The Crash Begins

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AutoNation – the country’s largest retail dealership conglomerate, just announced it will lay off 7,000 people Because Corona. Not because of the virus – but because of hysteria over the virus, which is being used to shut down the economy.

From the Financial Post:

AutoNation, Inc. said on Friday sales of new and used vehicles halved in the last two weeks of March due to global coronavirus-led lockdowns, forcing the company to place about 7,000 employees on unpaid leave.

The largest U.S. auto dealership chain said it was implementing cost-cutting measures, including temporary pay cuts for staff, curtailment of advertising expenses and postponing over $50 million of capital expenditures through the second quarter of 2020.

“Markets from which we derive approximately 95% of our total revenue are currently under extensive ‘shelter in place’ or ‘stay at home’ orders … which significantly restrict our business operations,” AutoNation said in a regulatory filing. 

The company currently has about $1.1 billion of liquidity, including over $400 million of cash and about $700 million in its revolving credit facility.

AutoNation had about 25,000 employees as of 2019.

Getting sick of this yet?

. . .

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26 COMMENTS

  1. Fuhrer Murphy just announced that “no cost is too high when it comes to saving lives”. And you know what that means.

  2. They’re sitting on a billion dollars of cash and have access to 0% “just pay us back whenever” credit and they still feel it necessary to lay off 7000 employees?

    F*** those guys in the neck!

  3. Here in Benito Mussolini Cuomo’s NY….all dealerships’ retail operations are closed under his mandate as non-essential. Service is opened, but not much action going on there either as the whole state is closed.

  4. If you have the cash or cash flow to afford it, NOW IS AN AWESOME TIME TO BUY A CAR!
    They will literally be getting on your knees to buy one to record any kind of transaction and keep Joe Salesman on the lot. I bet that 0% interest loan will be going out to anyone with a pulse these days.

    Eric, ethical question. Is it wrong to go test drive a car/truck in these times just for fun with zero intention to buy? My furlough week is coming and looking for stuff to take my son to do. (nissan titan)
    The way things are going the salesman might climb in our car to go home with us to find a bed and a warm meal.

    • Not yet, BB! They’re banking (literally) on the “stimulus” to keep things going (At least temporarily)- AFTER that peters-out….then they’ll likely start getting desperate. And even if ya pays cash for a vee-hickle….remember, these new monstrosities are not viable in the long-term…..and I’d think that we should be thinking about the long-term, what with being on the verge of a veritable major change (if not out-and-out collapse) of the world as we know it- e.g. we should be looking for that which will be durable, and which we can easily and cheaply repair- as opposed to things which make us dependent upon a stealership).

          • My buddy has a 94 7.3 IDI Turbo he barely drives. He bought it from our work after it sat on the lot for 2 years. Sales didn’t want to put 2 batteries in it to see f it would even start. He only did the batteries to drive it and a few months later threw a set of injectors in it for a slightly rough idle.

          • Thanks Nunz. When you pick up that Ford get me the Chevy and I’ll send you a check. I really appreciate it. Oh, I don’t want the 3/4 ton, I’m partial to the one ton single wheel 4wheel drive with X cab and long bed. I think I’ll bag my next one and install a 2 speed Brown-Lipe box behind the transfer case for that second OD. I swear, every time I get close to 70 mph I reach over and try to shift into that second OD just out of habit. When you get to 2500 rpm it’s just a natural thing to do……at least for me.

            For many years if I were driving a vehicle with a center shift, manual or auto, I’d come up on a hill and as it started loading up I’d reach over to downshift and the wife would slap my hand and say “You’re not in a damned truck”. Oh, I forgot.

            The last time I drove a car it was a 200 Dodge. I got out of a 379 Peterbilt and into it. I was nervous as a cat in a room full of rocking chairs cause I couldn’t see shit. I detest new cars.

            • I’ll take an SRW 1-ton, too, 8! 4×4, extended or crew cab with long bed…and manual, of course.

              Car? I think the last time I drove one was in ’01 before moving here- Town Car. (And it was a ’92)- I can’t think of one car made in the last 50 years that I’d be content to drive. Would have to be something from the 60’s. Maybe an early 80’s Caddy, Olds or Buick….but not enough to want to fix one up or put much into it/put up with old car problems for….

