Timing is Everything

Wow, this morning in the AZ Republic there is an extensive article about gas prices fundamentally changing the auto industry in the U.S.. Finally Detroit has to admit that the falling sales of SUVs and trucks is not a trend or short term situation but a fundamental change in the business. Based on the chart I posted yesterday, its about time.

GM (remember them - "What's good for GM is a good for America") is closing 4 plants, costing 10,000 jobs over the next couple of years. These are plants that manufacture SUVs and trucks. They are adding shifts at plants that make cars. Their Hummer division is especially being hammered.

Now, who do you suppose was responsible for all those Hummers and huge trucks being sold? George Bush - that's who! He gave a tax credit (not a lowly deduction) for purchasing a vehicle over 5,000 lbs. or something ridiculous like that. Yes, he also provided a much smaller credit for buying a hybrid, but that batch of credits ran out very early on.

So what is going to happen to all those trucks and SUVs sitting on dealership lots? That is a reasonable question that will end up with an unreasonable answer.