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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, September 14, 2009 Changes in car business make it a buyer’s market By Mike Benbow Herald Columnist For a guy who’s generally uninformed about cars, I’ve been writing about them a lot lately. There’s a lot to write about because the recession is really shaking up the auto industry. The shake-up is scary if your livelihood depends on car sales, but it’s a good thing if you’re a consumer. Case in point: General Motors Corp. announced last week that it will give new car buyers two months to return the vehicle for a full refund. GM has to do that to return consumer confidence to its brand, but I’m still amazed that things have come to that. Growing up in the Cleveland area, where half my neighbors worked at Ford, GM or U.S. Steel, I was raised to believe that you had to buy American cars no matter how bad they were, or your neighbors would believe there was something seriously wrong with you. (At the worst, they’d call you a communist behind your back; at best, they’d think of you as a weirdo.) Things have never been that way in the Northwest, but American carmakers have still gotten a pass. There are a lot of folks who buy American to keep jobs in America. I understand and respect that — I still drive a Ford pickup — but I think those times are dimming. I think carmakers around the world are now forced to compete to earn our business. And they’re now in a position to do so. On Labor Day, I got a chance to talk with Ford Chief Executive Alan Mulally, who was in Seattle to promote the 2010 Ford Taurus. Ford has negotiated a deal with the United Autoworkers Union that will lower its labor costs to the equivalent of competitors such as Honda. I don’t like seeing American workers make less money. But that had to happen for the U.S. automakers to get a level playing field with the competition. That change alone should ensure that Ford and GM will be able to make money while giving us a fair price on their cars. And if there’s one thing that will linger after the recession, it’s that people want to spend less money in car showrooms. You only have to look at the Cash for Clunkers program, with which some 690,000 vehicles were sold, to see what happens when the deal is right. American consumers are also expecting more than a good price. They want better vehicles with improved mileage. Mulally said Ford is committed to making a full line of vehicles that are at the top of their classes in safety and fuel efficiency. The company is adding turbochargers to its vehicles to make them more efficient and more fun to drive. The lower labor costs will mean that carmakers can make money on smaller vehicles. It used to be that Ford only made its money on trucks and sport utility vehicles, but those days are over. Mulally expects a brighter future and more market share from Ford. He said that consumer perception about the company has changed because it didn’t ask for a government bailout. Skepticism over the bailout has certainly clouded consumer perception about GM. The company plans to acknowledge that in some new ads this week. The ads will also promote the company’s new car lineup. If GM’s cars are as good as the company thinks they are, a 60-day return policy should be no problem. It’s taken a long time, but I’m glad to see the attitude shift from “Buy us because we’re American to ‘Buy us because we’re the best.’ ” It’s a new era for carmakers. Car buyers can only benefit. Mike Benbow: 425-339-3459, benbow@heraldnet.com READER COMMENTS Log in or register to post new comment | Log out Article typical of Herald...No info... What is it with Herald writers? They give a tantalizing headline and a poorly-written article containing no new info and a lot of right-wing talking points. The fact that the auto industry has managed to use disaster capitalism to break the auto unions by forcing them to make more concessions will not make cars cheaper. The average price of an entry level American vehicle is $20K...Finance terms have expanded to 84 months just so your average American working poor can afford to make the monthly payments. What we need to do is dramatically change our trade policy to protect our domestic automakers. We must put tariffs on foreign cars. We must not allow China to start selling cars in the U.S. We must protect our own industries by throwing the blue-dog Democrats and the right-wing Republicans out of office! Anthony Vicari | Sep 14, 2009 8:33 am | 0 replies | View all | Post reply | Request removal

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