So how is the economic recovery doing in California? Not so good…
I sometimes drive down “Auto Row” here to look at the new car deals. It is right at a freeway off ramp so it’s easy to reach in just a minutes of driving. They had built this area about 30 years ago as a brand new shopping destination for car dealers. All new dealers, all big buildings, all Top Drawer. And for a couple of decades it did very well. Realize that it is STILL the biggest nicest “Auto Row” near San Jose. It’s not the area that has declined, it’s the auto market. As recently as 5 years ago this was still ‘fully booked’. Some dealers, like the now missing Dodge Dealer, had been here from the ground floor. Literally, they built the dealership and moved into the new building.
So looking at the place now, it just shouts “jobless recovery, if any recovery at all” to me. Why? Because there is no business at all in these buildings to do the hiring. So no sales. So no one who needs to build the cars, or tune them up, or wash them, or be the gardeners and janitors, or…
One interesting example is the Toyota Dealer. They now have 2 adjacent dealership properties they have picked up (undoubtedly at distressed prices and for strategic reasons). They are being used as used car lots. So they are slowly building a monopoly on one intersection having 2 or 3 of the corners already. But that is being funded from sales outside the area, not from here. Honda and Mitsubishi have added large ‘USED’ lots as well to lock down real estate.
So what does the place look like overall?
Here is a broad perspective. You can click on this and make it quite large, but realize that pretty much everything is an auto dealership. At the very far end, near the freeway, is a gas station or two and a fast food place (hey, they need to gas the cars and get lunch) but not much else. This shot is from about 1/4 of the way from the far end looking toward the freeway off ramp in the distance.
Each flag tends to be a dealership, though some places may have more than one.
The Saturn Dealership
The Dodge Dealership
Notice the browning turf? You don’t give up on the landscaping when trying to lease a building unless it’s been a while and it’s pretty desperate.
The Jeep Dealer
I’m pretty sure this was a dedicated Jeep dealership, but it might have been some other brand in the last couple of years. I’d not been here recently enough to be sure.
Not just a MOPAR thing
And this is not just a MOPAR / Chrysler thing either. I don’t remember what the two dealerships were that are now Toyota “USED” lots, but they were not always Toyota. And at the far end on the left there was a very large Volvo lot. Some years back it got turned into a FORD lot (when Ford absorbed Volvo), now it is a Honda USED car lot. Ford is now just the small older place they started in 30 some years ago. The one with the “Everything Must Go” dismal eagle out front.
But even if downsized, FORD did survive:
Gone are many of the various GM types. I’ve lost track of their comings and goings. But I’m pretty sure one was a Buick dealership (as I’d done a test drive there about a decade ago) and I’m not finding the Cadillac dealer either. Oldsmobile is, of course, gone too. And I vaguely remember a GMC Truck dealer, but that could be from some other auto row. What does Government Motors have to work with now? One Chevy dealer who’s hedging his bets with some Korean imports.
And looking from the front we see a lot of Kia marketing / signs, Chevy not so much…
So exactly HOW will a ‘recovering GM’ sell those cars?
Germans any better?
There is no BMW nor a Mercedes dealer here (though I think they were not here to begin with, having established dealerships in high end cities up the peninsula, which is where I go most of the time. But the VW dealer is interesting. Over time, he has branched out a bit trying to survive:
So think about it for a minute. All those used lots do not require anyone to have a manufacturing job. All the empty lots too. And the ones that are in business? Not selling much. So where will all these ‘good manufacturing jobs’ that are supposed to magically happen sell their wares? Who is playing for position to own this turf?
Clearly the major Japanese makers. They will likely source a lot of parts from China (perhaps whole vehicles eventually). Auto Row might as well be designated Asian Row. That is where the manufacturing will be done. And with those sales will also go the financing and maintenance (replacement parts, rebuilding) income as well.
So I’d like our Governator and Mr. Obama to take just a couple of minutes to think about what they would do if they had to put their own personal money into starting a car maker or dealership. Would they do it here, with our present taxes, laws, and regulations? Or would they put that money into Japanese dealers and Chinese manufacturing?
And will paving the streets again with “shovel ready projects” put more Government Motors cars on them? From what dealership? Sold to whom? Bought with what paycheck?
And gone with those sales are all the sales taxes, estate taxes, registration fees, etc. All that lovely lucre on which your government social manipulation depends. It’s your bird, and you have cooked it. No more golden eggs for you.