The taxpayers will be paying for the GM and Chrysler bankruptcies. The living. The dead. The unborn. Hell, even my dog. All of us here who give our money to a Congress and President that can’t say no get the honors. Shouldn’t we get something for it? I’m not talking about a bouncy little check in the mail from Uncle Sam. We already have enough of those. How about a car? Seriously. This is a bankruptcy the public will be paying for after all. We’re going to be paying in interminable interest payments and political pontifications if nothing else. Since that’s the case, why not offer all these wonderful unloved surplus vehicles to the public?
I propose that since this is a publicly funded bankruptcy, we offer the public complete access to the auto auctions. Here are the plusses. You’ll get more of your money back in the end. You let the free market do what it does best without a barrier to entry. You get everything done as quickly as possible. There are literally dozens of auto auctions throughout the country that are designed to move thousands of cars in a single day. The selling process is amazingly simple and unlike used car sales, new cars have no discernible wear. You don’t have to worry about frame damage or the Frankenstein sold by the professional rebuilders. The minuses? Well, here it goes.
Dealer traffic would come to a trickle. Even at the ‘snobby’ brands that we all know and resent. Sure there will be those folks who insist on a well made product. But Americans buy crap. That’s why we have Wal-Mart. The only difference between the heavy spenders and the poverty stricken is that the former usually buys more of it in bigger packages. For those who like to buy crap in volume, we’ll just let them go as many times as they like to the auctions. Nothing is better than a free market where all the goods are new and all the bidding is open. What says you?
Sounds like the modern equivalent of bread and circus. I thought that with the first check. A car would seal the deal.
I’ll take 5 Sebrings.
I don’t get the whole closed-to-public auction thing. Ebay is open to everyone but if you insist on buying new, you can still get your crap at Walmart.
I’ve been dreaming of Sebring demolition derby… errh… endurance races since last year. Please let it be so…
Auctions? Sure. But how about arriving at 2009 where the rest of us exist?
Other industries have been disrupted and adapted to the times – just copy a Dell-type model (pardon me Dell haters, just an example). Log on, start with a base model, add whatever stuff you want – sunroof, fancy paint and all that jazz – pay and wait til the robots send one off the line to your home address.
If I didn’t have to deal with another salesperson, nor witness the environmental disaster of a million Cobalts rotting on tarmacs, I’d be OK with that.
I suspect the equivalent will happen as these models are dumped on the public one way or the other. Since the vast number of cars that will be part of this bankruptcy aren’t that desirable, there is not much chance for arbitrage beyond some local inefficiencies. Whatever middleman gets their hand on these cars will want to get rid of them as quickly as possible.
As I am sure thoughtful people like yourself are doing Mr. Lang, my advice would be to cherry pick the few desirable cars like G8s and avoid the rest like the plague. Translating your current inventory to cash as soon as possible would be a smart move as well.
I’m up for it. If the Feds don’t allow this, can you get me into a local auction in Los Angeles??
Now let me get this straight:
Walmart, the most successful retailer in the U.S. and the world, sells crap. Auto retailers are seeing sales drops of 30% and more. And two American auto makers who do not follow Walmart’s model of “crap for the masses” are facing bankruptcy.
Seems to me auto companies should look at Walmart and learn.
I have never understood why the public is excluded from used car auto auctions. New cars may have issues, but used car exclusions make no sense IMO. When a dealer sells a used car at auction where the public is excluded, it seems to me that he is bound to receive a lower price. So what if he picks up a “bargain” when buying, he loses when selling.
I mainly attend state car auctions open to the public and dealers. I find that used car prices obtained by the state are usually higher than KBB trade in values. Sometimes they are several hundred and even a thousand or more dollars higher.
I buy at Walmart because the product is often as good or better and the price beats other places. People buy there because they have shopped around and know what the market is. It is not because the love crap. Crap can be found everywhere, not just at Walmart. Auto makers and dealers are full of it for sure.
Walmart has some of the best inventory control in the world. Their cost containment and price negotiating is also very strong. Much of the other parts such as retailing, merchandising and marketing are only mediocre.
The problem with adopting Walmart’s policies is that Walmart isn’t a manufacturer. Walmart doesn’t have organized workforces, Walmart doesn’t utilize skilled labor or professional trades. Their knowledge base and experience isn’t useful outside of retailing.
I would settle for the execs on a chain gang.
“takin’ it off boss”
Since so many shoppers are now getting their crap at Walmart, there is less and less market share remaining for quality merchandise. In other words, Walmart is leading the world of retailing in a race to the bottom. Does this mean that all car brands will have to lower their quality to compete on price? Are the same Walmart dynamics in play in the realm of subsidized new vehicles?
My own preference is to pay the higher price at the Honda dealer, but there are limits. My stint as a GM customer is the reason that I am now a Honda customer, but A new Chevy Malibu for $5,000 probably makes me a GM customer once again.
