Welcome to hard times!

I’ll hazard a guess that before we get ‘official’ confirmation, we’re already in a recession. Indeed we’re in one with plenty of company.

Last month we travelled around 2,500 miles across the south western United States. We bought a lot of gas. We paid between $4.07 and $4.75 per gallon depending on State taxes, Californians paying way more than their neighbours. Although that’s roughly half of what we pay, it’s still seeing a rise in price of around 40% for those who’ve always taken the price of gas as a given, cheap!

This price hike has quickly changed American marketing strategy when it comes to car sales. I’d never before seen the emphasis placed firmly on fuel consumption. Dealers now offer 1 year’s ‘free gas’ with certain models and the daily soaring cost was a regular conversation starter with complete strangers genuinely interested to learn what the price is in Europe. Jobs are quickly suffering too. Last month classic RV manufacturer Winnebago announced a net income down by a massive 73% resulting in factory closures. We listened to a radio station phone in which a caller stated it now costs him $500 to fill his up and he had listed it for sale, but who was going to buy such a guzzling dinosaur?

Cars, SUVs and pick-ups are struggling to maintain sales too. A Californian pal emailed me this week and said that Chrysler issued a denial that they’re about to file for bankruptcy, but they’ve had to close a factory with the loss of 2,400 jobs.

It’s not rocket science and one doesn’t have to be Warren Buffet to predict that if the American automobile industry is in trouble, plenty of others worldwide had better batten down the hatches. Yesterday I went into town for lunch. 3 empty shops in Central Arcade, 4 more in Henblas Street alone and we’re seeing a new development in Eagles Meadow. Scary stuff indeed and unfortunate timing to say the least.


nick