Cash for Clunkers - Good or Bad Idea?

4110 messages, Last post on Nov 23, 2009 at 11:42 AM

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#3737 of 4110 Cash for Clunkers: Good or Bad Idea? by claires HOST Sep 12, 2009 (11:06 am)
The Cash for Clunkers Message 'Cash for clunkers' buyers missed out on real deals, experts say Replies to this message: hpmctorque (Sep 12, 2009 6:30 pm) plekto (Sep 12, 2009 7:36 pm) nippononly (Sep 14, 2009 5:05 pm) gagrice (Sep 14, 2009 5:21 pm) srs_49 (Sep 15, 2009 2:54 am) ateixeira (Sep 15, 2009 8:18 am) stephen987 (Sep 16, 2009 8:32 am) and 2 more...
#3738 of 4110 Re: Cash for Clunkers: Good or Bad Idea? [claires] by hpmctorque Sep 12, 2009 (6:30 pm)
Replying to: claires (Sep 12, 2009 11:06 am) I read the "Cash For Clunkers" article and I think Mr. Cooper is very wrong in assuming that market forces aren't responsive to consumer demands. It's CAFE that is is largely to blame for skewing consumers' preferences toward larger and more powerful, less fuel efficient vehicles. Sure, Detroit made numerous mistakes, and misread the market in many cases. That's why GM and Chrysler went bankrupt, while many of the import brands prospered. Mr. Cooper gives Washington too much credit for interpreting what consumers want, and he gives market forces too little credit, in my opinion. It concerns me when "experts" depend too much on government to impose standards. If politicians were that astute, perhaps more of them (not all, to be sure) would be wealth generators instead of wealth distributors and, in some cases, wealth destroyers. To be fair, though, our domestic automakers destroyed a huge amount of market value in the last 20 or so years. Of course, we need government, we need lawmakers, and we need laws to help balance the forces of large-scale manufacturing, labor, and consumers. As this applies to the auto industry, this industry was an oligopoly (where a few large, powerful companies control the market). On the labor side, the UAW became a virtual monopoly by the '60s. That's just the opposite of the situation in the '20s and '30s, when the manufacturers could exploit the workers. Thanks to foreign competition on the manufacturing side, and concessions by union labor, both the manufacturers and labor are more responsive to consumers' needs now. I'm not suggesting that we've got a perfect situation now, but there is more competition in the marketplace than in the '50s and '60s. My concern, however, is that the pendulum is swinging to too much government involvement and regulation, and too little reliance on market forces. Replies to this message: plekto (Sep 12, 2009 7:36 pm)
#3739 of 4110 Re: Cash for Clunkers: Good or Bad Idea? [hpmctorque] by plekto Sep 12, 2009 (7:36 pm)
Replying to: hpmctorque (Sep 12, 2009 6:30 pm) Mr. Cooper gives Washington too much credit for interpreting what consumers want, and he gives market forces too little credit, in my opinion Exactly. The reason sales are so off is because the rental companies scaled WAY back and the consumers just plain hate the designs of GM. So only the desperate and those with no clue bought them. Well, the poor can't get that easy financing, so... The solution is what it always has been. Build what the consumer wants to buy, not what you want to sell.
