There’s an eerie thread of optimism weaving through a number of post-bailout, post-December bloodbath stories lately. Sure, hope dies last and all that, but as Studs Terkel put it, “hope has never trickled down, it has always sprung up.” And most of this fresh-faced optimism seems to have trickled down directly from GM PR. Take the headline “‘Happy Days’ Return For Domestic Car Dealers” over at Dealersedge.com, for example. If the use of scare quotes in the headline isn’t enough to set your PR-friendly hackery alarm ringing, well, that’s why we’re here. The entire piece is based on quotes from employees and owners of three dealerships, two in New Hampshire, one in Michigan. These ecstatic, old-timey song-referencing folks spout anecdotal evidence of a new influx of floor traffic, offering no dissent from the opinion that “happy days” are indeed here again. And why wouldn’t they say that zero percent terms on Trailblazers and Saabs have Americans flooding the showrooms?
After all, there’s more to this than just the usual “nothing to see here, everything is fine” investor snowjob. Specifically, it’s a “nothing to see here, the bailout is working” snowjob aimed at you, the United Taxpaying Lenders Of Last Resport. In GM’s December sales call (full transcript at seekingalpha) Mark LaNeve himself said that the GMAC bailout “was a boost to the month,” but that he “cannot say it affected it greatly.” And even though dealers “are pushing just to meet payroll in some cases,” LaNeve also believes that volume and financing will continue to be priorities. In order to do that, Uncle Sugar will have to stay involved.
Which brings us to the quasi-optimism of the Detroit News‘s Daniel Howes. His headline “Is Rebirth Next After ‘Dark December’?” reveals the essential minimum levels of optimism required to keep future bailouts justifiable, while pointing out some cold realities of the situation. Relatively unconcerned by the business-wide bellyflop, Howes’ pessimism is now focused on the “grand bargaining under way this week between the Detroit automakers and such key constituencies as bondholders, dealers and the United Auto Workers.” He correctly points out that “absent a legitimate threat of bankruptcy, incentives diminish for bondholders — and a whole lot of others — to cooperate.” Too bad that didn’t occur to anyone pre-bailout, huh?
The upshot seems to be that Detroit’s PR is building off the now-widespread industry woes. The taxpayers are currently on the hook for $48.4b in aid to the auto industry without gaining anything concession-wise. Obama and his magic stimulus are seen as the next stop on the subsidy buffet, and GM and company are trying to blend into the crowd that will doubtless flock to that planned $1t expenditure. That could include more money for GMAC finance schemes, loans to the automakers, car purchase tax credits, “clunker culling” tax credits, or any number of other handouts. A little bit of hope trickled down to the media now could mean lots of “hope” for Detroit come March.
The “rebirth” will be some time coming. Me, I think there will be another backlash in January, as irate taxpayers choose a brand they haven’t already made a down payment to.
But here’s the song:
So long sad times
Go long bad times
We are rid of you at last
Howdy gay times
Cloudy gray times
You are now a thing of the past
Happy days are here again
The skies above are clear again
So lets sing a song of cheer again
Happy days are here again
Altogether shout it now
Theres no one
Who can doubt it now
So lets tell the world about it now
Happy days are here again
Your cares and troubles are gone
Therell be no more from now on
From now on…
Happy days are here again
The skies above are here again
So, lets sing a song of cheer again
Happy times
Happy nights
Happy days
Are here again!
The funny part about it is that there are some who really, yes really, believe that if you just make those people feel secure, they’ll go back to spending and it’ll all be just dandy.
Nevermind layoffs, plant closings, 3T in realestate value erased, record personal debt, rising unemployment…
Nevermind that banks aren’t lending ANY of that bailout money. There using it for bonuses, acquisitions, and (mainly) covering their really shaky balance sheets.
Save for the con men on Wall Street and the hucksters who may get Federal “loans” nobody is saying 2009 will be anything but worse than 2008.
Much worse.
Hope floats. So does some excrement and the garbage on Lake Michigan.
Just wait, hold on long enough and Americans will regain their sense and go back to buying SUVs and big trucks. Heck gas is cheap! $1.50 here. Never mind that it jumped for some reason 30 cents this week.
If they can hold on long enough their customers will rush back to the dealerships someday soon and buy everything they’ve got and make them all rich…
I hope you can detect the sarcasm here.
have been wondering for the past month if this is some sort of long term change to America. Maybe it could be permanenet or maybe it is something that will just last a few years. Can detroit hold on long enough or will they need a fundamental shift to what they sell and how they sell it.
I think one thing is clear – for America to survive in a global economy we are going to as a whole quit turning up our noses to the way other countries and other companies do what they do, and we’ll have to quit turning our noses to what they buy and sell. We might think that anything but a stomping-romping muscle car or truck is a pansy, limpwristed appliance but I think the customer base has shifted enough that we ought to see that we’ll have to accept that people want some trucks and muscle cars AND the Prius/Civic/Golfs and we better be damn good at building both varieties.