NYT bellweather transportation industry report "Out of the Spotlight, an Industry Copes With Crisis"

[bobd0]

A good read from The Times' Business Day section.

I was in transportation for many years and gaging the economy based on transportation was, needless to say, a very simple task. There are many omens in the industry as reported below. I'm afraid this economic crisis is going to be longer and deeper than many people realize. I hope the Obama administration can limit the effects of what I've begun to term, "The Bush Depression". But with the nation handcuffed by two more long, crucial months of the worst corruption and willful incompetence ever visited on our nation, prospects for rapid economic recovery are dimmer, IMO.

http://www.nytimes.com/2008/11/29/business/29nocera.html?ref=todayspaper

Out of the Spotlight, an Industry Copes With Crisis

When you live and work in New York, it is easy to succumb to the fallacy that the financial crisis is all about us. It's about giant, New York-based institutions failing or coming close to failing. It's about high-stakes weekends in the offices of the New York Federal Reserve. It's about credit-default swaps and mortgage-backed securities and the wild swings of the New York stock exchange. It's about Jamie Dimon and Richard Fuld.

But of course it's not just about us. It is not even primarily about Washington, where so much of the response to the crisis —$700 billion bailouts! Front-page Congressional hearings! Economic summit meetings! — has taken place.

No, it is about everybody, in every part of the country: neighborhoods awash in foreclosures and For Sale signs. Layoffs at the worst possible time. Small companies struggling to stay alive. Credit card companies raising rates unconscionably. People with perfectly fine credit scores finding it all but impossible to get loans.

The credit crisis is rippling up and down the economy in ways that may not create obvious headlines but that affect the way people do their business and live their lives. People, for instance, who sell and drive trucks.

"Even in good times, the trucking community works on razor-thin, single-digit margins," said G. David Gerrard, who runs a Chicago-area business that is the largest truck dealership in the United States. "If somebody bumps your lending costs by three basis points" — that is three hundredths of a percent — "it is a big deal. There is no price elasticity."

He continued: "We have a customer here in Chicago, a 50-year-old company, that just shut down. It had all of its eggs in one basket — 80 percent of its revenues came from an auto parts company that just liquidated. I have another customer with 280 to 290 drivers that had its first layoffs in 40 years. They laid off 20 drivers. One truck deal blew up when we discovered the guy was four months late on his mortgage payments. I have guys who buy 25 trucks a year from us who aren't buying anything this year. We sold 38 percent fewer units in 2008 than we did in 2007."

http://www.nytimes.com/2008/11/29/business/29nocera.html?ref=todayspaper">MORE

[SpiralHawk]

1. The putrid fruit of republiconomics

[bobd0]

2. Yep, Voodoo Economics 2000.1 nt

[msongs]

3. at least their fuel costs have gone down by more than half nt

[bobd0]

4. True for now but

I don't believe fuel costs are going to stay down for long. And diesel fuel, which was priced below regular gasoline for years, is now more expensive than premium.