 | | | Subject: I Think it's Time to Panic Now.
Posted Dec 21, 2008 by Deke
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 | | Sometimes it's strange how something that would normally be completely insignificant triggers the realisation that things have gone beyond the point that you have control over and the do-dah has hit the fan without you realising it. It's all gone badly wrong, and you weren't even aware 'just' how bad things had become.
Back in September or so, the so called 'credit crunch' was rearing it's ugly head. Figures for new car sales were badly down. But we had weathered troughs before. My side of things in the 'service' side of the business were not so bad. We were still busy. We had a booking list for services and repairs that extended out for almost a week, which is not bad for a garage of our size, although a year ago it was nearer two.
In October things deteriorated somewhat, but we were still busy. The sales dept, which handles new and used car sales, were definitely feeling the pinch and on several days not one customer looking for a new car darkened our doorstep.
Come November we were all called together in the workshop to hear the news. That the company could not sustain the losses it was making without taking some sort of action. Plans had been laid behind the scenes and with effect from that day a number of staff were to be called into the office to receive the news that they were redundant. We waited through the day, and as each hour dragged on more people disappeared and eventually the cull was over. In all, throughout our group about a dozen went on the scrapheap. It did not go unnoticed that not one redundancy was made within the sales department.
The company reserved its right to make whatever further adjustments it saw fit, although it promised that full consultation would take place. Over the following month delegates from each department were elected and they attended the meetings that handed down the decisions that had already been made.
Early December it had become quite apparent that car sales were still down. In fact they were nearly non existent. Lately they have picked up slightly, but the damage to November's trading figures has already been done. Now you have to appreciate that our company is linked to a major concessionaire in the UK and is contracted to buy in a significant number of used cars through the year. The market for used cars has also headed south and the required stock, which previously was easily sold on, is accumulating with us. The sales dept in October had wisely stopped buying in 'desirable' cars, despite there being at least two or three people each week asking what would be the buy-in price for their car. The answer of course being that there wasn't one.
We have a main car park which accommodates some 200 cars, which is for the use of the service dpt and sales for those cars about to be, or are in prep to be sold. We also have two rented overflow parks in nearby fields that house the long term stayers, and the bought in turkeys and the rubbish that is waiting to be passed onto independent traders, or even to go to trade auctions.
In all of this the service side has been relatively busy. We are kept going on a day to day, hand to mouth existance, but at least with enough work to keep everyone busy. So from the immediate point of view the only thing that has changed is the loss of a waiting list. We still have the daily aggro and the rush to get everything completed on time, but by and large the downturn isn't obvious to the service dept.
We also have a key closet with boards around the wall with hooks for the keys of the stocked cars. The boards have six rows of 50 keys. about 300 cars. On Tuesday of last week I went into the cupboard, as I do many times each day, and it hit me for the first time, with all the subtlety if a brick between the eyes, that every hook was filled. And that is in addition to about another 100 or so cars on our forecourt and out on loan. In total there is about 450 cars in our hands going absolutely nowhere.
Mid December has brought the news that the company has decided that the redundancies haven't had the desired effect. They wouldn't of course, as they were too few and too late. They are now going to make an across the board pay reduction of 10%. No consultation there then. The reduction will take place from January and it can be refused by the individual. If you do refuse however, notice will be served. Oh, and they still reserve the right to make further redundancies if that doesn't have the desired effect.
Rumour has it that more redundancies will be made, possibly in Jan - Feb. and that it will be the service dept which is going to receive the lion's share of the cuts. ...and so it is on that note that we approach the new year.
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| | | Subject: I Think it's Time to Panic Now.
Posted Dec 22, 2008 by AlsoRan80
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 | | Dear Deke,
A really well written expose of what all the world reduction in trade is all about.
Thank you so much for writing it so clearly and logiclly.
I thinhk that this is probably the time NOT to panic. !! If we do I think that things maight get much worse.
Anyway, in time, I am sure things will rectify themselves. the whole social structure of the world is changing, and it is fascinating to see how countries whose populations aspired to not very much, are now making demands.
That is good I belie although not so good for the Fat Cats, !!