        • I heard that the older mechanical diesels can run on practically anything. Perfect for a “Mad Max” scenario.

          • I don’t think they have to be mechanical. Just not one that takes cat piss to run. When I change fuel filters and fill em up with ATF, I call that a tune-up in a bottle.

            • Nah, all of these electronically controlled pressure-injected diesels, including the 7.3 PSDs, while they can run for a while on various fuels, it gunks everything up, including the sensors, before long.

              That’s one of the reason I always say “If it ain’t got an injector pump, it ain’t a real diesel”. The simple, mechanically-injected engines can run on anything, pretty much forever- and can run without a battery- so if ya got a manual tranny and dead battery, just roll start it, and yer good to go.

              And unlike the fancy ‘puterized ones, there’s virtually nothing to go wrong with ’em- if the engine ain’t totally worn-out, and will start….it’ll run and run and run. With everything after the 7.3 IDI and Cummins 12V, there are dozens of sensors and control modules and connectors to constantly break.

              Everyone always praises the 7.3 PSDs, but everyone I know who has one is constantly replacing sensors and electronics….and I mean CONSTANTLY. But they take it, ’cause compared to everything that came after it, it seems reasonable….

              • Nunz, I made the statement that old diesels didn’t need a battery(oh, I remember, it was an EMP discussion). A guy tried to take me to task. Well, you have to have an alternator cause you need a starter.

                Not true actually. A friend lived on a hill with an old 7.3 Ford and the starter didn’t work but he used it all the time. Parked on the hill by the house or in the pasture, parked on a steep hill and he’d just clutch it, let er roll and stuck in 2nd or 3rd gear it would fire up at maybe 10 mph and run till you stopped it and then let out the clutch in OD and wait for the next time. I don’t remember him needing a battery. I started my 93 Turbo Diesel the same way and only turned on the ignition cause of the steering lock plus gauges were electric, not that a gauge needs to work for a truck to run.

                But either of those would be a great bugout truck if you had a hill handy, which I no longer do. But I have run a bit of everything in it for fuel and while it affected how it ran, it ran and sometimes that’s all you require.

                I don’t think(and I have researched this)that an EMP event would kill your batteries so anything that might need to be powered would have it. Yep, I agree it might ruin a diode or two in the alternator but you’d have two batteries even if the solenoid for the starter didn’t work and you’d be able to run a long way. A K3500 and an F 350 would be able to move some big stuff in your way. When I was younger and still to this day, I see well in the dark so headlights are not a necessity. Some gearlube and a bit of gasoline and you’d be on your way. Not sure that with Amsoil 85W-100 it wouldn’t work fine. Some Canola oil, and in hot weather, lard in the tank would keep you going. If it will burn, it will run that engine.

                • 8, I don’t worry about EMP- I just don’t see it as a likely thing- ‘least not in a way that will affect electro-mechanical stuff- but I think more about being self-sufficient in the middle of nowhere, and or if stores aren’t an option (That day appears to be here!)…..but especially, reagrdless of the times, not constantly having to maintain some sensitive computerized BS.

                  Heh, yeah, before I left NY, I traded my 6.9 rollback to a friend who lived on a big hill. The truck had one problem…it nearly impossible to start cold (Turned out to be a fuel pressure problem- a little O-ring in the return or something, that would let air in)- so before my friend figgered out what it was, and fixed it, he discovered that if he parked the truck facing downhill, it would always start easily in the morning. So while he was at it, since it was facing downhill anyway, and so as not to disturb his neighbors, he’d just hold the clutch in, in the morning and let it roll a ways down the hill to start it (Never exactly figured out where the little leak was…so he ended up installing an outboard motor primer bulb in the fuel line, and would just squeeze it a few times when he needed to start the truck cold if it wasn’t on the hill! Pffft, millionaires!)

                  • Nunz, this was just one of those convos that get started and take on a life of their own.

                    This other guy was trying his best to show I didn’t know what I was talking about. So I added fuel to the fire and said the guy needed new tires too and the new Cooper 16 ply trailer tires had the same lug specs his Ford did so he drove it for months with real skinny trailer tires. That truck was rough anyway so it didn’t really make a difference, esp. since he drove it slow and rarely got on pavement.

                    That nearly killed the guy for some reason. You can’t run trailer tire on a pickup. I offered to give him his number so he could ask just how long that went on.

