Last night I was privileged to attend an event sponsored by the Liberty Clubhouse that featured Mark Ragsdale, author of CAR WRECK, as the speaker. Mr. Ragsdale grew up in a car dealership family and owned a number of car dealerships at various times. Mr. Ragsdale has served as Director for the Massachusetts State Automobile Dealers Association, as Chairman of a National Dealer 20 group, and as a member of the Kia National Dealer Council. He spoke about how the government has invaded the free market in the auto industry and the impact that has had on the industry and the consumer.
Mr. Ragsdale spoke of the impact the credit market has on the auto industry–both on dealerships and consumers. He pointed out that the credit market has been manipulated by the government and that a manipulated market has no predictability, making it very difficult for dealerships to plan for the future.
Mr. Ragsdale also spoke about the government bailout of Chrysler and General Motors. He talked about the laws of bankruptcy being violated in the Chrysler bailout (see rightwinggranny.com article of May 8, 2009, for further information). He also explained how “Cash for Clunkers” had a detrimental effect on consumers–creating a bubble in the used car market because 800,000 cars that were road-worthy, insured, and fully paid off (the requirements for turning in a ‘clunker’) were destroyed. He reported that the average cost of a new car before government intervention in the auto industry (TARP) was $26,500. The average cost now is $29,500.
Mr. Ragsdale also illustrated the myth of the hybrid car. He pointed out that a hybrid car begins to make economic sense when gas is $7 a gallon, but not before. One thing he mentioned that I was not aware of is the fact that after 10 years or 100,000 miles, the batteries in hybrid vehicles have to be replaced. These batteries cost a minimum of $4,000. There is also, as yet, no environmentally friendly way to dispose of the used batteries. The Chevy Volt guarantees its battery for 8 years. The replacement batteries for the Volt cost $10,000.
Mr. Ragsdale also spoke about CAFE standards (Corporate Average Fuel Economy). These are the regulations that control the gas mileage of the cars the auto industry in America produces. He pointed out that for the first time in America under President Obama CAFE standards have been raised by executive order through the Environmental Protection Agency (EPA), rather than through Congressional action. This is not a move in the right direction–it gives more control to unelected government officials, which is never a good idea.
I strongly recommend CAR WRECK as good summer reading. A friend of mine who attended the event had been planning to go car shopping tonight. She told me after she left that she would not go car shopping until she had read the book. I think that is a really good idea.
For further information, Mark Ragsdale’s website is MarkRagsdale.com.