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View Full Version : The 'numbers' are in....



Uncle Bill
01-13-2010, 12:47 PM
...and what most of the right thought the Obama cash for clunkers was really all about. Wasn't it fun? UB

A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.


A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.


So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.


They claim 700,000 vehicles so that's 224 million gallons saved per year.



That equates to a bit over 5 million barrels of oil.



5 million barrels is about 5 hours worth of US consumption.


More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars.



So, the government paid $3 billion of our tax dollars to save $350 million.



We spent $8.57 for every dollar saved.




I'm pretty sure they will do a great job with health care, though.

YardleyLabs
01-13-2010, 02:18 PM
I have not read it yet, but Paul Ingrassia, a Republican reporter for the WSJ, just published a book titled Crash Course: The American Automobile Industry's Road from Glory to Disaster. Ingrassia has reported on the industry for the WSJ since 1985. He opposed the various elements of the auto bailout and was one of those deriding the inexperience of the people appointed to the auto task force. His comment in an interview this week on NPR was that he was amazed at how well the auto task force forced the industry to address core issues to become competitive, and stated his belief that, at an initial cost of $100 billion (some of which will come back), the bailout program clearly saved the US auto industry and that he believed that the investment had proven to be worthwhile. Ingrassia indicated his belief that the taxpayer would be out of the auto business in 2011. I was surprised by his comments and cannot comment on his analysis. However, I have ordered his book, so I guess he accomplished his primary objective (selling books) in the interview.;-)

The relevance to this thread is pretty straightforward. Fundamentally, the CFC program was part of the auto bailout.

Franco
01-13-2010, 02:32 PM
I have not read it yet, but Paul Ingrassia, a Republican reporter for the WSJ, just published a book titled Crash Course: The American Automobile Industry's Road from Glory to Disaster. Ingrassia has reported on the industry for the WSJ since 1985. He opposed the various elements of the auto bailout and was one of those deriding the inexperience of the people appointed to the auto task force. His comment in an interview this week on NPR was that he was amazed at how well the auto task force forced the industry to address core issues to become competitive, and stated his belief that, at an initial cost of $100 billion (some of which will come back), the bailout program clearly saved the US auto industry and that he believed that the investment had proven to be worthwhile. Ingrassia indicated his belief that the taxpayer would be out of the auto business in 2011. I was surprised by his comments and cannot comment on his analysis. However, I have ordered his book, so I guess he accomplished his primary objective (selling books) in the interview.;-)

The relevance to this thread is pretty straightforward. Fundamentally, the CFC program was part of the auto bailout.

Saved the domestic U S auto industry? That would be news to them! New auto sales by the Big 3 are at an alltime low. You can read about that at freep.com which is Detroit's newspaper on line. Car sales died when CFC ended. The auto-bailout will cost taxpayers billions and will only delay the inevitable. Until the Big 3 is willing to take on the UAW, domestic car mfg's are doomed.

Ford could have made it on thier own except they have to compete against the gooberment/tax payers.
http://freep.com/article/20100113/BUSINESS03/100113036/1320/Supplier-chief-calls-for-more-cash-for-clunkers

Obamo's auto czar wants more CFC to jumpstart sales. This gooberment ownership of Government Motors is a looser and will cost tax payers more.

YardleyLabs
01-13-2010, 03:38 PM
Saved the domestic U S auto industry? That would be news to them! New auto sales by the Big 3 are at an alltime low. You can read about that at freep.com which is Detroit's newspaper on line. Car sales died when CFC ended. The auto-bailout will cost taxpayers billions and will only delay the inevitable. Until the Big 3 is willing to take on the UAW, domestic car mfg's are doomed.

Ford could have made it on thier own except they have to compete against the gooberment/tax payers.
http://freep.com/article/20100113/BUSINESS03/100113036/1320/Supplier-chief-calls-for-more-cash-for-clunkers

Obamo's auto czar wants more CFC to jumpstart sales. This gooberment ownership of Government Motors is a looser and will cost tax payers more.
As I said, I ordered the book. However, after widespread convictions that sales would tank once the CFC program ended, all of the major manufacturers saw substantial year over year gains in December sales (See http://seekingalpha.com/article/181195-ford-leads-the-way-in-december-auto-sales).

Franco
01-13-2010, 03:51 PM
As I said, I ordered the book. However, after widespread convictions that sales would tank once the CFC program ended, all of the major manufacturers saw substantial year over year gains in December sales (See http://seekingalpha.com/article/181195-ford-leads-the-way-in-december-auto-sales).

