Scanning the autoblogosphere, I did a figurative double-take on Autoblog’s headline: 2010 Detroit Auto Show main floor is full, recession officially OVER. Since when does Autoblog do irony? Since never, apparently. Here’s the genesis . . . After a disastrous 2009, where major manufacturers pulled out of the North American International Auto Show (NAIAS) like a recently divorced billionaire riding bareback, the event’s organizers are fighting for their employer’s survival. Like any marketeer steeped in the ways of Motown, they’re going on all-out with their primary weapon: lies. I mean, baseless hype. Kool-Aid anyone? First to drink: the Detroit Free Press. “‘Every space on the main floor is full,’ a marked departure from the gaps that dotted Cobo’s display space this year because of the disappearance of brands including Nissan, Infiniti, Mitsubishi and Suzuki, show chairman Doug Fox said in an interview at the Frankfurt auto show. Fox declined to name any brands that could return because negotiations are ongoing. One leading possibility might be Porsche. The German sports car specialist abandoned the NAIAS for the Los Angeles auto show a few years ago but has been disappointed that its events in L.A. generate less global news media coverage than it received from Detroit.” That doesn’t sound smell like victory in the morning to me. A full main floor—at what price? How many carmakers? In fact, I smell something else. Not Autoblog though.
Detroit show organizers aren’t yet ready to tip their hand as to which automakers will be attending the show, but among those likely to return are Nissan and Infiniti, as Japan’s number three automaker is just too big to stay out of the North American International Auto Show two years in a row.
Too big to not let the Detroit Auto Show fail? That’s a new one. Chances are NAIAS can’t give it away. But but but—there are newcomers!
While Detroit looks bring back some automakers that were lost last year, North America’s biggest auto show could also bring in some newcomers. Fiat’s partnership/ownership of Chrysler could mean that Fiat and Alfa Romeo models wind up parked near the Chrysler booth. India’s Mahindra group, which is looking to sell trucks and SUVs here in the States, could be another option, as could China’s BYD.
In fact, this spooky: volume over profitability. Instead of retreating to a smaller venue and trying to add value, the show’s doing the same thing it always has and—you gotta believe—cutting margins to nada. Meanwhile, if you’re looking for signs that the recession is over, or that Autoblog is in the spade calling business, this ain’t it.
I would say in a very short number of years, there will be no Detroit built cars at the Detroit auto show.
I’ll take a booth for my new Curry Mu-Shu. It will be the biggest hit.
Pretty easy here…make the main floor smaller. Just as airlines remove seats to be able to fill faster and charge more by telling everyone: “The main floor is full! The main floor is full!”
Re. Autoblog, if they could wear pleated wool skirts and hold pompoms that bore GM logos, they would. Even Jonnie!
The recession isn’t officially ended till the iPhone has a “Jobs” app.
OK, let’s take this situation and translate it into your everyday life.
Let’s say your boss is an asshole who you never got along with, and he finds an excuse to fire you. Are you actually going to tell that to the next company you interview with?
Are you kidding?
It’s like my dad always said…if you can’t dazzle ’em with brilliance, baffle ’em with bullshit.
The good news is that we can skewer this on blogs like this… :)
The Detroit Auto Show isn’t going anywhere – even if GM isn’t the world’s largest automaker anymore, the D3 are in the top five, so the nations biggest auto show is still important.
Shrinking to a smaller venue would be catastrophic, you need to have a big show with big hype and lots of spectacle to create buzz. The gaming and electronics industry tried to go small with E3 but it failed, and they went right back to big with the last show.
One thing they could do is to use the name “Detroit” since it is synonymous with the automobiles in ways that NYC, Chicago and LA will never be. So what they can do is use the name “Detroit” and call it the Detroit North American Auto Show and have it travel to a different city each year much like the Super Bowl. Host it in Vegas one year and Miami the next. Make it a one big travelling event.
Federal Reserve Bank of Philadelphia Business Outlook Survey
Why drive two hours in the dead of winter, pay for gas, the ticket, and parking (if you find any) to go to the stupid show to see fairy tale concepts that will never look as good in production versions, (andmany are not even produced, ever) and which you can’t touch, or even get in,
instead of going to your local dealers and test drive the hell out of the real new cars for totally free?
The Detroit North American International Autoshow – Live from Newark!
Every year, the most offensive part of the Detroit Car show is the god-awful coverage of the event by the morons of Channel 4. The idiots make it not about cars, about which they would not care less, but about the stupid designer outfits the various aging dogs and trophy wives are wearing!
