Your Tax Money Hard at Work: ChyCo to Offer 0% or $4K Discount Deals
Ford is starting to get pissed off at the feds for rewarding their cross-town rivals’ failure, taking bread off their table. On Monday, FoMoCo spinmeister Mark Truby pointed out that “If you’re competing against a company that’s majority owned by the U.S. government, that does raise certain concerns about what the competitive dynamic will be for the industry.” Translation: will Chrysler and GM use taxpayer money to keep customers from defecting to The Blue Oval Boyz (amongst others). Yes they can! The Associated Press reports that Chrysler is tapping into bailout bucks to launch a fresh round of incentives to keep pumping blood into the Auburn Hills automaker’s corpse: 0 percent financing for 60 months or up to $4,000 cash back on “certain” 2009 Chrysler, Dodge and Jeep models. Oh, and Chrysler owners get $1,000 loyalty cash towards a new 2008 or 2009 car. Yes, 2008. Chrysler says the promotion runs until July 1. At the least.
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For the last 50 years GM has run with the idea that money on the hood moves iron. Period. No matter how bad the unit stinks up the lot, slap a “SALE!” sticker on it and out it goes. A not insignificant number of people view an automobile as nothing more than an expensive appliance they would rather not have to fool with. They form a line at the door when Chrysler offers 20-50% off MSRP on nearly everything on the lot. They are doing this in Seattle however crowds are reported sparse. After that sales surge is tallied, Chrysler is positively giddy with the results and crows their sales are only down 47% for the month of May.
@superbadd75 If I could BUY a new Caliber for $4000 or less, I'd think about buying one to drive to work.
"GM suppliers are Ford suppliers. That means many would close with GM and with it Ford would die." I've never really bought this line. They would have to radicaly and quickly downsize and increase their prices to reflect the loss of numbers, but Ford and remaining buyers would pay this, because as you said, there is not another seller. Its supply and demand.. just because some of your demand has dried up, doesn't mean all profitability has. A smaller leaner company can still make good profits for the owner.
This is the essence of what's wrong with the government bailouts. It is not so much the monumental, futile waste of tax dollars so much as the violation of Darwin's law of natural selection. As RF pointed out on Al-Jazeera, the concept of creative destruction, and allowing the weak to fail, is what makes capitalism so strong. What we are witnessing these days is one of the most profound threats to capitalism the U.S. has ever seen.