A happy Christmas dea Deke. I hope you have time to tell me if and when the ISS will be passing my way again.
good luck
Christiane alsoRan80
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| | | Subject: I Think it's Time to Panic Now.
Posted Dec 23, 2008 by  Who are you and what have you done with Gosho?
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| | We're living in very interesting times, to be sure. I can recall two similar times that I've lived through - the three-day week of the early 70s and the property crash of the late 80s/early 90s. The first didn't hit me too much because I was still at school, but the second put the kibosh on me for about five years because I was running a little man-and-a-van removals and deliveries business at the time. I was working eight days a week and making money hand over fist. Then people stopped moving house quite so much (although people will always be moving from one place to another in London). The the Gulf War happened which cut my trips to and from Heathrow cargo terminal from three or four a week to one or two, because I was carrying goods to be flown out to Turkey and Cyprus. Those were pretty lucrative but the number of weekly flights to Istanbul were more than halved. I went from being better off than I'd ever been in my life to running an overdraft for four or five years, but I managed to keep my head above water.
This current situation is starting to worry me because "this is not the end. It is not even the beginning of the end. but it is, perhaps, the end of the beginning", no matter what kind of spin the politicians might put on it. It worries me because I work at a cinema that serves food and drink during the film. During the good times people will always go and see movies, and they'll do the same during the bad times too because it's a cheap way to escape real life for a few hours. But if you're short of cash, are you going to a cinema that charges you $8 for a ticket and then another $30 or $40 for a meal, or are you going to just spend the $8 at a regular movie house? And even if you do come to our cinema, perhaps you're only going to have some popcorn and a soda as opposed to a couple of beers or glasses of wine, and a hamburger. It could hit us a lot harder than most other cinemas because we make such a big proportion of our turnover from food and beverage sales.
It seems like this part of the world is relatively ring-fenced against the economic crisis... for now. The whole of the sun belt, and central Texas in particular, is a boom area. High-rise luxury apartment blocks are growing like weeds in downtown Austin. In fact there are developments, both low-rise and 50-storey all over town. And my rent keeps going up because of it. There will always be people in Texas with obscene amounts of money.
But there are failures, all the same. There was going to be a development of condos across the street from where I live but it fell through, and now the land's for sale. The same thing happened to another one opposite where I work. And last year everyone in the apartment complex next to mine was kicked out, the apartments renovated and put up for sale as condominiums. The last time I looked they'd only sold a handful of them. And my rent is still going up! Three years ago I was paying about $450 a month. Then it went up to $480 - no big deal. Last year it jumped to $560, and when I renew again in a month or so it's going to be $615! For a 350 sq ft studio flat! I might as well be in London for that kind of rent.
So we'll see what next 12 months may bring. I've been very careful over the past three or four years - haven't lived beyond my means, no loans, no credit cards, only the minimum of monthly bills, a little bit tucked away in a savings account for a rainy day, so I consider myself fairly well cushioned. But I know that there are plenty who aren't so fortunate, and not all of them have been spendthrifts who ran up huge CC bills or bought more house than they could possibly afford or took out a third mortgage just to buy a motorboat.
And this morning I heard a report on the news that when asked (by Associated Press, I think) what they'd done with the money given to them by the government, not one of the banks questioned could give specifics about what they'd done with it - they could only spout vague, press release-sounding somethings along the line of 'We're making loans' or 'We've lent some of it; we've not lent some of it. We're not giving any accounting of it to the public'. And they don't have to because the bail-out was rushed through and accountability wasn't included.
Right.
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| | | Subject: I Think it's Time to Panic Now.
Posted Dec 23, 2008 by AlsoRan80
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| | Dear Gosho,
Another extremely well written analysis of the Economic situation in your part of the world. Thank you so much.
I shall keep this these treads and read them in the New Year when my brain is not so addled - hopefully - by all the various things going on both in my life, healthwise, and the world around us.
It is good to hear optimistic reports of the American economic situation. So many of the "richer" countries are so aware of the social and economic situations existing in the less decveloped countries and are desperately trying to remedy the situation.