The TV coverage is sickening.
Autosavant :
September 20th, 2009 at 3:29 pm
Why drive two hours in the dead of winter, pay for gas, the ticket, and parking (if you find any) to go to the stupid show to see fairy tale concepts that will never look as good in production versions, (andmany are not even produced, ever) and which you can’t touch, or even get in,
instead of going to your local dealers and test drive the hell out of the real new cars for totally free?
On the contrary – I’ve found these shows to be great car-shopping tools. Instead of showing up to 10 car dealerships and enduring the stupid before-test-drive and after-test-drive runarounds, you get to sample the cars you want to check out, without a salesman hanging over you. Then you go test the ones you like.
I’ve found it to be a huge time saver. Besides, a friend of mine works for a car dealer, so he gets me in for free.
This year at the Denver show, the local Aston dealer opened up their cars and let us mere mortals sit in them. Bliss…
“On the contrary – I’ve found these shows to be great car-shopping tools. Instead of showing up to 10 car dealerships and enduring the stupid before-test-drive and after-test-drive runarounds, you get to sample the cars you want to check out, without a salesman hanging over you. Then you go test the ones you like.”
But by the time they show the cars, we have already read all about them in tests on the web and in auto mags and have pretty much made up our mind.
In my case, the above is even less of an issue, as I will never buy new again, regardless of how high my budget will be, unless there are new safety etc breakthrus that used cars do not have. But my 12 yr old 740iL, which i bought for almost half of what the lowest Kia goes for new, has all the systems I would ever wish and then some.
When a car like the above sells for over $100k new and you can buy a perfect shape 7 yr old copy for one tenth of its value, why bother go to any dealer except for fun, to look around, get brochures, and test drive once in a while, to make sure you are not missing much.
+1000 to autosavant…save on the HUGE hit for depreciation (I don’t care what you drive, when the wheels come off of the lot, you’ve lost a ton of the value before you’ve driven the first mile). And don’t preach about zero percent financing….you’re still making payments over the long haul of a piece of machinery that is losing value each month you own it. My days of brand new car purchases are also over…but I do enjoy going to automotive shows and sitting in just about every car I can get my heiney into!
Remember Robert, the Detroit NAIAS is show managed and put on by the local dealers. Also, it has only been an ‘international show‘ for 21 of it’s 102 years, thus it is still permeated with the ‘local show‘ promotional flavor and mentality-ergo the hyperbole from the Free Press et al…
Mr. Fox is a prominent dealer of many different nameplates and is obviously dispensing the Kool-Aid generously. As for ‘news outlets’ lapping it up…well that’s on them.
I am sure one of the most popular events for the last few years has been the Micheline Maynard look alike dunking booth for charity.
Anything is much cheaper used vs new. You can pay $8.50 for a movie ticket opening night, or see it at the dollar theater after it has been out for a couple months, you can spend $40 on a new polo shirt at the mall, or buy the same shirt for $5 at Goodwill. Almost every new car lot has a used lot attached and salespeople love it when the customer goes for the used cars because it makes it easier to hit the payment they want and still make a profit on the car. For whatever reason though there are still those out there who will only buy new, regardless of the shape of the used car, certification programs, warranties, service records, etc.
Not sure what all that has to do with the auto show though…
There’ll always be a “Detroit” auto show …. in the sense that there is a Cleveland and a Pittsburgh and ~80 other regional auto shows.
It might be in a half full (crumbling-water-leaking-on-the-cars)Cobo or at a nice, suburban, but tiny Rock Financial …but it’ll go on.
On the other hand, there very well may NOT be a “DETROIT (NAIAS) AUTO SHOW”… in the sense that it has global import and million dollar displays and shrimp-eating journos from around the world watching Jason Vines lead cattle drives down Jefferson Ave and CEOs flogging press reveals, etc.
Those days may be long gone forever. …and perhaps they should be.
I’m probably in the distinct minority, seeing brown, dead weeds instead of spry ‘green shoots,’ but until there is job creation, with decent wages at that, instead of job destruction, with horrid wage deflation for those with jobs, like now, I just can’t see any recovery on any horizon.
Also, the economies of Chindia, and many more countries, for that matter, have been bolstered by self-limited stimulus (China has spent far more as a % of its GDP than the U.S. to stimulate domestic consumers), and won’t return to normalized or natural growth until U.S. consumers start buying their exports again (Chinese exports to the U.S. fell 42% in the first 6 months this year).
