Detroit Quake By Brian Albright, News Correspondent In December, President Bush announced he would provide General Motors and Chrysler with an emergency $13.4 billion in bridge loans to help keep the troubled automakers afloat into 2009. GM and Chrysler were given a Feb. 17 deadline to provide their restructuring plans while car sales continued to plunge. Sales were off more than 30 percent in December at GM and Ford, while Chrysler experienced a whopping 53 percent drop.
Slumping vehicle sales have only fed into the turmoil already affecting the overall economy, and the usually recession-proof collision repair industry also is feeling the affects. Auto industry insiders have been predicting nearly apocalyptic results if one or more of the Big Three wind up collapsing, but how have Detroit’s troubles affected body shops?
Although business is not exactly booming across the country, so far the industry has weathered the economic crisis fairly well. According to the Automotive Aftermarket Industry Association’s (AAIA) 2008 Collision Repair Trends report, total collision repair industry sales grew 5 percent from 2006 to 2007, and respondents to a recent ABRN survey said they expect revenues to rise in 2009. The recent plunge in new car sales is helping, as more people have decided to repair their older vehicles rather than trade up to newer models. READ MORE
Stimulus plans includes small business provisions
by Brian Albright, News Correspondent
The stimulus plan calls for the following initiatives that directly impact small businesses:
• A New American Jobs Tax Credit: This will provide a new temporary tax credit to companies that add jobs here in the United States. During 2009 and 2010, existing businesses will receive a $3,000 refundable tax credit for each additional full-time employee hired.
• Raise the small business investment expensing limit to $250,000 through the end of 2009: This provision will give small businesses an additional incentive to make investments and create jobs again by providing temporary business tax incentives through 2009. This provision will encourage all firms to pursue investment in the coming months, but will particularly benefit small firms that generally have smaller amounts of annual property purchases and choose to expense the cost of their acquired property.
• Zero capital gains rate for investment in small businesses: The proposed plan would eliminate all capital gains taxes on investments made in small and start-up businesses.
OEM Audio Gary Wano explains how Detroit's problems will impact repairers , listen here John Edelen, president and CEO of I-CAR, explains why training is more important than ever, listen here
GM says goodbye to the past. Or does it? By Tim Sramcik, Editor-in-Chief GM is taking some cost-cutting steps that should be getting a lot more attention from the collision repair industry and the rest of the automotive world. The automaker will begin auctioning off 200 vintage vehicle from its collection. These include such notables as a 1904 Oldsmobile Touring Runabout and vehicles used in feature films like “The American President.” Less auspicious offerings include the millionth, 2-millionth and 3-millionth Saturn (yes, car companies often save such landmarks).
GM says, along with the money the auction will bring, it will save $2,000 in annual maintenance costs per vehicle.
This is just one small step that must be part of a much bigger, smarter and inventive plan to save the company. Philosophically, this move represents what GM and other domestic automakers must do to survive – namely, say goodbye to the past.
