Automakers seem to be falling over themselves to announce that they are moving production back to the U.S. I suspect most of these decisions were already in the pipeline, but why not earn some Brownie points with the new administration by making a big deal of it now?
I hope these moves were all in the works already, because making sudden decisions to relocate production of a complex product such as an automobile would be foolish. Suppliers make investments based on longer-range projections. A sudden change in plans – or government policy, for that matter – can mean real economic hardship for those suppliers. Which could lead to job losses.
Abrupt changes in trade agreements such as NAFTA fall into the same category. A just-released report by the Center for Automotive Research warns that a complete withdrawal from NAFTA (admittedly unlikely) would cause automakers to have to build new capacity here in the U.S., increasing costs, among other negative effects. Those costs would be passed on to the consumer.
Dealership employment would be negatively impacted, the report says, by a cut in production, a slowdown or halt in vehicle imports, or a vehicle price increase, all possible knock-on effects for some of the policies being discussed.
I’m sure that future policy changes will be a topic of conversation on the floor at NADA. But, so will more everyday subjects such as, you guessed it, dealership buy sell. So, we continue to bring you useful information and insights into the buy sell world.
This week, The Scali Law Firm looks at buyer’s conditions to closing in a purchase agreement. Don’t be in such a rush to close that you don’t examine these conditions closely Your Domain Name. Not doing so could be costly.
I chatted with Willie Beck at Capital Automotive Real Estate Services Inc. – better known as CARS – this week. Whither goes CARS business goes the buy sell market. Or perhaps whither goes the buy sell market goes CARS business. It’s a real chicken and egg question. In any case, business is good for CARS, which provides capital to dealers. That capital is often used to acquire more dealerships.
And of course we have Transaction News.
NADA is almost upon us. Many of our contributors will spend some time at our booth — #6310 — during the show, and I encourage you to drop by to chat with them while they are there. It’s a great way to get free advice and knowledge! The current schedule of who will be at the booth is in this week’s issue. It is still growing.