What is the CARS program going to do for me?, How about for Michigan?, What about the country. These are the questions flowing through my mind every time that I hear the subject brought up. This has become quite frequent, as you cannot turn on the TV, or open a newspaper, and not hear about it. The media and the government has claimed that this program is a great success. But I am worried about the long term effects.
I live in Michigan, and earn my living as a self-employed electrical engineer catering mostly to the automotive industry. As you could imagine, business right now is not so good. I have had plenty of time to get out and network, just looking to meet some new people in other industries. The hot topic right now is CARS, or cash for clunkers. I was intrigued with the difference of opinions as I speak with these people. I am torn with this topic. Having some insight into the workings of the auto industry, I can see the problems with this plan. However, my wallet desperately needs this plan to work, and I find myself trying to talk myself into it. One of the things that make this so difficult for me is that I can see the dollar signs, the CARS program is producing car sales in areas the industry is not accustom to. In order to meet the demand of these smaller cars, additional tooling will be required. This coupled with higher mileage requirements will create a massive re-tooling effort. This re-tooling will have an enormous effect on the Michigan economy. When the big three needs to they can move quickly. I have seen changes made to a model line fast-tracked and implemented with almost alarming speed. I am starting to see the activity here with respects to battery and hybrid components, and an increase in variable valving technology. The movement has begun, GM, and Chrysler now with fresh new credit will begin to re-tool for the “new” era of automobile manufacturing. I believe that this re-tooling will cause a boom-like surge in Michigan, giving the impression of a huge success for this program. Nothing better for Michigan than cars rolling off the dealers lot. It seems perfect…or is it? I remember being overjoyed when GM announced zero percent financing for the first time. It also seemed effective, cars rolled off the lot, and other manufacturers followed suit. What followed was a sales slump, and a used car market flush with nice choices. It took two years and a second wave of finance incentives to bring the new car sales numbers back. This time around, the mission is two-fold, stimulating sales is only one aspect, changing the type of cars that we drive is the other focus. My fear is that once the government incentives are gone, dealers will be left with lots full of cars that might not appeal to buyers without heavy discounting, or manufacturers incentives. We will be right back to where we were late last year. The slump following this program will be severe, and will require further gimmicks to bring people back to the dealers lot. I am now faced with the new thought. Can I get my ducks in a row, and be able to retire or re-position myself before the boom is over? I am excited about the level of work that will be coming this way, but know it will be short lived.

I also think you hit the nail on the head, if you are content with your car, it still runs and gets you from A to B, save the money for something a little more important than an upgrade to an already functioning part of your life.

Thanks for stopping by J