Last night as I returned from Ann Arbor, I caught a couple minutes of Mad Money hosted by Jim Cramer on Sirius satellite radio. Some people love the guy and some people hate the guy, but if you're interested in finance, then you probably find him entertaining either way. At the end of certain episodes, Jim addresses or answers reader email, and yesterday someone from Michigan sent him an email ripping into Rick Wagoner, current CEO of General Motors. Jim disagreed with the email, saying that he considers Rick Wagoner, along with Alan Mullaly of Ford, to be pretty decent chief executives. Jim stood up for the CEOs, saying that the skyrocketing cost of oil and commodities (mostly steel), depreciating home values, and poor consumer sentiment were largely responsible for much of the trouble currently experienced in the automotive industry.
It was nice of Jim to stand up for the local guys, but this segment very much reminded me of the clip at the top of this post from an episode of possibly the funniest sitcom of all time, Arrested Development. If you don't understand anything at all about the stock market, you may not find the clip funny, but it seems to be an almost perfect analogy for the challenging state of the auto business.
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2 comments:
Wow, it seems to me that you could blame low consumer sentiment, depreciating housing value, etc. etc. on just about any struggling industry. Now, the skyrocketing cost of steel and especially oil seems more relevant to these chief executives. But, then again I hustle corn nuts to the appleseeds in Gresham, Oregon. (for any of you Pacino fans) Arrested Development doesn't come on my tv unfortunately. PBS is like my HBO. I have less than basic television - 5 channels. Adio.
I would agree in that those are certainly factors that would put a dent into any industry. Good point. However, if your $200,000 house just lost 10% of its value (20K), the odds are much better that you are going to put off the purchase of a new car as opposed to a new iPod, BigMac, or any other much smaller purchase.
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