Car dealers offer their best deals yet
By Colin Campbell - Monday, January 19, 2009 - 5 Comments
The buyers have vanished and now the leases are drying up too
The double-digit decline in auto sales has been a disaster for carmakers—but it has been especially nightmarish for the dealerships. At Chrysler, U.S. sales are down so much (53 per cent last month) its dealerships are barely managing to sell a car a day, on average. Things are starting to look a bit like the auto industry version of Glengarry Glen Ross.
Dealer profits have actually been falling for some time now. In 2007, they dropped to $1.1 billion in Canada, from a high of $1.6 billion in 2004, according to a report last year by DesRosiers Automotive Consultants. The problem now is two-fold: not only are people reluctant to buy cars in these dark economic days, but the credit crunch has made financing hard to find even if they want to buy.
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Do auto workers make too much?
By Philippe Gohier - Thursday, December 18, 2008 at 11:33 AM - 64 Comments
Are labour costs to blame for the Detroit Three’s collapse?
Late last week, Ontario and Ottawa agreed to extend a lifeline to the country’s struggling auto industry. The provincial and federal governments pegged their bailout package at “about 20 per cent” of the amount the U.S. will commit to the beleaguered trio of Chrysler, GM, and Ford. The Bush administration announced on Friday that it would sign over US$17.4-billion to the Detroit Three, meaning Canada’s contribution figures to be in the $4.3-billion range. But rescuing car makers with taxpayer money hasn’t proven to be a universally popular idea on either side of the border, with auto workers’ wages attracting much of the scorn. On average, Canadian auto-sector workers make about $35 an hour—$72,000 a year—plus benefits. The average wage of a Canadian manufacturing-sector employee, by comparison, is $20.75 an hour, or $41,500 a year. Could the auto workers comparatively high wages be to blame for the Detroit Three’s collapse?
