Archive for December, 2008

If the big three automakers fail, a chain reaction will tear through the economy. More than $150 billion in tax revenue will be lost over a period of three years, and over 3 million jobs wiped out, according to a study by the Center for Automotive Research in Ann Arbor on the economic impact of an auto industry bailout. From school districts relying on federal funding to small businesses located near auto plants, parts manufacturers and dealers — the collapse of the auto industry will affect everyone.

Parts suppliers are already cutting back, since there are more available cars than there are willing buyers right now. Dealerships are offering discounts and incentives to try to get vehicles out the door — only to wind up with little to no profits on the sales.

In areas like Lordstown, Ohio, a village about 50 miles each of Cleveland that has been the home to a GM factory for more than 42 years, their $4.2 million budget would take a $3 million hit if GM went under. Layoffs of police officers and park programs would be inevitable.

Senator Sherrod Brown (D-Ohio) argues that the collapse of the auto industry goes even further than lost jobs and small businesses that go under as a result. He insists that letting the auto industry collapse also causes a national security risk. In the two world wars, the auto industry was essential. “If we ever need that national security production for serious defense, for any kind of significant war, it’s gone,” he said.

Despite the endless parade of bad economic news all of us keep hearing from every media outlet, the 2008 online holiday shopping could break some records. In what has traditionally been called “Cyber Monday” (the Monday after Thanksgiving, traditionally the busiest online shopping day of the year), there should be plenty of people poised at their home and office computers — with a mouse and a list of shopping needs at the ready. Don’t look now, but there are so many sales planned, you might have a hard time deciding where to shop first.

For fastest results, though, visit cybermonday.org. A one-stop-online shopping Mecca awaits you there.

According to Shop.org, 84 percent of online retailers plan to have Cyber Monday promotions. That’s a full 12 percent higher than Cyber Monday last year. And while the economic downturn began way more than a year ago, well … you know the rest.

The bottom line is that most major retailers know they’re likely to have a lot of left-over inventory this shopping season. While companies (especially big-box retailers) will try to put a positive spin that “Black Friday” (the day after Thanksgiving) sales still attracted tons of customers (some reports last week even predicted an increase in overall sales from 2007), every large retailer still dreads excess inventory.

From toys to electronics to everyday items, the shelves of brick-and-mortar shops (i.e., retail outlets) are very likely to remain well-stocked — even a month from now. Sure, some people faithfully checked all the shopping circulars and waited outside in the cold for 5 am store openings on Black Friday, but the simple convenience of sitting down at your desk — or better yet, using a laptop from the comfort of your living room couch — is what every online retailer is betting on.

So plan to check out your favorite retailers online this Cyber Monday: Nearly nine out of every 10 will be having sales. If you’ve still got your heart set on that new winter coat, or you’ve just got to have that big-screen TV, both should be readily available.