Tag Archives: profits

The Bailout Worked

Vance Packard book cover According to Automotive Age, the publicly-restored car corporations are raking it in now:

American consumers are on pace to spend more than $400 billion buying new vehicles this year for the first time ever.

That’s nearly 80 percent more than just five years ago, during the recession, according to J.D. Power and Associates, which does not adjust the numbers for inflation. It’s also more than a decade ago, even though sales volumes are still lower now. Higher transaction prices have more than made up for the shortfall in volume.

The rise in revenue is comfortably outpacing the overall gain in volume as consumers shift toward larger, pricier SUVs and crossovers and away from less-expensive sedans. And the added revenue is lubricating the industry like never before.

At 2004 transaction prices, which were about $4,500 per vehicle less than today, the industry would have needed to sell about 19 million vehicles to achieve the current level of consumer spending.

“The industry is performing at a very, very high level,” said Thomas King, a J.D. Power vice president. “There’s good news on volume, exceptionally good news on transaction prices and therefore record-breaking spending. We broke the record in ’13 and we’re going to break that record again in ’14.”

Atrocious news for the planet and its dominant species, of course…

But what’s that, compared to even more money for the 1%?

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Anatomy of a Recovery

Based on Fortune 500 statistics, comparing 2004 to 2011 results:

GM
Change in Sales Revenue: -22%
Change in Number of Employees: -36%
Change in Reported Profits: +328%

Ford
Change in Sales Revenue: -21%
Change in Number of Employees: -50%
Change in Reported Profits: +580%

Anybody see a pattern?

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Maxi Cars, Maxi Profits

So, you’d think, if capitalists really did take their customers’ interests at least partly seriously, that the first generation of “alt fuel” cars would be the least efficient ones.

Ah, but as Henry Ford II once infamously quipped, mini cars mean mini profits.

Hence, Chevrolet is preparing a Volt mini-van.

The next Prius, meanwhile? A station wagon:

prius_wagon

According to Automotive News, the Prius wagon uses the standard Prius hybrid engine but “weighs about 220 pounds more” than the sedan, and “increases the [vehicle’s] drag coefficient” by 16 percent.

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Externalities, Schmexternalities

Peak oil?  Petro wars?  Climate change?  No plausible alternative energy sources?  Exploding oil rigs?  The human future?

nero Who needs ‘em and what of ‘em, when you’re a corporate shareholder?

It’s good times, baby, good times:

Honda

Kia/Hyundai

Hyundai

Ford

Nissan

Even, kind of:

Toyota

…and even…

GM

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The Original Car-Jack

trojan horse The automobile is the ultimate corporate capitalist product for a host of reasons. Among these is the fact that the car itself can serve as a Trojan Horse for duping prospects into making profoundly stupid but highly profitable extra purchases.

To wit, this report from Bloomberg Business Week, which elucidates one of the main reasons why Ford is about to post record profits in the middle of Great Depression III:

“Ford was among the first to recognize that making money is more important than moving the metal,” Johnson said. “There’s now a general level of pricing discipline across Detroit, which is leading to higher average transaction prices.”

The Fiesta subcompact, which went on sale in the U.S. in June, is fetching $3,000 to $4,000 above its $13,995 base price because buyers are ordering options such as leather seats, Pipas said. The Fiesta is commanding a higher average price than Honda Motor Co.’s Civic and Toyota Motor Corp.’s Corolla, Ford said.

Buyers are [also] paying more on average for Ford vehicles as the company introduces new…features such as voice-activated phone and stereo controls.

In other words, Ford finds itself enjoying renewed pricing power because it is using its automobiles as platforms to sell massively marked-up trivialities such as leather seats and (extremely dangerous) electronic toys.

And, in a hilarious note that speaks volumes about the myth that high social standing and academic credentials are signs of underlying intelligence and thriftiness, catch this explanation for it all:

George Pipas, Ford’s sales analyst, said in an interview. “People buying Fords today are generally more educated and affluent and they want and are willing to pay for nicer Fords.”

ROFLMFAO.

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