the required window sticker is that the '10 Ford Fusion is 25% domestic.

Note: domestic means US and/or Canada. There is no clear understanding of how much is US.

http://www.opposingviews.com/articles/opinion-cash-for-clunkers-program-is-a-clunker-can-you-cash-in

http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE56D4Z720090715

Just my opinion:

The government cannot offer anything to someone it hasn't taken from someone or somewhere else. All we are doing is redistributing money. Sometimes that is warranted, but in this case I think the money is better spent elsewhere...or more importantly not spent at all.

Keep in mind, our federal governement is operating under a tremendous deficit. Every program/bailout/stimulus package enacted does so using borrowed dollars that will have to be paid back with interest later. You cannot spend your way out of a recession. I am afraid we are ignoring the long -term macro economic consequences to ease short-term micro economic pains of select individuals (companies included).

We cannot afford the federal programs we have now, much less all these "new" programs. Remember the Medicaid/Medicare issues? We could not afford that program as was designed during the "good" years. It still needs to be fixed but we are talking of adding universal health care on top of it. We can no longer afford being the world's police force either while at the same time trying to take care of all the domestic issues at home. We need to make some hard choices.

The economy as a whole is not recovering because of the federal government's stimulus/bailout programs. Those are a drop of water in an ocean. We are only helping some very select groups prolong the inevitable. We need to make some hard choices and cut back on government spending to retire some debt in the long term. Or else the US will end up in far worse economic condition then we have seen to date.

A little off-topic, but I feel better now.

Cash for Clunkers = Using taxpayer money to put more people into debt.

Ooo- here's another angle.

What about the NEGATIVE financial impact to charities and buy-here-pay-here car lots who will NOT be able to receive or sell those cars that have been crushed.

750,000 cars worth $3000 each = $2.25 Billion loss in sales to those agencies.

Snowdoggie wrote: Yep. We are doing a good job of using AMERICAN taxpayer's money to keep Japanese and Korean Companies solvent. I guess that is called 'globalism'.

Or keep about the dozen or so people(Americans) I know employed by "foreign" car companies in American producing cars. Foreign companies and their solvency provide food for dinner for many american families. Don't discount that.

http://www.automotivedigest.com/content/displayArticle.aspx?a=55946 <-- So when this article was written (around 2002) Foreign carmarkers had spent $22.6B in this country building plants. Now this list is old and is missing at least 3 Toyota plants, a Hyundai plant, another M-B plant, atleast 2 Nissan plants and hundreds, maybe thousands of suppliers that have grown up around them.

Just because a company has its headquarters here dosen't mean they have any loyalty to anything except their shareprice. We who were or are in the industry have a different view of the program.

just like the farmer has a different view on corn subsidies.... People in the auto industry are very thankful for this boom.

ignorant wrote:

Snowdoggie wrote: Yep. We are doing a good job of using AMERICAN taxpayer's money to keep Japanese and Korean Companies solvent. I guess that is called 'globalism'.

Or keep about the dozen or so people(Americans) I know employed by "foreign" car companies in American producing cars. Foreign companies and their solvency provide food for dinner for many american families. Don't discount that. http://www.automotivedigest.com/content/displayArticle.aspx?a=55946 <-- So when this article was written (around 2002) Foreign carmarkers had spent $22.6B in this country building plants. Now this list is old and is missing at least 3 Toyota plants, a Hyundai plant, another M-B plant, atleast 2 Nissan plants and hundreds, maybe thousands of suppliers that have grown up around them. Just because a company has its headquarters here dosen't mean they have any loyalty to anything except their shareprice. We who were or are in the industry have a different view of the program. just like the farmer has a different view on corn subsidies.... People in the auto industry are very thankful for this boom.

...while those of us who do not work in the industry and who will be financing this little boomlet with interest for the next 20 years might not be, and even those of you who work in the industry might not be so thrilled next year when the market for new cars comes back down to earth.

In fact, the guy who gets sucked into buying a car by the Cash for Clunkers media circus going on right now might not be to happy the next day when he wakes up with 60 months of payments and a not too secure job. It will be kind of like a hangover.

In the long term, you can never borrow your way to prosperity.