Month: October 2003

Yesterday’s Sunday newspaper was interesting. It was not interesting for the headline reading “Roy fights for life,” although I do hope both Roy and the Montecore are alright. Far more interesting was the note next to the masthead: “More than $60 in coupons and 1600 job listings inside!”

Those 1600 job listings sure sound like the sign of a good economy. An optimist would point out that those are only the listed jobs, and doesn’t include the type of job one must see an agency or a recruiter about. However, this is the kind of town where even jobs for Doctors and Lawyers are put in the newspaper, so don’t get to thinking those 1600 jobs are a small fraction of the jobs available. Furthermore, some percentage of the available jobs are part time, reducing the number of actual “career opportunities.”

Another unfortunate fact about those 1600 job listings is the fact that this area is growing wildly. The county adds 5000–7500 new residents each month. Even if half those people are children — and yes, the school system is strained by the ever increasing number of students — suddenly 1600 jobs isn’t that much.

Driving around town, there are other signs that all is not well with the local economy. The overwhelming majority of apartment complexes have large banners proclaiming “$99 Move In Special,” or simply “Free Rent.” And remember, this is in a rapidly growing city with a relatively vibrant local economy.

Those $60 in coupons are looking awfully appealing.

If you do no other reading today, take a look at what the Canadians have to say about our economy, and this summary of American economic prosperity in the real world by Jonathan Tasini. Frankly, I could not have put it better.

Step one, make a car that people want. Step two, sell it for a price that people will pay, and yet is higher than the cost of designing, making, selling, and delivering the car to the final customer.

Alright, that was oversimplified.

As I write this, the large American auto manufacturers are trying desperately to sell cars. Ford has announced layoffs. Chrysler has announced $4000 incentives on brand new 2004 vehicles and $5000 on 2003s. GM is offering no-cost loans — something they are only able to do because they both build and finance the car. The number one item if you search Amazon.com for “American Cars” is “The End of Detroit: How the Big Three Lost Their Grip on the American Car Market.”

Meanwhile, the Japanese are selling cars almost as fast as they can make them. Honda and Nissan are both doing well, but by far the biggest success story is the redesigned Toyota Prius. You may remember the Prius as a very small, rather pricey hybrid car, distinguishable from the Echo only by the chrome. This year it is a somewhat larger hatchback available for roughly $21,000. It even gets substantially better milage than before. Edmunds describes it as “a legitimate family sedan that offers everything you would expect.” There are no incentives, no rebates.

Toyota is selling almost 6 times as many of them as they expected. It remains to be seen whether this demand will hold up, but this is nevertheless impressive. Although this car may not meet everyone’s needs, people who bought them seem to be happy with them. This isn’t one of those cars that wows the automotive press but falls short in real life, by all accounts. Toyota has step one (above) well under control.

But what about the second step, being able to sell it at a profit? Toyota claims they have that under control too.

Does it seem odd that the Detroit newspapers didn’t have much coverage of this success story? I thought so too. Maybe being someplace where the majority of the people can get family discounts on Big 3 cars gives them myopia regarding foreign cars. Time for Detroit to take a road trip.