Let’s Fix the Auto Industry
Ford Canada’s president, David Mondragon, has the right idea, sort of. He’s been lobbying Ottawa hard to get help for the auto industry. But rather than throwing money directly at the manufacturers, he’s suggesting they throw some at owners of older vehicles. And why not? It seems to be working, for now, in Germany. There, you can scrap your old car and get 2500 Euros. That’s about $4000CAD and change, substantially more than Canada’s paltry $300 to scrap an older car. In BC, the pot is a little sweeter, where the provincial government offers $2250 to scrap ’95 and older models. Mondragon is suggesting at least $3500 for ’98 and older models. And he’s right, it will take that kind of coin to make me even think about parting with my perfectly functional ’98 Ford Windstar.
I don’t want to rain on the parade, but if I could point out just a couple of little problems I’m having with the idea. First, is it really a good time to be encouraging us average consumer types to take on more debt? I don’t have the other $20K+ that I would need for a new vehicle, so I’d have to borrow the rest. Hyundai and others are now offering insurance to cover your payments for a while if you lose your job, which is a great idea and will be somewhat successful at getting people into showrooms. But when gas prices head up again this summer, will the Detroit 3 still have showrooms full of SUVs? Second, well Ford don’t make a minivan anymore and I like minivans, and as the industry hasn’t introduced a hybrid or clean diesel or PZEV minivan to North America, well, what would I buy anyway?
However, if you’ve got the cash (and you like minivans), there are some screaming deals to be had. Pontiac and Dodge minivans are kicking in $7000-plus, landing a new minivan for $18,000. That’s a deal, for sure. Oh, except, GM (Pontiac) and Chrysler (Dodge) may not be around much longer, certainly not in their present form, and what of all the companies who make parts for them? Oh well, seems like another reason to sit this dance out.