Tuesday, January 22, 2008

Want to make a change?

As I watch the market upheaval today I wonder why all this is happening. Lately there's been a lot of discussion in the world about increasing prices and the devaluing of money. What there isn't one simple solution to any of the worlds woes, one huge contributor is our own inability to accept change. Here's an example of what I'm talking about: How many of you remember your first car? I remember mine, it was a 1977 Chevrolet Chevette. The Chevette was one of Detroit's answers to our desires for cheaper transportation. It was overpriced, underpowered, and unrealistically small. In the 70s Detroit was still the king at making large comfortable cars so when they tried to downsize their efforts were lacking. The Chevette, Vega, Pinto, and Omni all pretty much sucked. You'd be hard pressed to find any of them on the road today but if you look around you'll still see LTDs, Caddies, muscle cars, and pick-ups built in that era still being driven. Why is that? Could it be that people actually like the look, the comfort, or the power these vehicles offered? I think so. Yes these are gas guzzlers but in reality their mileage isn't that much worse than a lot of the new cars coming out now. At it's prime my Chevette would get almost 20 mile per gallon, with a 12 gallon tank I could fill it up on about $10 bucks. Now I have a Honda Civic that gets about 20-25 MPG around the city and it costs me $25 to fill it up. But neither of these cars are comfortable doing a 3-4 hour drive. So what have I gained? Not much. Now my Honda isn't the only car I have in fact it's actually my daughters car now. I have a very nice pick-up, it's very comfortable, but it cost's me a lot to operate it. My wife have been looking at buying a replacement for her mini-van, we really don't need a car that big now but we do enjoy it's creature comforts. When I go out to buy this new vehicle will gas mileage be my #1 concern? No not really, I'll be looking for a comfortable car that I can drive around the country safely and comfortably. Good gas mileage will be a bonus but won't play much into my decision making. I thin that for the majority of the population that will probably ring true. So how does all this play into the markets? Well my theory is this; people don't purchase based on global concerns, people buy things based on their own needs. When I buy my next car I'm not going to fall prey to this malarkey about how I can save the planet if I buy a piece of crap car. I know that in the cooperate world it's all about how to make a profit. Right now corporations aren't seeing the benefit to their profits to create things that will help the global economy or environment. Detroit is still creating gas guzzlers because gas is the easiest way for them to make a profit. It's easy because it's a proven technology. They don't really have to do anything to convince me that there's a better option. If all the auto makers in the world suddenly said they would no longer build gas powered engines what do you think the out come would be? Well other than a collapse of the oil business that I think would be short-lived, they would have to sell something else right? Gee I wonder what that would be, we have car makers that have a demand but they don't make cars? Come on folks, we have existing technology they could use to make large comfortable cars we would be willing to buy. I saw a show the other day called "Future Cars". A manufacturer in Japan had created a car that looked like a mini RV. It had six wheels, all independently driven, and a huge interior that could seat 6. they said it would easily do 200 mph, but who want to go that fast. If this car was built in the 70s it would have had to have a huge engine in it but this car was electric. Now I'm not sure of the range but I do like the way this was going. A large powerful comfortable vehicle that all I have to do is plug it in to recharge it. Wow what a concept. And on top of it all, a 4 (ok 6) wheel drive. Put a bed and a lift kit on it and you've got a monster truck! Ok, probably not but it's got potential. So why isn't this car being driven? Oil, that's why. As I mentioned earlier, if we quit making gas driven vehicles the oil market would initially be hurt. I said I felt this would be short lived because the initial shock would cause a lot of gasoline centered oil companies would be hurt and even fail but there are a lot of other products that can be created with oil. At our current consumption our oil reserves aren't going to last much longer, maybe 100 years (I'm speculating of course). If the demand for oil was reduced by a drastic change in the gasoline market many of the small companies would fail but auto's aren't the only consumer of oil so a market would still be there. Also, it would take time for all of us to get these new cars so it would be a tapering effect at the worst. In the long run we would in reality be extending our reserves enough that technologies that couldn't be converted could be extended even farther into our future. Since less oil would need to be converted to gasoline, more would be available for conversion into jet fuel, diesel, and other fuels thus resulting into eventual lower costs for these products. If the cost of commercial transportation is decreased a ripple effect of lower prices for everything would result. So next time you decide to "go-green" and "reduce your carbon footprint" (whatever the hell that crap means). Think about if your actually making a real affect. One vehicle isn't going to make change, but a massive change to the vehicle market will. And I'm not talking about environmental change, that's a liberal sympathy ploy, no I'm talking about real change, more money in your pocketbook. And strengthening our pocketbooks strengthens our global economy.

1 Reader Comments:

Chuck said...

I'm glad to see I'm not the only one that thinks this way. Good blog Jim, and hope to see you up on your feet again soon.

Chuck