This reminds me of the old HS joke where you ask the cutest girl in the class if she will go to bed with you for a million bucks. Then you ask her if she will go to bed with you for one dollar. After the predictable “what kinda girl do you think I am,” you tell her we have already established that, we are now down to negotiating the price.
allegro
I’m pretty sure that “what we get for it” is an economy that is not completely collapsed into Great Depression number two. We also support a lot of American workers by allowing them to keep their paychecks, and we at least try to create a competitive American car industry. So the rewards are there (at least in theory), they just require people to get past the selfishness and the instant gratification mindset that so many Americans have these days.
Putting these cars on public auctions is actually a great idea. Why don’t we also take it a step further, though – if we’re bailing GM and Chrysler out with our tax money, then those who pay more taxes should get lower prices on these cars. Why exactly should someone who pays no taxes or pays very little have the same chance at getting a cheap car as someone who pays several times as much?
Walmart has the world’s most advanced sales tracking system. They listen to what their customers want, and then they provide it for the lowest possible price.
That is wholly unlike most car companies, who instead try to convince the customer what they should want.
The success of Walmmart and the demise of the 2.8 has everything to do with supply/demand – an unstoppable force that will always trump marketing and politics.
Steven Lang: But Americans buy crap.
If that is the case, then why are two of the companies that have the worst reputation for making crap either in bankruptcy, or getting ready to undergo the process?
And please note that plenty of crap was being sold in this country before Wal-Mart became a retail powerhouse. Lower income people have always been forced to make quality-price trade-offs. It’s not as though they were shopping at Bloomingdale’s or Saks Fifth Avenue until Wal-Mart came to town.
They may have shopped at the sainted mom-and-pop place. As someone who did when I was younger, I can assure that the merchandise wasn’t any better; the prices were higher; and the service wasn’t all that great. The rosy glow of nostalgia makes those places look much better than they really were.
Also note that not everything sold at Wal-Mart is crap. I bought tomato plants there last week…I fail to see how they are any “crappier” than plants sold elsewhere. Same with the fertilizer and potting soil…not to mention greeting cards, Hot Wheels, computer paper, car wax, deodorant, shampoo, shaving creme….
Great idea, Steve.
But folks, I’ve never understood that Walmart = Crap meme. I go to Walmart and buy products from brand name companies like Heinz, Levi’s, Black & Decker, Castrol, Kodak and Bayer. Does buying a product at a lower price turn it into crap? If so, I’m happy to buy “crap.” And I must say, the people working at Walmart appear to be happily employed selling “crap.” Of course, we poor Okies never thought an unskilled job should pay $50,000 a year.
Oh, there is one “crap” aspect to Walmart. Their headquarters building is crap relative to the opulent palaces in which dwell the top executives of most big corporations.
I go to Walmart and buy products from brand name companies like Heinz, Levi’s, Black & Decker, Castrol, Kodak and Bayer. Does buying a product at a lower price turn it into crap?
If the buyer constantly infringes on the already thin margins of their suppier, yes. If they are more than happy to take a design that isn’t copyrighted or trademarked to a competitor that builds a cheap knockoff at a much discounted price, yes. If their way of keeping prices low is to pay people a pittance and offer no or shitty benefits, yes, because crap is all they can afford.
And as an aside, I can’t say I am too thrilled about the fact that much of what they sell is sourced from a human rights abusers, environmental pillagers, and trade pirates.
And yes, by all means, open these auctions to the public. I don’t see eBay as being an equivalent. Sure, there’s lots of cars, but the truth is you can’t see or touch them and they are not all in the same place. Something to be said for seeing lots of alternatives live and in person.
NickR: If they are more than happy to take a design that isn’t copyrighted or trademarked to a competitor that builds a cheap knockoff at a much discounted price, yes.
If the design isn’t copyrighted or trademarked, then you or I could legally do the same thing.
NickR: If their way of keeping prices low is to pay people a pittance and offer no or shitty benefits, yes, because crap is all they can afford.
I worked at a retailer (full-time) a few notches higher in the food chain than Wal-Mart in the mid-1980s. The pay and benefits were crappy at that time, too.
I hate Wal-Mart, I refuse to shop there or give them any of my money. And I know im in the minority since 70% of America shops there at least once a month. From my experence, past since I haven’t been there on over 18 months, is they do sell really cheap crap. Sure just about everyone is selling crap now but that is because they were forced to compete with the cheap crap and cheap american’s that buy on price and not value. I got tired of having to rebuy the stuff I bought at Wal-Mart in 6-12 months, AND put up with a crap store and crap service.
To many snobs on this site and others, a Sebring, PT, Avenger, Cobalt or the soon-to-be transplanted-to Lordstown Aveo/G3 represent crap, but to those who drive actual high-mileage, rustbucket crap they’re cars that might actually
last longer than a year.Many pray that the “new car” they put this year’s tax refund down on will last the 26 additional weekly payments and the following 26 weeks til next refund , as well.
