Posted by
Tim Blessing on Wednesday, July 02, 2008 7:48:33 PM
ECONOMICS.
The economy has a lot of structural imbalances that need to be corrected.
Higher energy costs.
Housing crunch.
Higher Exports.
Food costs more.
It sounds like people have run out of money.
They may decide that staying home at the lake on the weekends is cheaper than going to the beach for the week.
They may decide to cut back on the frills of a glamorous night out by going to the movies instead.
Simply, people are cutting corners to save money.
Exports are up.
Producing more goods by companies and exporting them instead of selling goods in the United States.
In essence, the economy is shifting away from consumption towards production for export.
The automakers are the problem on this point.
If I was the CEO of one of those companies I would shut down production of all nonselling cars and increase production of all those fuel efficient cars that are selling.
Transfer all younger workers who are lower cost to these employers from plants that are shutting down to these small car factories.
Lay off everyone else with a year's pay and 5 years of medical.
That means ending production of SUVs and Trucks and MiniVans.
As long as gas prices continue to go up and automakers continue to make SUVs and the like they will continue bleeding financially.
In the final analysis, strip away everything in a company that is nonessential and get back to the basics of service and manufacturing.
Also, a recession may or may not happen, but the companieswho wait to make changes could be in for a rude awakening the longer they wait.