Do Rental Sales Hurt Consumer Sales?

I ran across an article today that i thought i'd share. I dont the article itself has much new or interesting information, however it did touch on one point, albeit briefly, about fleet sales to rental companies. The author points out that GM often dumps large quantities of unsold cars onto rental fleets where styles isn't important. This is true, clearly, but the author should have gone deeper. Could these rental fleet sales actually be urting consumer sales?

Consider the situation when you rent a car, you want cheap, temporary transportation. Due to the huge volumes of GM and Ford cars sold to fleets, you will mots likely get a GM or Ford. So what then is your impression of the car? Sure you might be pleasantly surprised with the power, handling etc, but you went in there looking for cheap transportation and thats what you got. If you then go to a dealership and see the same car, will it have the stigma of cheap transportation? Also consider the sheer volume of the rental cars out there. If 99% of the time you see a rental car it's a Ford or GM would anyone really want to buy one? People will think youre driving a cheap car thats only good enough for a rental fleet.

When i was stateside last week i had a new Impala. It was not a bad car, it rode a bit to soft for my tastes, but it had decent power, the seats were comfortable, electronics were laid out well. But would i recomend it to someone? Would i buy it myself? Doubtful. No matter how much leather was thrown at it, how many gadgets installed or how much flashy paint or wheels were on it, it would still be a dressed up rental car to me.

It's an interesting thought, because what is "helping" GM and Ford in the short run could actually be giving their product a bad rap and hurting sales long term. Due to the gross overcapacity at GM and Ford and the dire need to maintain cashflow, they literally dump new cars on rental fleets. Sure this helps with cashflow short term and keeps the plants running, but in the end GM and Ford basically build cars for rental fleets. Why would anyone spend their hard earned dollars for a car that for the general population, is nothing more than cheap temporary transportation?

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_levin&sid=aFXVDT_noz08

I Propose a Sanction on Sanctions!

Iran’s continuing defiance of the worlds calls for an end to their nuclear ambitions have forced the US and the world into quite a quagmire. How far are we willing to go? Do we back off? Do we forcibly remove another leader? Not yet. Nope, according to the playbook on international relations, it’s time for economic sanctions.

But do economic sanctions really work? Do they force leaders to give up their disagreeable ways and put their citizens first? Quite simply, no. As with many steps a government takes, the results turn out to be quite contrary to the intended results. Let’s take Iraq as an example.

After the first war for Baghdad, the US retreated back to Saudi Arabia and decided that the best way to force Saddam to his knee’s and end his weapons programs was through economic sanctions. The world agreed and sanctions were put in place to stop a wide variety of goods from flowing to Iraq. Huge lists were made that included everything from toner to pesticides to Xray machines for hospitals. The thinking is that so many products have a “dual purpose” that to be safe, we must stop the flow of any and all goods that could be even remotely misused.

An interesting sidebar is of course the “Oil for Food” program which was so poorly run by the UN. But the corruption and underhandedness of that program warrants it’s own blog, hell it’s own books.

But back to the sanctions….so the goods stopped flowing. The world rejoiced because now Saddam would not have the tools to continue his weapons programs. In fact, we hoped that through the suffering of him and his people he would have no choice but to walk away from his homeland. That of course did not happen. What did happen? Well, Saddam went on building palaces. Based on the pictures I’ve seen of him during that time, it doesn’t appear that he went hungry either. So Saddam was still fat and happy running his little empire while the people of Iraq suffered without food, water, hospital equipment, repair parts for sewage plants, power stations etc etc etc.

So the people suffered, but as long as we stopped the weapons programs than it was worth it, right? This is where truth and the logic of sanctions starts to get a bit hazy. If we had faith in the sanctions, if we thought the sanctions had worked than our intelligence about the weapons programs was completely wrong 3 years ago. If we thought the sanctions were working than our intelligence community was intentionally misleading us. Before the war Saddam continued to maintain that he had no weapons programs, was he actually telling the truth? The inspectors did not find any weapons although to be fair Saddam wasn’t being very open with them.

Cuba is another good example. Have our sanctions crushed Castro? No. The people may still drive ’55 Chevy’s, but there has been no revolution, not since Castro’s own revolution anyway. Sanctions make leaders into living martyrs. The big bad world is blackballing your country but your fearless leader is standing up to them.