Also, much of the money being printed is being quickly vaporized as banks and financial institutions use it to plug holes in their balance sheets, write down loan losses (there’s a whole lot more of that ahead), and recapitalize.
I’ll go one step further; I see worse times ahead, for most, if not all, developed and emerging economies of the globe.
“… major manufacturers pulled out of the North American International Auto Show (NAIAS) like a recently divorced billionaire riding bareback”
Whatever you go on to do after TTAC, Robert, please don’t stop making hilarious metaphors.
“threeer :
September 20th, 2009 at 4:20 pm
+1000 to autosavant…save on the HUGE hit for depreciation (I don’t care what you drive, when the wheels come off of the lot, you’ve lost a ton of the value before you’ve driven the first mile). And don’t preach about zero percent financing…”
PS I always bought with cash, whether new or used, except once when we got a civic hatch and we foolishly went with payments.
If I ever went to buy a new (or certified used) car and they offered 0% financing, I’d ask them to show me how many $ this 0% deal saved me, then I’d demand that I pay cash after they subtract that amount. And if they don’t agree, I’d be out the door before they knew it.
PS2 so you own a 3 series? I always liked the 99-05 3 coupes. Very elegant designs, better than even the “bangled” current ones.
Re: ohsnapback … employment rates, labor cost per unit and overall firm profitability are lagging indicators. That is, they confirm what has happened in the past. Even the statement of GDP change (and subsequent statements of recession) are lagging indicators. It’s convenient to be able to sit back and wait for lagging indicators to appear before arriving at a business conclusion. But waiting for these lagging indicators makes you extremely reactionary and you’ll lag behind the changes that others are proactively engaged in predicting.
The separate points you bring up about the US Fiscal and Monetary policy are reasonable concerns. I’m pointing out that in the manufacturing realm, you cannot simply turn up a dial overnight to adjust to market changes. Rather it can take years to get your supply chain and manufacturing capability up to snuff. Waiting for your lagging indicators to be desirable is easy for bloggers but ineffective in practice.
Read that link I posted above from the Philly Fed Bank; they survey business people in various manufacturing sectors. Those people in the trenches are noting your concerns of current wage and employment struggles. But on average, they are predicting a rebound in the coming months; and they’re setting the leading expectation on what to build/supply in the marketplace.
Keep in mind that corporate marketing departments are the ones that plan and organize trade shows, which when business slows down, the first thing a company does is lay off marketing (ask me how I know).
holydonut:
Typically, during business cycle recessions, employment and wages are ‘lagging indicators,’ and you are correct inasmuch as they only show measurable improvement well after a recovery is under way.
However, at least consider the real possibility that this is not a normal ‘business cycle recession’ of the garden variety, but rather, a deep, vicious structural re-ordering of the deck, where whole industries have gotten wiped out in the U.S., creating a permanent wave of unemployed (people not likely to be rehired at even 30% of their former wage as their company shut down or left the U.S., and they are nearing retirement age; people who trained for jobs no longer offered in any meaningful number here; people who have skill sets where the supply for those workers greatly exceeds anything the market can absorb for as long as the horizon is).
This is not a typical recession, short and shallow. This is the deepest restructuring of the U.S. economy and ‘normalized’ levels of employment since the 1940s, but unfortunately, in the negative direction, rather then positive, expansionary kind.
The fed data recently released is deeply skewed by short term stimulus efforts, also, such as CFC.
ohsnapback … I can consider the possibility of the Armageddon-type restructuring that you paint, but I don’t have any evidence to support those predictions.
Rather, the items that I do have access to show signs of economic recovery. While it’s fun to speculate about the most horrible scenario ever, I haven’t seen much evidence to support it. Well that Mayan Calendar is kind of ominous.
Bloomberg’s financial conditions, the New York Fed, The Conference Board all expect recovery. These are some really intelligent people with a lot of information drawing conclusions. Some may have conflicting interests (ie Bloomberg) but the Conference Board has no affiliation/rational care to the markets.
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1
Oh, and the Philly-Fed survey goes out to 250+ firms in the 3rd Federal Reserve District (which excludes Newark). Each of these firms must employ over 100 people and have a business activity centered around manufacturing. It isn’t a query of the Big 3 automakers and associated suppliers.
