Apres GM, Le Deluge.

OK, so the Sun King never uttered those exact words. But the sentiment is similar. In a society dominated by the automobile and the industry that made it what it is today, a world without GM may indeed be as different as France without Louis in the 18th century.

We should begin to think of a post-GM-and-Chrysler-as-we-know-them world. Things look pretty dire for them as they near the auto bailout hearings in Congress. This scribbler believes in two possible outcomes:

(1) The Obama administration originally talked of a $1 trillion package to stimulate the economy. This figure has conveniently been whittled away to $750 billion. Chrysler, GM and possibly Ford could be saved by say, a $250 billion package. You do the math. Maybe Mr. Obama's administration is going to walk the talk and save the jobs (read UAW) that helped elect him.
Or
(2) Maybe not. The possibility of ending decades of mismanagement, and products built for consumers with no eyes, one leg and an income of $55,000 in outer Mongolia, instead of the US middle class, might be too tempting for the free market thinkers in Congress. These politicians are not limited to the Republican party, either. There could be a groundswell of support for the idea of restructuring the auto industry by allowing at least two automakers slide into bankruptcy.

And what of Ford? The automotive press has been full of praise for Ford's future plans. The 2010 Taurus (not yet in dealerships) is getting rave reviews. The European Focus, due here sometime in late 2010, is getting rave reviews in Europe,and, if oil prices spike in a couple of years, could be a big hit here (and even if they don't, young buyers will flock to the product). And then there are a slew of hybrids coming out of Ford, starting now with the launch of the new 2010 Fusion Hybrid, rumored to be able to get 40 MPG in the city. If I were a betting man, I would buy Ford shares now. I might even fund them by bailing out of my GM and Chrysler shares.

Car Sales(people) in America

As any friend will tell you, if you are a gear head like me, you love to visit car showrooms, forever searching for that perfect deal. I respect sales people. It's how they make their living. I usually begin with "I am just looking, so I don't want to waste your time". If the vehicle genuinely interests me, I might ask some questions. If I am intrigued I may even start a discussion on price. As the owner of 30 cars since I was 18 (I am 47 now) my wife will tell you that too often, I end up trading in my current vehicle at a terrible cost (both financially and in terms of household peace).

Now, in exchange for my honesty and respect, I would dearly love to see the same returned in kind. Sadly, this is rarely the case. The problem usually arises at the "how much?" stage. The first question is usually whether you have a trade-in. This is a common negotiation tactic. Find out how much you can screw the customer out of in the trade-in, and then offer a "huge" discount on the vehicle itself. If you protest, they will tell you some guff about "local market conditions". Don't believe it. Stick to your guns, and demand the Kelley Blue Book trade in value. Beware of the knock-off "Black Book" value which usually shows values below the KBB listing. If the dealer refuses to honor the KBB value, head for the door. Now, heading for the door will usually produce a rush of "let me talk to my manager one more time" or "You won't find anyone who will use that value", etc. If it does not keep walking.

Once that little charade is over, you need to know the invoice amount of the vehicle. You can get this from the dealer, or if they prove unwilling , look into the service offered by Consumer Reports magazine. If the dealership is worth their salt, however, they will share the invoice price with you.Start negotiating at that price. Invoice Price already includes some "hidden" incentives from the manufacturer. Once, with a Lincoln dealership here in Cincinnati, I ended up buying the most expensive vehicle on the lot at a mutually agreeable price, mostly because, apart from liking the car itself, the Salesman was completely transparent about the pricing.

All this to give the dealership some money. I like Saturn's idea of no-haggle pricing (all though some report that this is eroding). It is a bold move, and one that American manufacturers are ignoring to their peril. American cars are fast becoming a commodity,and once this happens it is extremely hard to reverse the trend. Toyota and the German brands are notorious for being relatively inflexible on their pricing. It shows on their bottom line.

So, getting back to sales at dealerships. Please, end the games. Give us an honest price and give us an honest buck for our trade-ins. Stop the games. Open you books. Show us that we are both doing a good deal. It costs you more to have a salesperson lose an hour haggling to get to a price (and no sale afterwards) than to have me out the door with a new vehicle in half the time. Which is half the problem of the industry as a whole.