History repeats itself but we never seem to learn from it. So today we have Iran. Iran is unique when compared to the Iraq of Cuban situation in a number of different ways. Unlike Saddam, Iran not only has a 100% confirmed weapons program, they aren’t even discussing to end it or allow international scrutiny. I fear it’s becoming an issue of national pride within Iran. “If we’ve got some nukes, the world will have to listen to us”. The Iranian leader will become a living martyr, the face of Iran but the outcast of the world. The rhetoric for sanctions is cranking up.

From MSNBC. Rep. Tom Lantos, D-Calif., the committee’s ranking Democrat, said persuasion won’t work with Iran. “We can only hope to inflict such severe economic pain on Tehran that it would starve the leadership of the resources they need to fund a costly nuclear program,”

All they’re going to wind up doing is starving the citizens of Iran. Is this what we’ve become. Who are we really after here?

So we impose sanctions, then what. In 5-10 short years the economic affects will have become so dire that Iran can’t survive. But so what, based on where they are now they’ll probably have a bomb in 1-2 yrs. Then we’ll be back to square one. What if sanctions are just a prelude. Just a line item that you must check off at the UN before getting the OK to invade? “We tried everything else, we had no choice”.

I think at this point we have to face facts, Iran will have a nuclear weapon. They are apparently bound and very determined to reach this milestone. China has them, India has them, the US has them, North Korea has them and soon Iran will. It's not a good situation, but we'd better deal with reality and not pipe dreams.

Not enough sex

So apparently Europeans don't have enough sex. Or maybe it's that they have too much safe sex...this isn't clear. What is clear is that European countries, Germany, France, Italy and Austria in particular are in all out freek out mode due to the shrinking size of their population.

I've seen a number of studies published lately about how the shrinking population and shifting demographics are dooming european nations to a future similar to today's third world countries. A number of countries have gone so far as to offer free child care, tax breaks or flat out cash handouts to couples that have children...particularly more than 1 child. A few years ago i remember reading about how the population was growing at unsustainable rates, the world was over crowded!, WE'RE ALL GONNA STARVE! What happened?

We could talk about the factors till our faces are blue..but my question is, why is a shrinking population bad? What makes a government or anyone else think that they can accurately determine how big a population should be? How would you even attempt to determine this number? Is this not really the ultimate form of social planning? Stalin dreamed of central planning for the economy, but central planning for the entire population...wow. I can hear the roar of running to their offices and madly typine away now. The chinese continue to try to control their population size but i don't see the chinese population shrinking any time soon. If you are "one in a million" in China, rest assured that there are 1000 people just like you throughout the country.

I've got a few good ideas on how the US can solve our problems and Europes at the same time. If Europe really wants more people maybe we can ship them some of our seniors. Social Security is apparently doomed to fail leaving the younger genearation supporting an unsustainable bill. So i say ship 'em to Europe! Two birds, one stone. Want another idea? Feed the homeless to the hungry.

Brilliant!

And now for something completely different....

The US has an image problem. All over the world, we are viewed as evil imperialists, evil capitalists, evil Americans..the list goes on. When a corporation has this problem, there are a number of solutions. It's possible to ditch the old brand, and come up with a new one. Think KFC. The public is turning away from fried food? Ok, we're no longer Kentucky Fried chicken, we're KFC. Same product, different name. Problem solved.

Alternatively, you could align your tarnished brand with one that enjoys a better image. This is the route i suggest for the US. That's right, the United states of America should look towards our neighbors and identify other countries that we could align ourselves with.

So where to look....where to look.

I know, how about our friendly pacifist neighbours to the north, eh? That's right, Canada! Lovely Canada, what with their public healthcare, mounties, hockey and labatts Canada enjoys a very positive image throughout the world. We've already got Alaska, is it really that much of a stretch to just claim the land in between? This would obviously cause a bit of a stir within Canada, so as a consolation we would offer Quebec to France. I know, I'm a giver.

So we now have Canada and the US. Not a bad start, we can claim a more socialist tilt which will please Western Europe...but we'll still be seen as a rich imperialist nation. Hmmm..still some work to do. So what next....yes, what next indeed.

Mexico homey!

Despite Bubba Clintons fears, the giant sucking sound of jobs leaving the US from Nafta never really occurred. Certainly not to the scale it was supposed to have. Looking today at the auto industry, without Nafta the current troubles probably would have happened a decade ago. Mexicans are coming into the US in droves, faster than we can kick them out. On the flipside, US companies are building plants in Mexico as fast as the buildings are staffed up. It really is win win, our companies can compete on a global level and our neighbours to the south enjoy a better life. Lets just bite the bullet, tear down the fence and annex them. We know they won't fight much, do they even have an army? And who doesn't like a chimichunga every now and again. Hell, the tax revenue alone from all the US spring breakers in Cancun ought to cover any losses for at least a few decades.

