Auto industry woes confirm the obvious

The numbers tell the story. U.S. sales by the Ford Motor Company fell 34% last month. General Motors was off 16%. Even economic Hyundai reported U.S. sales off by 25%. It’s the economy. “Even if you have good credit, there’s a reluctance to pull the trigger on a big ticket item,” Jim Farley, Ford’s group vice president for marketing, told the AP.

Toyota Motor Sales U.S.A. saw a 32.3% drop in sales in September. Even American Honda Motors September sales tumbled 20.9%.

“That whole Wall Street versus Main Street argument was cute for a minute,” Gimme Credit analyst Shelly Lombard told Forbes. “But by now it should be clear to anyone who can see that there’s only one street, and traffic on it has ground to a halt.”

Even if the auto industry gets loans to build new cars, consumers may not get the loans to buy them.

This is, of course, terrible news for local media companies, because auto advertising is still one of the top categories for revenue.

People wonder how last month’s economic meltdown will impact them, because they don’t “feel” it right away. The malls are still filled, so people have money to spend. It’s as if nothing’s wrong at all. But these things tend to trickle down, and I fully expect next year to be one of the most difficult in modern U.S. history.

When automakers don’t sell cars, people start losing their jobs. It doesn’t just impact the big car makers themselves, it influences every support industry as well. Some of those jobs will never come back. Dealerships go out of business. Bill Heard Chevrolet, at one time the most dominant Chevrolet dealership in the country, has filed for bankruptcy and shut down its stores. That puts more unemployed — well-paying jobs, I might add — on the streets.

As people tighten their belts, everything is affected, and the economy contracts.

The Dow Jones Industrial average has lost almost 21% of its value year-to-date. This means, on average, every investor dollar at the beginning of the year is now worth 79-cents. Of course, it doesn’t work that way; in some cases, people have lost a whole lot more. This includes retirement savings and much more.

I still remain positive despite all this, however, because down times like these produce opportunities that only come along rarely. Sometimes, people don’t embrace change or true innovation until their backs are absolutely against the wall, and I feel very confident about the future, especially for my kids. This calamity, while certainly sad and difficult, was ultimately necessary, because we’ve behaved as if money grew on trees.

If I’m a media company today, I’m deep into exploration of revenue models for the Web, and not all of them involve the creation of content. I’m doing everything I can to reduce expenses and re-engineer my old media systems and infrastructure. I act as though 2010 will be the turnaround year, and get comfortable with survival mode.

If I work for a media company, I’m spending time that used to be dedicated to simply enjoying life and using that time to study, learn and practice for the days that lie ahead. There has never been a time like this that media people need to reinvent themselves, and I’d be out front in that quest.

For everybody, there’s the age-old advice to get out of debt and watch your spending.

We’ll get through this. We always do.

Comments

  1. I really, really, really hope your optimism is well-founded. I fear that isn’t for the simple fact of how much has changed in the last eight years. I am only 30 years old, but I sound like a nursing-home resident everytime W is on the teevee. “Free speech zone? I remember when the whole country was a free speech zone!” My Grandfather, a WW2 vet who believed in this country and sacrificed for it, died when I was 7. I still remember his pride in talking about freedom of speech. He has surely spent most of the last eight years rolling over in his grave. And that’s not even touching the way the President has become an elected king via signing statements without the opposition party doing anything to stop it from simple fear of being labeled “unpatriotic….”

    So yes, we always HAVE gotten through bad times. But are we the same people we were before? I don’t know. We certainly don’t have the same freedoms. Ask Amy Goodman. Ask all of the people on the “no-fly” list. Ask the people sitting in Gitmo without charges or access to lawyers.

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