May I wish you a very happy and peaceful Christmas and all good things you wish for yourself in the New Year.
sincerely,
Christiane
alsoRan80
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| | | Subject: I Think it's Time to Panic Now.
Posted Dec 23, 2008 by Who are you and what have you done with Gosho?
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| | One thing I forgot to mention as I got further into that post.
Short time used to be an accepted way of working life, even for those who weren't in seasonal work. I think the general consensus these days is that short time is a thing of an archaic and uncivilised past. Not so. Take a look at this http://www.xach.com/moviecharts/
Concentrate on the 'Normal scale' images. That bulge in the middle is the summer blockbuster season, the thicker bits at each end are Christmas, and the thin bits in between are spring and autumn. For most cinemas, that's relatively easy to deal with - all you have to do is take on a few students during the busy times, and very copacetically they happen to be on holiday at the same time and are looking for jobs to make some money. It's a little more difficult for us though because we're as much as a restaurant as we are a cinema and we have a kitchen and bar to keep running throughout the year. We have to try and find things to pull in the punters during the slower periods because we have more people on the payroll (servers, kitchen staff, bartenders etc) and expensive equipment that needs to pay its way all year round.
But we do get slow at those times and there are fewer shifts and hours to go round. I notice it particularly because I write the bar schedule. During the busy times I might have to schedule two daytime and four evening bartenders on a weekday, but when we're slow we only need half that many, and we have far fewer temporary/student workers than some places, so people feel the pinch. Come the end of July/early August I put up a note in the bar that the summer's gravy train is reaching the end of the line and now might be a good time to start putting some money away to help pay rent and bills until it picks up again towards Christmas (usually in the middle of November). Bartenders who are getting 35 and 40 hours a week might find themselves with only 25 to 30 in September and October.
That's how the restaurant and bar industry works in America. When I was employed at a pub in London I was full-time and got a guaranteed 40 hours a week, no matter how busy or not we were. That doesn't happen here. If things are quiet, you get sent home. It's common practice. If there are likely to be fewer punters coming to see the films, I have to schedule fewer bartenders. That means some people are only going to get two or three shifts a week instead of five, and they'll be shorter shifts.
I feel that most people these days can't or won't accept the idea of short time in order to get through tough or slow times, despite the fact that it might help them in the long run by keeping the company afloat.
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| | | Subject: I Think it's Time to Panic Now.
Posted Dec 23, 2008 by Deke
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| | I have a really, really bad feeling about the current situation and it depresses the hell out of me.
What gets to me most is the figures being bandied about. Not just millions but billions and even the odd mention of a trillion. All money that that is to be borrowed and spent on an ailing economy that for years has not had any real sort of a manufacturing base to create the wealth that will pay back the loans. In much the same way there doesn’t seem to be any real movement by the financial houses to actually use the money already fed into them to provide any meaningful plan of action. But heavy bonuses are still being paid to individuals that have received public money.
I do remember the previous recessions. I can remember the government of the time going cap in hand to the IMF to be bailed out. I remember the limit on money that you could take abroad, about £40 quid each, and being regarded as the paupers of Europe. But somehow you knew that we would come through it. I just don’t see any reason for optimism this time.
I can quite foresee that the US is big enough to weather the storm eventually. I don’t think the UK is. It doesn’t make things, at least, not in the same way that it did. No auto industry, no aviation industry, no shipbuilding, no steel, no coal, next to nothing in fact. Put on top of that we sold off half of the UK’s gold reserves, and that for years we’ve relied on those strangely amorphous ‘Invisible earnings’ of insurance, stocks and banking. Suddenly we find that their foundations were built on sand. Even the Archbishop of Canterbury calls it a reality check and likens the plan to spend its way out of the mess as ‘the addict returning to the drug‘.
I think that our chickens have come home to roost in a big way, and I don’t think there’s a damn thing we can do about it. All of the posturing by politicians trying to spend its way out of a crisis isn’t going to work this time. The whole problem is much too profound. Gordon Brown may be savouring his place in the limelight as saviour of the world and has just pledged that he is going to create a 100.000 jobs. Apparently it’s to be done in school and public building.