So where does that leave us? Well, the US will become a more charitable, sociable nation (at least we'll look that way). How can Germany or Iran hate us then. Nobody hates Canadians! But we will need to do something about that name....how about the United Peoples of Mexamerida.

Democracy in Action, or Democracy Inaction?

Democracy is the peoples government. Democracy is accountability. Democracy is majority rules. Democracy is fair. Democracy is...good.

Well, maybe not. After years of international pressure, an Arab country has finally held democratic elections. No foreign military needed here to “foster democracy”. No, after the death of Yassir Arafat the Palestinian authority voluntarily held democratic elections and started down the road to global acceptance.

Until recently that is.

The second round of elections held earlier this year saw the rise to power of a globally recognized “terrorist” organization, namely Hamas. What's interesting about these election results is that they were just that, election results. Hamas didn't overthrow a government, assassinate a leader or militarily take control. No, the Palestinian people voluntarily elected Hamas to power and to represent them in the global arena knowing full well all of the possible problems it could cause.

I for one congratulate the Palestinians. They have done exactly what is being demanded of so many other Arab nations. With this election, the people really have let their will be known and this presents a real problem for the world, in particular the US.

Consider what is being demanded of Hamas. They are to renounce all violence and accept the Israeli state. But to do so would recognize and legitimize Israel's illegal taking of Palestinian land. It would legitimize Israel's continual flaunting of UN resolutions, most importantly 242. It would legitimize the last imperialistic expansion in recent history. I don't see the Palestinians accepting this solution, the election results are the best indication of this. The Palestinians will demand a return of all land before the (UN recognized) illegal expansion of Israel in 1967 and, upon that action, offer recognition of Israel.

This election presents an interesting problem for the US. The US has been one of the biggest, if not the biggest force promoting democracy in the middle east, sometimes by force. Afghanistan and Iraq immediately come to mind. By the US's reaction to the Palestinian elections it is apparent that democracy is only acceptable on our terms, when leaders who will work with the US are elected. In response to the elections the US Israel and the EU have threatened monetary retaliation against Hamas led Palestine. Think about the message this sends to the struggling Iraqi or Afghani government, ”We will support you as long as you conform to our wishes, particularly when it comes to Israel”. The “Israel-Palestinian conflict” as it's often called, hell lets just call a spade a spade, the Israeli occupation of Palestinian land is like a knife in the side of every Arab. They can't fathom why the world, specifically the US, has sided with a country that is so blatantly acting illegally. I have to again refer to the numerous UN resolutions demanding return of stolen land to Palestine.

Now of course neither side is innocent in this conflict. From Palestinian suicide bombers to Israeli missile attacks on civilians, both sides have blood on their hands. Lots of blood. However as the sole superpower the US has a responsibility to force both sides to recognize past crimes and come up with a solution. No more Camp David accords, no more Oslo Agreements, no more one sided “agreements”. If the US is interested in middle east peace, we have to force Israel to return stolen land. Plain and simple.

Historically, any criticism of Israel has resulted in accusations of anti-Semitism. What a great response that is, it's like calling someone a racist, or a rapist. The truth is irrelevant, the accusation is all that matters. So if anyone out there is thinking of responding with such words...save it. It will only show your immaturity and closed mindedness.

The World without Borders

The book store that is. I've only found one decent English book store here. Unfortunately it's about an hour away in Zurich. Luckily my eyes tend to be a little more optimistic than my schedule permits so i don't have to make the journey too often. Case in point, on the way back from Geneva today i finished reading a 1200+ page “encyclopaedia” on the middle east. Although i bought the book at the end of last year, it took me about 3 months to read. To be fair, this isn't the kind of book you “just can't put down”. It was very good, don't get me wrong. At times i was mad at the author, at other times i laughed, at other times i had to put it down in sheer disgust. I just had to take this book in small doses...it took time to digest all the information.

Curious what it was?

It's called “The Great War for Civilisation”. I may have mentioned it before, but it truly is a good book. Anyone who is remotely interested in the middle east should read this book. It's written by Robert Fisk who has spent his entire career reporting on the middle east, most of it while in the midst of the various “conflicts” he discusses. The books is worth reading if for no other reason than Frisk has interviewed Osama Bin Laden face to face multiple times. It's impossible for authors to remove personal opinion from their work, but that doesn't take away from the book at all.

I've only read a handful of books that have stuck with me over the years. I can already tell that this book will be the newest addition to that short list.