Mike Jackson: "Look At This Fine Mess You Got Us Into"
AutoNation’s Mike Jackson at World Congress
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And yes, we’re talking about the CEO of Autonation, not the one-glove guy. Jackson’s keynote adress to “fellow survivers of 2008” at the Automotive News [sub] World Congress was TTAC-ish enough to be dubbed a “truth-serum” speech by AN’s David Sedgwick. Accompanied by the Laurel and Hardy influenced powerpoint presentation above, Jackson breaks down the great downturn of 2008 with wit and insight. He blames captive lenders like the “General Motors Rejection Corp,” and states that for 95 percent of the market, the price of gas determines the kind of vehicle they want. Check out the changes in captive lender approvals and the $10k swing in Prius residuals over the last year for some compelling evidence that he’s right. Listen to the whole speech below for a concise overview of the year that turned an industry on its head.
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He said it all in one single statement; the USA does not have a coherent national energy policy. Great link, thanks Edward Niedermeyer.
That is indeed an interesting presentation. Few CEOs can speak as well about their companies and their industries. Ford CEO Mulally's presentation was fluff where this one is substance. Maybe Mulally could do something like this too if he was slotted into the program differently. But I doubt it. And can you imagine Wagoner or Nardelli doing this? I cannot. Still, I think his ideas are off target. I do not think the key to stabilizing the housing market is to drive interest rates below 5%. Nor do I think that car sales will rebound as people with poor credit can once again get car loans. Or to put it another way, I do not think that the car sales that have been lost are due to the lack of financing. His ideas about the stimulus are pretty strange, too. The more the better, huh? No problem spending a trillion dollars? Okay, let's make it two trillion. Or three trillion. Or ten trillion. Inflation? Not my worry.
dastanley, thanks much for the L&H info! PeteMoran: "He said it all in one single statement; the USA does not have a coherent national energy policy." Yes, it's not coherent, but I like to say we do have an implicit policy: to muddle along in an uneasy balance of power between political factions, none of which can impose their view upon all others. This is not unusual in our messy, democratic, porous and diverse, continent-size, federal, checks-and-balances system wherein it is easier to block change than to implement it. Often it takes a crisis (real or perceived) to overcome inertia and impose a universal policy. The late but unlamented 55 mph national speed limit is a good example.
…an absolute MUST listen. You came for the truth about cars, here’s a platter of it. Take-Aways: 1) Car dealers sell a product into a market where only 10% can sit down and write a check for it. For everyone else, that cost must be spread over 3-4 years. 2) General Motors and Chrysler auto financing arms are, for all practical purposes, out of the auto financing business. This is hugely negative to 90% of the GM and Chrysler new car sales. 3) Ford auto financing arm is still in the business of financing autos. Ford dealers can much more readily turn that loan app, present in 90% of new car sales, into a sale. Ford is able to move more units because of their ability to finance their cars, not necessarily because of a better product mix or higher quality. 4) Floor traffic at AutoNation is at about the 12.5M sales range but actual sales trend is far lower as 90% of the new car market is taking a heavy hit with lack of financing. 5) Car quality is just fine across the board. Comparing a Malibu to a Camry or Accord is pointless. Compare any new car with the POS they drive in with and this is where the sale is made. 6) For 95% of the new car buyers, the price of gas dictates the car they want.