I’d just like to take him down to out local branch of Tesco. Going out from the tills there are a series of notice boards advertising local services and bits and pieces for sale. One board used to advertise vacancies in the store. There was always a selection of vacancies for till operators, goods inward, night shift shelf fillers, that sort of thing. Over the last month there hasn’t been one single vacancy on offer. Jobs are the means of keeping a roof over your head. The trouble is that there aren’t enough jobs to go around any longer. Anyone surplus to requirement at the moment isn’t going to be gainfully employed again in the near future.
A week ago Woolworths, the high street store went to the wall. Today another high street chain who‘s been around for years Whittards went into receivership. Most of the local chain store shops in the area are discounting heavily and brought forward their Sales to before Christmas.
Funnily enough the other day I thought about that analogy of the cinema doing well during the American depression as it offered escapism. I’ve never been to a cinema that offered meals before, but I did go to a theatre that did, and that was in NY. It was quite packed, but I couldn’t get my head around sitting down to a knife and fork meal while watching a show. In the UK at a lot of the multi screen cinemas started offering ’finger food’. I don’t think it was much of a success as it seems to have died a death in the last couple of years. Sitting next to someone scoffing a big Mac was no joke.
Car sales have been somewhat seasonal for a long time anyway. The new registration change made sure of that. December has usually been quite good with Christmas sales and Jan - Feb nearly always take a dive and pick up again in the spring. This month though it is almost completely flat. I think that we’ve made sales of about five cars this week. It will also have a knock-on effect for the service side when in a years time all those cars that weren’t sold lately, won’t be having a first annual service next year. So we have a thin time to look forward to then.
One of the things that was suggested was a version of short time for us too. In other words, close a five day working week down to four. But that was a non-starter, partly because we are keeping busy at the moment, and all it’s likely to achieve is losing those people that would have brought their car s in on that day. Our technicians are already finding their answer to the 10% pay cut by simply working 10% slower. They are not chasing bonus any longer and we are finding it harder to get any to stay overtime to finish off jobs or work Saturday mornings. They’re off doing their own ‘homers’ and cutting out the middle men, ie the garage.
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| | | Subject: I Think it's Time to Panic Now.
Posted Dec 24, 2008 by AlsoRan80
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Oh dear Deke,
I am so sad that you are so depressed. All that you say is true. but I refuse to be downhearted. somehow, some way we will maanage to pick up.
I do not know how. but try and put something happy on your computer - like how you managed to help me see the ISS from my front verandah, little stoep really. In fact how you fixed up your computer. that is wonderful. !!
Think of me going into my huge tube today. I am not going to enjoy it but reckon I must do it to find out what has happened.
go well, my friend
Christiane
AlsoRan80
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| | | Subject: I Think it's Time to Panic Now.
Posted Jan 8, 2009 by Deke
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| | >>New car sales in Britain alone dropped 11 percent in 2008, according to figures published by the Society of Motor Manufacturers and Traders (SMMT) on Wednesday. Nissan sold 66,336 new cars in Britain last year, just 0.14 percent fewer than in 2007.
But as the economic crisis began to bite, its sales for December fell 26.68 percent compared with the same month in 2007.<<
In some garage showrooms sale of new cars dropped by more than 50% in the period before Christmas. If the annual drop in sales was 'only' 11% overall, would one of the most stable of the UK manufacturers whose sales had dropped 0.14% be laying off 25% of its workforce?
Nissan in Sunderland is to shed some 1200 jobs in the near future. That seems a significant reaction to a small (for them) loss of sales. Perhaps they see a further much greater loss ahead.
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| | | Subject: I Think it's Time to Panic Now.
Posted Jan 9, 2009 by AlsoRan80
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Gosho - what a lovely memory.
I remember woolies with much affection
When I swam my first strokes, my Papa gave me 2/6 which I suppose was a fortune 75 years ago. !!
I remember going into woolies - I think it was, and buying presents for all the family with the proceeds of my becoming waterborne.
Hope you enjoy San Francisco. what a glorious place to live. and that wonderful park - whose name one again escapes me in spite of Gnoman reminding me, but where El Capitan is. I have marvellous memories of that as well.
Have a good day.
Christiane
alsoran80
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