Motormouth Online

Let's face it, problems in the collapse of the auto industry and impending collapse of the health industry do not come from one single scapegoat. Almost every interest group associated with the American auto industry must accept some blame and therefore must be part of the solution.

• Did unions fail by demanding that their workers get paid 90% of their salaries even when they were not working?
  
• Did management fail by building a bureaucracy that couldn't rapidly respond to market trends?
  
• Were investors short sighted in their demand and expectations from the company?
  
• Did the market give lip service to safety, environmental and economy standards while continuing to purchase high-horsepower mega-sized truck-based SUV's for commuting from the burbs?
  

Sure they all were at fault. But one group that escaped scrutiny in both the automotive and health industry debate was the role of the personal injury attorney.

I am not unaware of the suffering caused by auto accidents. In addition to the 40,000 fatalities every year on American roads, the suffering and hardships of those injured and their families are often exacerbated by negligent faulty designs. However, greedy and opportunistic Personal Injury attorneys do little to help the problem. I have witnessed how manufacturers refuse to change a faulty design for fear that change would be an admission of guilt, opening them up to even greater legal liability for the previous design.

Automotive design continues to evolve, but the push for safer automobiles should come from consumer demand and active government regulations rather than punitive awards.

Product liability cases remain a legal lottery where few consumers benefit but many attorneys get wealthy. In the end, the cost is always passed on in the prices of future products.

According to the current issue of Car and Driver Magazine, you are more of a danger on the road reading and responding to text messages than driving drunk.

( http://www.caranddriver.com/ )

Hopefully, this will start a discussion about the dangers of driving while distracted. As a former auto insurance professional and a certified driving instructor, I am interested in improving safety on the road. But as a an advocate for personal freedom, I'm concerned about using increasing proliferation of laws to enforce good judgment. We kill about 40,000 Americans each year on our roads in auto accidents. While increased penalties and ever restrictive laws have some positive effects, only internalizing good behavior and judgment will have real benefits. We have seen states pass stronger laws and manufacturers build safer cars, but encouraging good behavior, reducing distractions and public drivers education has taken a back seat in the effort to save lives.

The Car and Driver study is a good step in showing the dangers from distractions and reaction time. I'm not buying the total conclusion yet, but I appreciate the effort. Focusing entirely on reaction times, nothing in this study factors in the reduction of inhabitations that often comes from alcohol consumption. Let's face it drinking often allows one to do things while intoxicated that you wouldn't dream about doing if sober. Often a feeling of invincibility will make a driver take chances that they would normally take. This lack of inhabitation has nothing to do with reaction times, but reduced reaction times make these procedures even more dangerous than ever.

But, cell phone use is just one of the culprits that steal our attention. Eating fast food from drive up windows, drinking coffee, smoking, loud music and even unruly children can present deadly distractions as well. How about a nagging spouse? How can we outlaw this?

How about a return to Drivers Education in our public schools and public service education efforts from the cell phone manufacturers to get serious about saving lives.

Chrysler has already unceremoniously fired almost 800 of it's dealers. In many cases, these are dealerships that have been cornerstones of their communities for decades. They were given just weeks to sell their parts, and cars because Chrysler already considers them sold to individual dealers. General Motors expects to cut thousands of their dealers as part of their restricting process. Now that they are in bankruptcy, some were given eighteen months to clear out and others just a few days.

Mark Alford recently asked me in an interview on the Fox 4 Morning Show if smaller leaner family owned dealers or larger corporate mega dealers were best able to survive the turmoil. GM and Chrysler already have already answered that they favor corporations rather than the small business owner. Is this the best approach or is it the same thinking that got them into trouble originally?

GM and Chrysler understand that modern cars require expensive and sophisticated diagnostic equipment to service their increasingly complex vehicles. Large inventories offer consumers selection options that small businesses can't afford and prime suburban real estate for migrating upper income families requires deep pockets. Therefore, manufacturing companies want to support dealers who have the ability to invest in capital expenses like new facilities and equipment. They want upscale showrooms, services for consumers and buying experiences that increases the perceived value of the products.

On the other hand, cars have to be sold rather than bought. If autos were like toasters, you could buy them at Wal-Mart. The professional services of a sales person who understands your wants and needs cannot be overestimated. Local dealerships are often run as small businesses who know their customers and the community they serve. Efficiencies of a small business are well documented because they are able to adapt at the drop of the hat. Many people believe that the large bureaucracy of General Motors and their inability to change was their real demise.

Kansas City has long been viewed as the most competitive automotive market in the world. Because there were so many dealers in such a small market, dealers complained it was difficult to make large profits. No large corporate mega-dealer has ever been able to dominate this market. Because of that consumers often got great deals, but this is about to change.

Will fewer dealers mean more cars sold? Will fewer dealers mean that the manufacturers will be more profitable? I believe this is a risk. You do not buy a car from Ford, GM, Chrysler or any other manufacturer. You purchase the auto from the local dealer. It's the law. The dealer is the customer of the manufacturer, not the consumer. General Motors claimed that the 1,100 dealers fired initially made up less than 10% of their sales. So if sales are down 40%, why would I further reduce my sales by 10% to get rid of dealers that effectively cost no money to maintain? The local car dealer purchases the car from the manufacturer. They purchase parts, training, equipment, signage, and even brochures from the manufacturer. So where is the savings coming from?

It's true that the remaining dealers will make more money when their competition is taken away. However, I believe it is a risk to assume that a few stronger dealers will sell more vehicles overall than several smaller dealers. To me Ford, Chrysler and GM have an inherent competitive advantage over imports because of the number of dealers spread out over the country. If I get in my Chevrolet and drive from Kansas City to Denver and I have a problem in Salina Kansas, I can be assured that there is a Chevrolet dealer nearby. If I am in my Mazda, help is further away. That's an undeniable advantage for GM.

I know the world is changing. The rich keep getting richer, suburbs keep expanding, big box stores and shopping malls keep squeezing the independent businessperson. But, our world is not richer for their loss and there is a real danger on depending on the rise of the corporation. It is said that government bailouts were needed because banks, insurance companies and General Motors were too big to fail. Maybe that was the original problem.