Mike Jackson isn't interested in talking. He's too damn busy for it. "We're crowded now," he said yesterday from the Ford dealership in Chicago where he works in sales. "We've got folks coming in and we're running out of vehicles." Running out of vehicles? Which ones? "Everything," he sighed. Gotta run. Click.
Funny what happens when the government reaches out with a fistful of cash: People will take it. Showrooms through which tumbleweeds rolled only a few months ago are suddenly busy, courtesy of Washington's cash-for-clunkers program, which offers up to $4,500 (U.S.) in subsidies to people trading in their old gas guzzlers. The scheme is being shut down, having nearly drained the $3-billion budget for it, but not until Monday night. Brace yourself, Mr. Jackson. There's one final weekend orgy of consumerism to come. Assuming there are any cars left to sell by Sunday, that is.
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Canadian auto dealers can only watch the scene in envy. Three hundred lousy bucks from Ottawa's version of cash-for-clunkers isn't going to motivate many people to make a $30,000 purchase. The success of the U.S. plan has only made the whinging here louder: We need more, more. Think big. Think in the thousands! "We believe Canadian consumers should be benefiting as well," the president of the Canadian auto makers' lobby group told this newspaper recently. "We implore the government to make a decision soon."
Yes, it should. And that decision should be to tell the auto dealers, the Detroit Three, Hyundai Canada and everyone else who's pushing this idea to go drive their sedans into the Ottawa River. If the United States wants to throw a few billion dollars more onto their roaring fiscal bonfire to subsidize car buyers, fine. But the Harperites have resisted this nonsense so far, and they're right to do so.
The clunkers junkies would love you to believe that this about saving the environment. The Canadian Automobile Dealers Association (CADA) decorates its propaganda on the subject with a picture of a car covered in lush green grass. Alas, you only need turn the page to see what it's really about: CADA provides a chart showing auto sales going off a cliff last year. It's a win-win, you see: help the Earth and the economy at the same time. That the taxpayer has already thrown $13-billion (Canadian) or so into the pot to rescue General Motors and Chrysler shall go unmentioned.
Just how bad are things on the dealership floor, anyway? Let's see. Through July, Canadian auto sales were down 16.6 per cent from the same period last year. That's largely because of the huge drops at the start of the year, when the economy was in deep freeze and financing was hard to come by. The mood has changed. The July decline was only 6.4 per cent.
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But even that number may overstate the typical car dealer's struggles. The biggest declines have been in two commodities-dependent provinces, Alberta and British Columbia. In the rest of the country, July sales were only 3.7 per cent lower.
Right now, a lot of business owners, in every sector, would love to have that problem.
The Alberta part of the story is worth a particular mention, because it's the province where, statistically, the auto dealers are suffering the most. Auto sales are down 25 per cent so far this year. But that can't - or shouldn't - be blamed solely on the recession.
During the oil boom, Albertans went mad for new cars and trucks. In 2007, they bought nearly 60,000 more vehicles than they did in 2004, according to data from DesRosiers Automotive Consultants. Sales of luxury SUVs spiked 73 per cent. For big pickups, the increase was 26 per cent. It was a truck-buying frenzy, and it was unsustainable. Sales were bound to cool off eventually.
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Is the auto industry saying that, after several golden years, Alberta's auto dealers need the taxpayer assistance? Really? Because if the only criterion for a bailout is that your revenues are falling, we can think of a long line of worthy candidates.
Sales at computer and software stores were down 11.6 per cent in May, Statistics Canada says. Perhaps it's time to remove those creaky, polluting 2006-model-year Hewlett-Packards from Canadian homes and offices. A $500-per-computer rebate, courtesy of Mother Government, would surely stimulate the electronics retailers (and imagine the productivity gains). Sales at furniture stores are lower, too.
Dollars for divans, anyone?
Mr. Harper isn't stupid. He knows Canadian factories get a free ride from the U.S. clunkers program because the vast majority of our auto production is exported to the United States. General Motors is already recalling workers at a plant in Ingersoll, Ont. Toyota is rumoured to be moving the Toyota Corolla to an Ontario plant, at least temporarily. The parts manufacturers of Ontario and Quebec will benefit. And it's paid for by the U.S. government (or rather, by its Chinese creditors).
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None of that is likely to stop the screeching in Canada for more money to subsidize auto purchases. But the next time CADA and its ilk show up in the capital to ask for a few hundred million, the Tories ought to turn their pockets inside out and say firmly, on behalf of the taxpayers: Go away. We already gave.