Monday, November 3, 2008

Auto Industry October Stats Show Economy in Deep Crisis Mode

If the crisis in the American auto industry is any indication of the financial concern Americans will take into the voting booth tomorrow, a McCain (party in control) win would be a major miracle. The New York Times says today,

Vehicle sales in the United States tumbled to multi-decade lows in
October as tightened credit markets and an economic slowdown kept consumers away from dealerships.

General Motors on Monday reported an incredible 45 percent decline
in its sales, and
Chrysler said its sales were down 35 percent. The Ford
Motor Company
said it sold 30.2 percent fewer cars and trucks.
Toyota Motor said its sales were 23 percent lower, despite
offering no-interest financing and large discounts on many models. Sales were down 33 percent at Nissan and 25.2 percent at
Honda. NYTimes

This is evidence of a generalized meltdown, not just of the American auto industry (Japanese car sales are only slightly better), but this is a meltdown of America's confidence in the economy and the ability to obtain credit to buy a car.
“If you adjust for population growth, this is probably the worst
industry sales month in the post-World War II era,” Mark LaNeve,
G.M.’s vice president for sales in North America, said in a statement. “We believe there is considerable pent-up demand from the last three years, but until the credit markets open up and consumer confidence improves, the entire U.S. economy, and any industry like autos that relies on financing, will suffer.” NYTimes

John McCain is talking a lot about the "American Dream" on the campaign trail, but perhaps the first part of the American dream that any of us achieves, even before a high school diploma, is a drivers license and access to the family car. Even when we cannot afford to own a home, we can be proud of our cars and delight in the freedom they give us to move from place to place.

When Americans are doing all of that 40% less than they were last year, that's evidence of an economic crisis that goes far beyond the auto industry. One Ford executive cited in the above article describes the current Republican-led economic crisis as "similar to what we’ve seen after a natural disaster."

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