I don’t believe that the following perfect storm is happening:
This is one massive conspiracy perpetuated lots of economists… and these economists are blatantly mis-representing data to fool the public… and the businesses all over the USA don’t know how to forecast/plan their businesses properly because they’re fooled by federal stimulus efforts (one that almost everyone here argues is obviously ineffective)… and all those business owners are dumber than a group of bloggers.
holydonut:
I’m a simple guy. I guess it suffices for me to say I don’t believe jacksh*t the fed or any other institution or person (even the “smartest” of people) tells me unless they can tell me with credibility where future job creation will come from.
The U.S. is still the driving force of consumption globally. China’s economy is a fraction the size of ours.
You can have 0% interest rates, no payments for 10 years, and if the banks are not loaning money, and if people have no jobs and not great prospects of getting jobs, anyone telling me we’re in for better times should save their breath or go talk to a boulder or fence post.
Smart guys blew up Long Term Capital Management, smart guys blew up the housing bubble into a catastrophe assuming 8% per annum appreciation forever, and smart guys crashed the banking and financial system giving NINJA loans and selling derivatives and CDOs.
ohsnapback :
What constitutes the creditability that you seek? Does it need to be in scripture? Does Kanye West have to interrupt Monday Night Football and tell you? I really don’t know what you’re looking for… because it seems like you’re setting unreasonable expectations and condemning all sources.
Yes I’m sure the super-doomy expectations (especially those held by RF) are fun to write about. In the past RF was quick to brandish the “new housing starts” as evidence of doom and went about mocking other pundits who didn’t share his negative outlook. But then New Housing Starts went up in August and he is suddenly mum about it… he’s probably searching for more doom and gloom metrics to band around.
Yeah, some selfish a-holes who decided to create a derivatives market of sub-standard banking assets destroyed the economy . And yeah, some politicians decided to spend your tax dollars to help out others who lobbied to get a pass at the bailout buffet. And yes the economy has been in one gigantic clusterfu** the last few months. Unfortunately we (peons) cannot do much to stop institutional greed. At least, I don’t feel like putting my efforts to the fight; since I’d rather adapt and run with it.
So, you and I both know that jobs come from business owners or from the Government (but let’s exclude the latter set since that’s a topic of endless bitching). Business owners are indicating a belief that forward looking 6 month period is optimistic, then that means they’re bumping up capital expenditure; planning for longer shifts / more shifts; buying raw materials; etc. That is why the Philly Fed polls business owners. And that’s why I would recommend that people look at these things.
If you still don’t believe the high-up brain-trust then ask your local garbage man if the volume of garbage at restaurants and homes has gone up lately. The volume of local garbage is a great way to see if consumption is increasing in your local area… it’ll be a fun experiment. I know a garbage truck driver (I am not making this up) and he has indicated that their routes have become increasingly difficult of late.
holydonut: Bernanke told us all we’d avoid a recession and the banking system was healthy prior to Bear Stearns collapsing.
A 0.6% rise in leading indicators on what could be literally a statistical reporting anomaly or may even be a genuine uptick on stimuli is not getting me all hot and bothered, and as many credible economists have warned, beware of the W (double dipper).
I’m sorry if you interpret my realism as pessimism. Sometimes the economic glass really is half full.
Let me know also when the banks clear their toxic assets, rather than have congress change their accounting methodology so they can report fantasy valuations, and keep kicking the crisis can further down the street.
You and millions of other Americans will see what happens to any country, even ours, when you have close to 22% unemployment using u6 metrics, and that number is STILL rising, and a near-permanent class of unemployed/underemployed is created in here.
HolyDonut:
What constitutes the creditability that you seek? Does it need to be in scripture? Does Kanye West have to interrupt Monday Night Football and tell you? I really don’t know what you’re looking for… because it seems like you’re setting unreasonable expectations and condemning all sources.
A Great Post and observation… The truth is that no one wants to admit that counter cyclical spending works!… It worked for Eisenhower, It worked for Reagan and it is working now… You CAN (and should) prop up an economy with Government Stimulus. We are seeing signs of recovery everywhere. Even my broker is dancing in the streets this days as the market approaches 10,000 again… wow that was fast.
The truth is that smart people got us into this mess, but even smarter people profited from it… my Broker was telling everyone who would listen to “Short the Banks” we made a killing in the “crash” Now the advice is to get back into the game… The Recession is over… The first people to figure this out are the ones who make all of the money.
For the love of Pete, Camarokid – the economy is intensely worse now than it was prior to the epic fall of September 2007.
But then again, Wall Street thrives when the sheeple pile in to market tops. That’s how money changes hands in significant sums…from the average investors account to the hedgies and other front running firms.