Posted on 02/08/2009 6:45:17 AM PST by Diana in Wisconsin
As auto sales nationwide continue to dwindle, a Wisconsin auto dealer has offered a solution to boost demand and revive the flailing U.S. auto industry: $5,000 government discounts.
John Bergstrom, CEO of Bergstrom Automotive based in Neenah, Wis., wrote a letter to President Barack Obama late last week suggesting that everyone who purchased a new vehicle in America, no matter where it was built, be given a government voucher for $5,000 during a 90-day period from Feb. 15 to May 15.
The manufacturer would match that with another $5,000 voucher, meaning buyers would get a $10,000 discount under Bergstrom's proposal.
"If the government, the manufacturers, the financial institutions, and the dealers all work together, we could give our economy a huge positive jolt," Bergstrom wrote. "Together we could get this industry rolling again in a hurry."
Bergstrom's plan also assumes dealers would agree to sell the vehicle at invoice pricing, and financial institutions would finance credit-worthy buyers with 72-month loan at a 5 percent interest rate.
The plan could eliminate the stranglehold inventories of new vehicles piled up across the country, and generate new vehicle orders that would bring people in manufacturing and parts plants back to work almost immediately, Bergstrom wrote.
While Bergstrom Automotive has also seen its sales volume decline last year, Bergstrom said his proposal was not self-serving.
"I'm very concerned about workers out of work," said Bergstrom in a recent interview. "It's very important to get them back to work. There's no reason to dwell on getting manufacturers' costs down."
According to Reg-Trak, a Waterloo automotive research firm that tracks state auto sales, new car and truck sales declined by 13 percent last year in south-central Wisconsin. Truck sales, including sport utility vehicles, declined 15.4 percent while car sales declined 10.2 percent.
In Dane County, car and truck sales in 2008 declined by 11.5 percent from 2007.
However, Wisconsin and Dane County fared better than the nation as a whole in 2008 -- total U.S. car and light truck sales were down 18 percent, the worst performance since 1992.
Bergstrom said the White House acknowledged receiving his letter, but as of Friday they had not provided any further response.
Bergstrom's proposal has generated some support among his peers in the auto retail industry. Allen Foster, general manager of Smart Motors in Madison, said he favored anything that would help stimulate the economy.
"The more we can give consumers, the better," Foster said. "We need to restore consumer confidence."
In a bid to boost auto sales, the Senate voted Tuesday to add an $11 billion provision to the economic stimulus package that will allow most Americans to claim a tax deduction for the sales tax and any loan interest on the purchase of a new car from Nov. 12, 2008, to the end of 2009.
Mr. Bergstrom's proposal takes this to the next level, Foster said.
Smart Motors actually bucked the national trend of declining sales, as 2008 was a record year for the company. Still, Foster felt more should be done to stimulate the economy.
"I'm in favor of anything that helps people get their confidence back," Foster said. "It will be better for all of us in the long run."
“Why didn’t anyone think of this sooner?”
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I recognize that sarcasm is dripping all over the keyboard as you type but it would no doubt be astounding to know just how many in this country think that is a serious question. I have known people who thought it was just that simple.
Depending on where you 2 live, you can come and pet my horses-—
Put a runner on the front, and Cables on the back and I bet you would be good to go (albeit a little cold).
Ha, Free? That just means the dealers can add 5k to the sticker. Makes me want to vomit that I own 3 cars I bought from Bergtrom in Neenah......””
Build me a car like my 1965 Pontiac station wagon:
Steel Easy to work on myself Mileage about 18 mpg for a car that weighed 4500# curb weight I can take my dogs with me everywhere I put 444,000+++ miles on that vehicle and sold it to a guy in Sweden who restored it, and it was running when he bought it.
Best part??? It cost me $3434 out the door at Robinson Pontiac in Torrance Calif, tax license and all.
Build me a car that is as reliable as that one, and I will consider buying something new.
Get the government out of the car building business. Government doesn’t know jacksh__ about running anything at a profit.
I don’t want a computer telling my engine how to work, which then costs me $100 per hour for some jerk with acne who cannot spell “trying” to diagnose what might be wrong.
I didn’t need air bags surrounding me then, and I don’t now.
I didn’t need a car made out of plastic then and I don’t now.
I ran the car on regular gas and didn’t pay ridiculous prices because this country won’t drill for our own supplies.
I didn’t pay an arm and a leg for insurance, of which over 1/3 was for “uninsured motorist” because there are over 40 million illegals in the country, most of whom don’t know how to drive, and don’t carry continuous insurance.
What do I remember most about my trip to go get my car ( which was built without power stuff for me-not off the lot)???
NO GRAFFITTI all over the buildings between San Fernando Valley and Torrance!!!!!!
I will make anyone a bet:
Let the car companies build exactly the cars they sold in 1955-1965 and the government stays out of the car making business...
I will bet that the car companies couldn’t make all the cars they could sell if they could rebuild them exactly the same as then.
His proposal only reaffirms my contention that cars are too high priced, and the unions get too much money.
You and I are not the getters of free ponies but the buyer of said ponies for others.”
I already own my “ponies”. Come pet a couple..there are 6.
As much as I loved my 62 TBird convertable, I like the idea of never having to change spark plugs, points, adjusting the dwell setting, replacing the exhaust system, cold weather starting problems, replacing brakes shoes, and hundreds of other improvments over the decades.
[I always tell my daughter if her children ask me for a pony, I'm gonna tell them I did, but your mommy got rid of it]
I want an air conditioned barn to keep the pony in. Make that two ponies so the first won’t be lonely.
Works the same way with women too.
Every time Obama speaks, he gives a clear impression that a pony must be nearby.
Wait, it's not a pony, it's a bull.
The hell with this, I’m holding out for the free rice cooker!
Worried that their son was too optimistic, the parents of a little boy took him to a psychiatrist.
Trying to dampen the boy’s spirits, the psychiatrist showed him into a room piled high with nothing but horse manure. Yet instead of displaying distaste, the little boy clambered to the top of the pile, dropped to all fours, and began digging.
‘What do you think you’re doing?’ the psychiatrist asked.
‘With all this manure,’ the little boy replied, beaming, ‘there must be a pony in here somewhere.’
I, for one, am sick of digging through the manure on Capitol Hill, looking for my pony! ;)
You made me smile....go to the head of the class!
You are so right. There are plenty of folks that believe that the government can just “give” us all the money we need.
Who do you think votes Democrat?
Who do you think just voted the Magic Messiah into office?
You’ve got a point. If we’re going to give away billions to keep the American car companies in business, better to subsidize buyers of those cars than hand the money over to the unions and the execs. Of course, it would be better NOT to give away billions to keep the car companies in business, but if we’re going to do that anyway...
yikes...how does this put people back to work ? it only clears out inventory.
“Who do you think just voted the Magic Messiah into office?”
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I am sure a lot of them just had no idea what they were voting for, a lot thought that we should have government provided healthcare, a lot thought that we need unlimited abortion, some wanted the war to end but there are some who literally believe that if the government were just more generous then NOBODY would need to work at all. These are the ones who need to be under guard for their own safety. I don’t understand how someone that stupid can tie his own shoes...oh, yeah, I forgot, that’s why they make those little velcro flaps.
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