I’d like to see the feds sell these cars to poor folks for $100 to $3000 depending on one’s income.
The buyer should IMO be required to give up a clunker– an actual running POS with legal plates, insurance, etc., to claim their car.
I’d also like to limit the program to US citizens and LEGAL immigrants.
Of course, predatory-tax states like Nebraska, who would otherwise charge sales and property taxes on original list price, would need to be given a fixed payment per car by the feds
and be forced to live with it.
Think of the environmental impact, as well, of getting thousands of oil-smoke-belching cars that leak all manner of toxic fluids off the roads.
@Redbarchetta
What products are you buying at Wal-Mart that require you to go back in 6-12 months that would be different anywhere else?
I mean seriously, I go to Walmart and buy the same groceries, toiletries, general automotive maintenance parts that I could buy at Kroger, Publix, Target, Auto Zone, etc…
And no offense, but the whole “Wal-Mart is a crappy place to work” thing just pisses me off. If you have the skills to bag groceries at Wal-Mart, you can do it at Publix too. Its not your job, its Wal-Mart’s. If they cannot find anyone to fill that position because of the crappy benefits, then they will either change or die.
Enough of the pseudo-progressive whining please…
I don’t think it’s fair to relate Americans buying crap with Walmart. Walmart offers many of the same products other stores have, just lower prices. I actually heard recently that when a Walmart opens in a poor area, the poor people’s health actually improves as they have more access to better and fresher foods (not as much processed foods).
But I realize that some people just want to hate Walmart for not unionizing, or more likely for the class of people that shop there. Just admit it.
The amusing thing about Wal-Mart bashing is that, 30-40 years ago, their ideological ancestors were running around squawking that GM was ruining the country, for sins both real and imagined.
Now many of them are the ones arguing that unless we bail out GM, life in America will end as we know it.
Supermarkets will usually have lower prices than Wal-Mart when it comes to comparing Walmart’s store brands to the supermarket’s name brands.
My family of four usually averages about $60 to $70 a week on food purchases.
I do go to Walmart for certain things such as eyeglasses, car batteries… generally things where a large retailer like Wal-Mart can excel. I do have to give complements to Wal-Mart also for offering basic health services although pharmacies like Walgreens and Eckerd may become the leaders in that area.
As it applies to cars… I really do see much of what Chrysler sells as cheaply made and extremely unhelpful to the car market. If they simply sold off the Jeep division and the minivan platform, and liquidated the rest, everyone else in this market would be better off including the consumer.
What you will see in the times to come is more cost cutting and ‘cheaper’ cars. Until the capacity and overhead issues gets resolved there’s no other way to go but down.
This is a good article from a guy who was anti-Walmart who went undercover to work there and ‘expose’ it, who then discovered that it was actually a good place:
http://www.nypost.com/seven/02072009/postopinion/opedcolumnists/fly_on_the_wal_154007.htm?page=0
getting back to the topic
isn’t this pretty much the fact that the public just can’t afford a new car at any price?
like those bargain $10k nissan versas and hyundai accents
just say they were sold at $6k with say a 1 yr warranty… even at the point i doubt people will take it because the demand for any car just isn’t there
people will just soldier on with their 1998 buicks and whatevers
unless there’s a change in the unemployment figures there’s never gonna be an upswing in demand
Trane, a division of American Standard and maker of millions of HVAC units sold throughout the world, already uses the “Dell” model for specifying, building, and selling all of their HVAC products, from small hotel-room fan coil units up to multi-million dollar units for factories, pulp mills, malls, schools, and office buildings, and has since at least the early 1990’s. You click or call (or the retailer/reseller you went through does), make your choices, and 6 to 8 weeks later your personal, customized unit (right down to cabinet paint color) is done and in a box or on a flatbed or railcar heading your way.
There is no reasonable reason the same would not work for automobiles.
On a more local level and closer to topic, local Toyota store is selling 100 unsold and “new” (under 50 miles on ’em) 2008 Suzuki’s, complete with warranty, for roughly 35% off MSRP. Lotta unsold inventory out there, and few willing to part with the $ to make it their own.
But Americans buy crap. That’s why we have Wal-Mart.
Not enough of us do, apparently. Otherwise Chrysler and GM would have no unsold inventory.
WalMart uses it’s extreme size to steer / bully suppliers into moving production to China in order to meet the prices they demand. They’re an expert at getting other businesses to lay off US workers.
Crap isn’t crap due to where it’s sold, but rather where and how it’s made. I bought some (slightly) galvanized wire fence 3-4 years ago. A lot of it is solidly red with rust now, and it’ll have to be replaced in 2-3 more years. This stuff used to last 20 years or more. Made in China of course, and bought at Tractor Supply and Lowes. If I knew of another source, I’d buy it there. I think it’s a result of big box retailing where store personal aren’t affected by unhappy customers, and hence the customer has no meaningful choice in many cases.