Per Suede

convincingly by argument or evidence
Editor’s Pick
DECEMBER 21, 2008 4:16PM

Driven By Automotive Collapse

Rate: 14 Flag

Oldsmobile_001b[1] 

When I got a call from our Nova Scotia-based partner detailing a U.S. dealership’s suddenly closed doors in August, it signaled the start of the Big 3’s sputtering engines. Though the Big 3 are Motor City-planted, the automotive stall has far reaching effects some 1300 miles away. 

You see, I’m a Project Leader for a company whose specialty is seated in business development for automotive dealerships in the U.S., Canada and Puerto Rico. Since September, I’ve watched our client base plummet a whopping 24% so revenue shrinkage automatically sparks job insecurity. Sitting in the breakdown lane is preferable to standing in the unemployment line any day, however.   

Credit-constricted consumers simply aren’t signing the new car contract’s dotted line, extending product lull and postponing liquidity. Unless its service business is robust, a lag in vehicular movement also depletes the dealership’s till. After all, there are still operating expenses to meet.  For the average Joe, long gone are the days of the $500 down auto deal and hassle-free financing,   

Conversely, the silver-spooned suffer fewer purchasing obstacles.  A portly gentleman tooling around in a $385,575 brand spanking new black Rolls Royce Phantom replete with theater seating made me gawk with disgust recently. His fat pockets are pain-free, obviously, while the rest of the country languishes. Flaunting wealth in this recession is downright obscene.

Thus, expenses like value-added training become expedient in an interrupted economy. A $14-billion dollar governmental intervention may stave off GM and Chrysler bankruptcy in the short-term but it doesn’t put the brakes on future contract cancellations or job losses although import-branded stores like Honda, Toyota, Land Rover, Mercedes Benz, Ferrari and Maserati remain on board.   

Stuck between a rock and a hard place while awaiting the ax, I’d give anything to escape massive market uncertainty with a new job but where will the pursuit road lead? Diving into an unusually deep pool of job seekers is a scary prospect given limited availability. The mere thought of it and a racy heartbeat announces the beginning of another overwhelmed spell. Just like brushing my teeth, vacillating between anger and sadness is now embedded as routine.  

Biting the downsize bullet has been a bright spot amidst the doom and gloom. In addition to decreasing my reliance on plastic, the entertainment fund has been slashed - I've sacrificed eating and cocktailing in trendy establishments. Whenever possible, I use cash and watch every penny like a hawk. Having to reconsider a Starbucks-branded tall Caramel Macchiato, a few magazine subscriptions or an occasional movie outing registers a familiar place in the past but one I didn’t expect to revisit so soon.

Frankly, I’m mad at myself for several years of frivolous spending and a lack of savings preparedness. Forced to show off my new body in old garments, I've come to grips with how wasteful it is to add fresh  pieces when I can’t afford to clean the vast wardrobe I already own. If only I knew then what I know now, the pockets might've been housed a  heavier jingle. 

Compounded by wages that haven’t increased in the past 24 months and no tuition reimbursement perks, I’d hoped reentering academia’s halls next year would remedy career stall – that's still the plan although abbreviated funding sources won’t defer my master’s degree dreams for long. Finding a way is critical because without challenge, the mental wheels slowly rotate. In other words, I bore easily.         

And if the threat of joblessness and meager unemployment compensation isn’t nerve-wracking enough, amended credit card agreement letters have started flooding in like New Orleans’ post-Hurricane Katrina waters.  Citibank’s was the most infuriating. While my credit line remained intact, the APR skyrocketed. I’ve never missed a payment.

With a fresh stack of bailout bills in the billions, the absence of an Internet payment option for a secondary Citibank account makes greedy intentions clear – I’m so fed up with government-sanctioned ratejacking that I could cry. Times are tumultuous and the future, I’m afraid, has never looked more frightening.    

In fact, this is the worst I’ve seen and although moments of vulnerability and struggle are magnified, these experiences could translate into our greatest strengths. Life isn’t about weathering storms; it’s about learning to dance in the rain. Thus, prayer and pumping iron are my rain gear of choice during the indefinite downpour. Eventually, economic calamity will pass and no matter how bad it gets, even armed commandoes can’t rupture my faith.  The material possessions may go but this recessionista will survive.     

 

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recession story, open call

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Thank you.

The only period remotely like the one we're heading into that I can recall in my lifetime was the utter collapse of my hometown's manufacturing base (glass and clay pipes) in the early 70s. We went from a relatively comfortable lower-middle-class existence to barely-working-poor for a couple of years. The unemployment rate nationally may have been only 8 or 10 percent, but where I lived, it was in the twenties.

Scary, scary shit.
Thanks, Verbal Remedy. It's getting scarier by the minute. I weathered the dot.com's bubble burst and energy-related economic woes with success back in the day.

Today, I'm so consumed with forces I can't change that it hardly feels like Christmas as I've known it for years. Perhaps, with gift-giving diminished, we can return to the original roots of seasonal celebration. Similarly, economic downturn will allow us to devote more time to things truly important and people we love.
Go back to school and if possible, let your student loans cover that extra money that you need to at least pay down your credit cards. I understand what you're saying about the job seekers, but that doesn't mean you need to sit still. Polish off that resume and see what you can find; not every company in America is going belly up. Don't beat yourself up about not saving more; none of us have done a good job at it. As a matter of fact, now would be the time to do so. Thank God, I paid my car off this year and next year, I'm tackling my $5600 credit card balances---that should free my paycheck up a bit. At the same time, I'm still building my business. I encourage you to determine something that you can do to make some extra dough. Your writing suggests to me that you have some skills to pay the bills---so tap into them and find some consulting work or something.
Congrats on the cover selection, Suede! Well deserved.

