My good friend Jim Johnson spoke to our club today about the current status of the automobile industry in this country. I had asked Jim to speak on the same subject 20 years ago when I was president of the Auburn club. So many of the things Jim talked about then have since prophetically come true. Jim and I were next door neighbors for a number of years and is still a dear friend. My daughter Molly babysat his grandchildren when they were much younger.Jim surmises that GM is now Government Motors. Until recently Jim had the local Pontiac Dealership. While he is still in the car business he has the Nissan and Hyundai lines. He spoke optimistically about the future of our country and of the automobile business. He conjectured that GM will survive as a leaner tougher business. He thinks Saturn will have to be jettisoned probably to a foreign auto company that needs a ready made distribution system. He believes Cadillac and Chevrolet will remain with support for Buick, Pontiac, and GMAC as well. It is Jim's guess and hope that Corvette will remain here in BG as a viable product line for GM. It is obvious to everyone in BG that Corvette is important to our community.
Jim thinks that all of the major dealerships in Bowling Green are well enough established and strong enough to survive. He thinks if there are changes that it will be at the owner's discretion. Jim talked about having the opportunity to buy and resurrect a Buick, Pontiac, GMAC dealership in Tennessee. After he looked at it he realized that with his experience the dealership could be turned around and be profitable in 8 or 10 years. This would have meant keeping 50 people at work and the opportunity to continue to send tax revenues to the local, state and federal governments. Then he figured that he would be in his late 70's in 10 years without taking any profit from that dealership in that length of time. When it went into his estate half of it would be taken by the Federal Government in estate taxes. This would essentially leave nothing or little to show for his years of risk and oversight. With that realization he dropped the idea. The disincentive of that government policy cost 50 people their jobs, a community an important business and governments a steady stream of revenue. Jim went on to explain that not every taxing scheme ultimately nets additional revenues for government.
Jim said auto dealerships can survive and work their way around market issues. He said farmers don't expect to make a profit every year but take a broader view of their business plan and expect to make a good living over time. Jim said that when you factor in direct government management of businesses you take market factors out of the equation and no one can actually know how they will turn out. Jim guessed that from 2007 - 2012 a third of all automobile dealerships will go out of business. Jim said just think what it would be like to lose a third of any productive segment of society.
Thank you Jim for your insight and remarks. Thank you program chair Ryan Smith for inviting him.