#3740 of 4110 Re: German auto makers did worse than we did [kernick] by ateixeira Sep 14, 2009 (8:02 am)
Replying to: kernick (Sep 11, 2009 3:58 pm) Several good points, once again, but I'll comment on one point you made: The good bits of GM would go for market-value; it is silly to think that a Chinese company would walk in and buy Corvette when Honda or Penske would bid on it. Keeping in mind the current market, I think they would sell below value. Few have that sort of liquidity. Honda could never own Corvette because it flies in the face of their green philosophy. Penske would be better, if they really had the resources. Replies to this message: kernick (Sep 14, 2009 10:30 am) ateixeira (Sep 14, 2009 10:37 am)
#3741 of 4110 Re: German auto makers did worse than we did [ateixeira] by kernick Sep 14, 2009 (10:30 am)
Replying to: ateixeira (Sep 14, 2009 8:02 am) I think they would sell below value. The value of anything is - the highest price anyone is willing to pay for that item at that moment. The value can certainly change over time. Nothing ever sells below value if it is open to sale/bid to a pool of buyers. Few have that sort of liquidity. You are correct; if referring to the 6B people of the world. But there are certainly individuals (Gates, Buffett and the 100 or so other billionaires in this country) who could write a check to GM today to buy the Corvette name and factory. Who knows what Corvette would fetch. Maybe a car-guy like Jay Leno would buy it? Replies to this message: ateixeira (Sep 14, 2009 10:37 am)
#3742 of 4110 Re: German auto makers did worse than we did [kernick] by ateixeira Sep 14, 2009 (10:37 am)
Replying to: kernick (Sep 14, 2009 10:30 am) I know what you mean - a rescue like what ProDrive did for Aston Martin. That would be nice, actually. I also agree about the value of something being what someone else is willing to pay. It's just that right now that's about as low as it would ever get. C4C can give them a crutch (heck, Chrysler is leasing again) short-term and they may actually be worth something long-term.
#3743 of 4110 A better way to keep GM & Chrysler in Business by andres3 Sep 14, 2009 (11:59 am)
Here is the best way to keep GM & Chrysler in business for the Big 3 fans out there: 1) Everyone go out and hit GM/Chrysler vehicles you see out on the road. Hit them bad enough to cause some significant damage with your bailout accident. 2) Don't hit them so hard that you kill/maim/injure seriously, or total the vehicle. 3) Buy a bunch of replacement GM & Chrysler car parts for no reason. With all the body shops buying replacement parts for GM & Chrysler vehicles, the factories will have to start producing more parts and pieces, and keep busy producing and manufacturing. We could have them reduce their market share to ZERO and still keep them in business this way!!! This is Plan A. Gov't tax subsidized bailouts are Plan B. I'd rather choose Plan A.
#3744 of 4110 Re: Cash for Clunkers: Good or Bad Idea? [claires] by nippononly Sep 14, 2009 (5:05 pm)
Replying to: claires (Sep 12, 2009 11:06 am) The author of "The Cash for Clunkers Message" goes on for a page and a half about how consumers desperately want more fuel-efficient cars, then says that C4C-type programs should be designed to giv a revenue-neutral advantage to small fuel-efficient cars "because sometimes consumers need a nudge in the right direction". So which is it? I WOULD like to see some sort of C4C program continue into the future, provided the fuel economy standards for getting a government rebate are MUCH higher than the program that just ended, and that cars and trucks get the same treatment. No more special standards for trucks!! Replies to this message: gagrice (Sep 14, 2009 5:21 pm) srs_49 (Sep 15, 2009 2:54 am) ateixeira (Sep 15, 2009 8:18 am) stephen987 (Sep 16, 2009 8:32 am) gagrice (Sep 16, 2009 8:46 am) ateixeira (Sep 16, 2009 9:54 am)
#3745 of 4110 Re: Cash for Clunkers: Good or Bad Idea? [nippononly] by gagrice Sep 14, 2009 (5:21 pm)
Replying to: nippononly (Sep 14, 2009 5:05 pm) No more special standards for trucks!! Sounds like you think the automakers can defy the laws of physics. Until the automakers bring small diesel engines to our shores they have reached the peak of economy in PU trucks. We know a hybrid truck will be nearly worthless for towing. The one I had was no better than the non hybrid around town. From what I read most of the clunkers went for the $4500 figure. It does not take much of an old used truck to be worth at least $3500. I did think they should have allowed people to trade in a class 3 for a car if they no longer needed the PU truck. Not sure who's idea that was. Replies to this message: srs_49 (Sep 15, 2009 2:54 am)
#3746 of 4110 Re: Cash for Clunkers: Good or Bad Idea? [gagrice] by srs_49 Sep 15, 2009 (2:54 am)
Replying to: gagrice (Sep 14, 2009 5:21 pm) I did think they should have allowed people to trade in a class 3 for a car if they no longer needed the PU truck. Not sure who's idea that was. I don't understand either why they didn't allow the class 3-for-a-car trade up. Only thing that comes to mind is the Detroit still wanted to sell big PU trucks because that's where their profits lay.