Needless to say, I feel your pain. I have a daughter starting college in January and another in middle school, with only me in the financial driver's seat.

It looks on the surface as though it'll get worse before it gets better, but I have a feeling we'll come out of this in stronger financial shape as a nation than we've been in a long time.

In the meantime, I think we ought to start looking at land for the OS compound.

Hang in there, honey.
I think Leigh has a point about finding land for safe haven. I'm living in a co-housing community outside of Boulder now, and it's a very chill place (especially this time of year, minus 3° F. a few morns ago) and I'm thinking somewhere warmer would be better if the lights go out, where a year round garden is possible, no need for oil to push thermostats, and there's an ocean to fish in. Coastal Latin America mebbe. It won't hurt to brush up an our Spanglish anyway, the way things are heading.

I'm sorry but not surprised to hear about the malaise the fallout from auto industry collapse is causing nation wide. There was an interesting story on Democracy Now a few days ago that related how the Big 3 have all built brand new auto manufacturing plants in Europe, Asia, and South America and are now (!) ready to import small, fuel efficient autos into the USA... Finally, huh? ...and they are using the bailout (or the bankruptcy) to legally allow themselves to walk away from their contracted responsibilities to the American auto worker, (and in a deferred sense, you as well) including their retirement, benefits, and pensions.

And the U.S. government is still trying to find a way to bail them out using taxpayer funds. As stated in one of my own blogs, GM is the 23rd largest economy in the world. They're not disappearing. They're just going under the cover of lawfully finding a way to reorganize into a more profitable enterprise. We are a nation of laws, and this is what our laws are getting us. And I'm sure once they've relocated to sunnier climes, they'll still receive all the usual grants, subsidies, tax loopholes, and IRS accounting gimmicks they get now.

It's a complex issue, and a lotta people are going to get hurt in the process of what's really going on. I'm sure I don't know the half of it. Good post, extremely well written, and a personal story evocative of what so many are (or will be) going through.

Rated. Best of luck.
" A portly gentleman tooling around in a $385,575 brand spanking new black Rolls Royce Phantom replete with theater seating made me gawk with disgust recently. His fat pockets are pain-free, obviously, while the rest of the country languishes. Flaunting wealth in this recession is downright obscene."

One wonders if the 3 billion people in the world who live on less than 1 dollar a day, had they been able to watch American's gorge on "vast wardrobes" and "eating and cocktailing in trendy establishments", would have shared the same sort of disgust ?

Before you take this personally, don't. We ALL did it. I wonder if the lesson we're about to be taught over the next few years will be as savage as our grandparent's during the Depression?

Regards
RH
dynomyte :

Your thoughts on GM reminded me of NFL owners complaining to the city that nobody comes to the games and the stadium needs a re-haul or, they're leaving town. Then they make outrageous demands, say "I told ya so" and move the team into a sweetheart deal south.......where the sun is warm and ladies walk the beaches dark as honey...........
Nice post Suede. I know first hand about the automotive groups and the effects they have all the way down the food chain. It will get worse before it gets better. As a supplier to the automotive groups, I made a decision to get out and diversify into other markets. The bailout they receive is not enough to keep them around in the long run. They owe the suppliers billions and they are not going to see any of it. In fact what will happen is the automotive groups will ask the suppliers for more give backs. They have no choice and it will trickle down from there. Cut backs, layoffs, pay cuts etc.

I know how hard and scary it is to have to reinvent ourselves. I had to do it at the age of 50, and after having a business for ten years which was in the auto industry. Imagine how scared I was. Lost it all and sold the rest and went into a new line of work. You will be alright.
thanks very much for bringing this mess home,

we've been tightening our belts as well and trying to save like mad. I also worry about how this spending now is going to affect my daughter's generation,
Chandra - Thanks for planting the seeds of advice as well as the writing kudos.

Leigh - I appreciate the congratulatory pat and pray that your storm subsides soon. I'm hanging.

Dynomyte - Thanks for stopping by. It's unfortunate that GM breaks the backs of its workers given their vast contribution to propelling the company's success wheel. The little man always gets the shaft.

Roy - Yes, we've gorged but now it's time to purge. Thanks for your take.

Karol - Thanks for sharing your personal experience in the industry and encouraging words.

Umbrellakinesis - I especially appreciate the redirection. Your suggestions were right on time.

Rahul - The spending certainly doesn't bode a bright future for your daughter's generations or those to come. Saving like mad is a viable strategy.
Don't let the daily drumbeat of bad news get you down, Suede. Yes, the economy sucks and your industry in particular really sucks. But dwelling on all this will only make it worse. There are still opportunities for people who create and communicate well, as you so obviously do. It will take a lot of that creativity to get yourself out of the current spot into a safer, more secure employment situation. But you don't have to find thousands of jobs. Just one. And surely you have the skills to warrant that. Be positive, pick your targets well and you will be chosen, while others are not.
Feel ya'. Hey, we'll all survive. It was a 'hard-candy Christmas' , as my momma called it when we were broke growing up, for many this year.
Tips to survive from a guy who's been on the very bottom:
1. If you can't pay cash, you can't really afford it anyway
2. Throw an egg in your Ramen
Heck, now I have to do a post....

Another qoute from my momma ,when I was feeling down and realized we were poor,
" Baby, look outside.Them bird's is still singin' ,and they got no coat,no job,no roof over they head,no guarantee uh'duh next meal. They's jus'happy they's breathing."