                    Several months later when I next saw my friend he had another pickup, a square body Dodge with a Cummins. It made the Ford seem like driving a Coupe de Ville but his trailer had its tires back and the Dodge got great mileage even if I could barely stand to ride in it.

                    That gooseneck trailer had tandem duals on it and he used to haul some hellacious loads.

                    He built sideboards for it and used it to haul cattle.

                    I went to San Angelo with him one night with a load of cattle, about 120 miles one way. Even unloaded that truck never rode better. I asked if he intended to keep it hooked up all the time. He said he wished he could. Anything to take that hard bounce/jounce out of it.

                    A guy will do whatever it takes sometimes. I stopped for gas one day after having replaced the rear brakes on my one ton rear end under my 3/4T pickup. Well, the drums were worn out so it shed some pieces and parts after that rough ride since the shoes were so far from the drums. I put it in gear and it bound up and wouldn’t go. I tried reverse and it was fine in that mode.

                    My best friend was with me and said “I guess we can drive reverse home”. That’s what I did too. Being an old trucker, I had no problem driving in reverse so I drove about 40mph 11 miles to the house and backed into the barn. About half an hour later we were back to running forward although my buddy was still green from going backward. Looking into my big side mirrors it was forward for me but he didn’t fare as well. Well, it is what it is sometimes and you just make the best of it. Of course I know I don’t have to tell you.

                    • Damn, I’ve always hated those square-body Dodges! Last Dodge trucks I liked were made in the 60’s (Love those!)

                      11 miles in reverse…. I heard a similar story from the father of the guy what did it…forget why he had to do it though….but that is something I could never do!

                      I have a friernd too who used to tow heavy loads across half the country with a SRW 1-ton and trailer, with crappy tires on both. Used to blow a tire or two on every trip. I finally convinced him to get appropriately load-rated tires, instead of the cheapest tires that’d fit….. He finally sawe the light, and stopped blowing tires.

                    • Nunz, I was attending a meeting that broke for a noon break. A guy I was speaking with decided to go to town with me.
                      Driving down the road and bs’ing he said about Blackie Well, there’s one thing you can do in this truck you can’t do in mine(squre body Dodge diesel). What is that? I asked. He replied “Have this conversation”. From the mouth of an owner……

      • I have already seen the psyop articles related to that. Ozone depletion and air pollution have recovered from everyone being home! Cheap oil will help usher in renewables and EVs!
        My local Lowes now only has half of their yard equipment as eeeevil gas burning and has their electric ones front and center. I can already see some article or mandate for forced stay at home days for certain people for the good of the environment. People should be wary of these types of articles and their intent.

        • I’ve seen a couple such reports about reduced air pollution. I notice no difference. But then again when I was a small child there was real pollution. To me everything has been clean for 30 years.

          Anyway the lockdowns will be regular from now on. Not only do the lockdowns cause later disease spikes for the ones they aim to ‘flatten’ according to some modeling but now it will be the default safety cult response. So it doesn’t matter if they make an environmental scam out of it, it’s baked in without it.

    • I mean, you can be sure that a lot of people who get that extra $600/week on unemployment, are gonna run out and buy a new car, even if they don’t know where their next dollar might be coming from 6 months from now. When they default, all hell will break loose….. After that happens, if one must have a new vee-hickle….THAT will be the time – as then there will be some huge deals on new, or nearly new vehicles.

    • That’s assuming the dealer is OPEN to conduct the transaction! In my area, auto dealers have been declared “non-essential” businesses, and therefore can’t remain open. The service dept. and independent shops can remain open; the retail side of the dealership can’t remain open, nor can independent auto dealers (e.g. used car lots) cannot remain open. SO! How can folks buy a car now, even if they want to and can do so?

      BTW, only 11 states as of this morning hadn’t instituted lockdowns. So, what remains of the market is in tatters. Only a fraction of auto retail outlets (i.e. dealers) are even open. There are fewer buyers for their cars, because most buyers have had their livelihoods taken away from them. If this goes on much past late April or early May…well, I don’t even want to contemplate it.

    • I’m sure thinking about a new pickup and/or suv for ca$h if they go on fire sale prices like in 2009/2010.

      Not what I want, but I’m getting too old to be working on stuff all the time. And I don’t need another 200K++ miler which is about all that’s out there on the older used market.

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