J. Neiland Pennington Headshot

From the
Senior Editor


he procession of gloom is endless. Every day, the television news and newspaper front pages report heart-wrenching stories of people out of work, of staggering unemployment statistics. The pandemic-fed fall in the economy has affected people that are seemingly immune to hard times. Not unnoticed are the bizarre images of families queueing up for free food boxes in their Mercedes-Benz or BMW SUVs.

And yet, there is the sense that a turnaround is in the offing. Current national unemployment is in the 10-percent range, a considerable improvement from just a month ago. Congress is wrestling over another financial stimulus, with some factions claiming that more stimulus money is a disincentive to work. But recent studies by both Yale University and the University of Chicago have shown that this is not the case, and people receiving stimulus payments are still in the job market. Americans, by and large, are spending on basics and necessities, delaying discretionary purchases and accumulating cash.

Our cover feature this month details the building of Chevrolet’s halo car, the Corvette. It’s an engineering tour de force, but an eminently deferrable indulgence in a time of tight money. The ‘Vette is a tiny niche market compared to the domestic auto industry overall. But automobiles are still a bellwether for a nation’s economic health, and at least one industry executive predicts better times ahead.

Granted, the industry was sent reeling by COVID-19. Assembly lines were shut down, and it seemed that halts in production matched the lack of demand for vehicles. Using General Motors as an example, retail sales were off by about 24 percent in the quarter, roughly in line with the industry. Retail sales in April were down the most in the quarter, off by about 35 percent compared to last year, but recovered significantly in May and June with year-over-year declines of around 20 percent or less.

Fiat Chrysler Automobiles shipped 225,000 vehicles to North American customers during the second quarter, down by over 39 percent from the same 2019 period. FCA CEO Mike Manly stated, however, that “our plants are up and running, dealers are selling in showrooms and online, and we have the flexibility and financial strength to push ahead with our plans.”

GM is also optimistic. “Clearly, the second quarter was a challenge, but we achieved near breakeven [pre-tax earnings] in North America, despite losing eight of 13 weeks of production,” CFO Dhivya Suryadevara stated at the end of July. “These results illustrate the resiliency and earnings power of the business as we make the critical investments necessary for our future.” Mr. Suryadevara is looking forward, and so am I.

Image of Facebook icon
Tell us what you think! Post Your comments on our Facebook page! FFJournal.net/facebook