Yea but, Gooberment Motors was down 6.1% year to year and Chrysler was down 3.7% according to the sight you posted.

The government program help the foreign auto makers, not the domestics!

Only Ford with an increase of 32.8% year to year looked solid and probably a result of buyers revolting against the goob takeover.

K G
01-13-2010, 04:10 PM
Jeff, if you REALLY want to know what's going on the car business, why don't you visit a few lots and talk to the folks selling cars...THAT is the way to learn about the car business.

Franco and I do this for a living and it is TOUGH in the car business right now....you don't need to read a book to find that out. CFC did NOT save the automobile industry...all it did was move up the new car sales cycle about 45-90 days, sell out new car inventory when plants were shut down or cycled down, and DECIMATE the used car business by removing inventory and pushing used car prices higher than they've been in years.

And I'm not even talking about the credit crunch and what it's done to the car business....:rolleyes:

kg

YardleyLabs
01-13-2010, 04:54 PM
Yea but, Gooberment Motors was down 6.1% year to year and Chrysler was down 3.7% according to the sight you posted.

The government program help the foreign auto makers, not the domestics!

Only Ford with an increase of 32.8% year to year looked solid and probably a result of buyers revolting against the goob takeover.
What do you expect based on the depth of the recession.?

Comments made on a previous CFC thread:

With Cash For Clunkers now over, how will new vehicle dealers sell cars and trucks now?

New vehicle dealers are now getting ready for a big slow down as consumers have been trained to only buy when there are huge factory rebates. Now, those same huge factory rebates aren't enough to stimulate sales.

CFC may have stimualted business for one month but now the manufactorers and retailers are going to have to pay the devil.


And they will be called in long enough to restock the dealers....then we will be right back where we were before CFC and I imagine most of them layed off again. It will take another CFC to sell enough cars to have another round of substantial re-calls of workers.

CFC, while a nice short term shot in the arm for the industry, does nothing for the long term fundamentals of that business. You can apply that to any business....we are about to see the same thing for refrigerators.

There was, in fact, a drop following the end of the CFC program. However, sales began recovering again in October and took off in November and December. Does this ean the industry will return to pre-recession levels? I doubt it and actually hope it doesn't. I think the sales levels of the early 2000's were driven by excessively easy credit and an inflated sense of wealth linked to the housing bubble. However, saving the industry, in my mind, was never about allowing the industry to continue doing what it was doing before.

http://static.seekingalpha.com/uploads/2010/1/6/saupload_december_2009_chart.png

The objective is to have rational companies with a stable market of reasonable vehicles. By that measure, we may be seeing the early stages of a substantive recovery. It will be some time before we know how much the overall bailout cost -- at least two more years. That means it will also be some time before we can fairly assess whether or not the benefits to the economy as a whole warranted the expense.

I think it is clear now that this was not the first step of a permanent government takeover of the auto industry. Just as the banks have been acting quickly to get the government out of their businesses by repaying the loans, and the government has been letting them, the auto companies will also work to buy out government shares as quickly as possible and the government will let them. I see no evidence of a government looking to take over.

K G
01-13-2010, 05:02 PM
However, sales began recovering again in October and took off in November and December.

Compared to '08, they had nowhere to go but up....

kg

Franco
01-13-2010, 05:18 PM
Compared to '08, they had nowhere to go but up....

kg

Yup, last quarter of 08 was the worse for new auto dealers.

The government had no right to get into the auto business and proping up a flawed businesss model. But then again, Obama was just paying off the UAW with tax payer money for thier support!

Art Geddes
01-13-2010, 08:42 PM
Probably the best thing about the cash for clunkers program was that it took a whole lot of OBAMA bumper Stickers off the road!

Art

Franco
01-13-2010, 09:01 PM
Probably the best thing about the cash for clunkers program was that it took a whole lot of OBAMA bumper Stickers off the road!

Art

Nice thought but, buyers had to be credit worthy.

If they do this CFC program again, I wouldn't be surprised to see the government underwrite subprime loans for auto buyers added to this stimulus package.

Terry Britton
01-14-2010, 11:34 AM
Yea but, Gooberment Motors was down 6.1% year to year and Chrysler was down 3.7% according to the sight you posted.

The government program help the foreign auto makers, not the domestics!

Only Ford with an increase of 32.8% year to year looked solid and probably a result of buyers revolting against the goob takeover.

What really saved Ford is their foreign positions. Sometimes being a global company can save a company when things tank in one country such as the USA. In their foreign settings, they aren't handcuffed by unions, and rely on more efficient production models off of 3 frames rather than the crazy expensive numbers they require to compete in the USA.