Monday, December 22, 2008

Big 3 Tax Credits

As a veteran business leader I am fully aware that changing economic conditions will have an impact on business operations, some good and some bad. In bad times you won’t see me in front of Congress asking for a bailout; like the majority of American business we here at Video Professor are on our own.

As a businessman, a taxpayer, and especially as a consumer I find myself thinking about what government might do to ensure the future of the American automobile industry. Since Henry Ford’s first Model “T” rolled off the revolutionary assembly line, the auto industry has been the cornerstone of our manufacturing sector and the foundation of our economy.

Americans make things. We’re good at it and the world knows this.

GM, Ford, and Chrysler are in a huge financial hole. They helped dig that hole but the major impact is the result of the housing crash. The Big 3 went from having some chance of success to having no chance at all. Of course, assistance from the government must be packaged with fundamental change in all areas of operation. And in the US auto industry there is plenty that needs fixing, in both areas of management and labor.

OK, let’s talk solutions. Now that the band-aid has been put on the big 3 here’s an idea. Why not offer a $10,000 tax credit to any US taxpayer who buys a GM, Ford, or Chrysler by April 15th, 2009? Also offer a zero interest loan and just watch the cars sell.

Right now, generating cash and reducing inventory are most critical to the success of the Big 3. But this can’t happen until the American people start buying cars again, now!

When the leaders of the Big 3 appeared before Congress, not one of them was asked, “How can we help you sell more cars?” It was a missed opportunity.

This bailout, loan, or whatever our government wants to call it, should include some taxpayer benefit. Simply put, the government offers a tax credit to American taxpayers who buy American made automobiles. Without stimulating the market, government is dreaming while asleep at the switch.

A tax credit ensures that all benefit – manufacturers and their employees, suppliers, dealers and their employees, and oh yes, the American taxpayers too. This will get the economic blood flowing again. The increase in sales will create a renewed revenue stream for the automakers, which in turn will reduce the amount of taxpayer money needed from the government. Taxpayers who buy cars benefit when they file their returns April 15th.

This is not rocket science. It’s common sense.

“Simply the best computer learning available – guaranteed.”

But you have to have an incentive for customers to visit showrooms. What’s wrong with a tax break for the folks who drive cars along Main Street, USA? So far, the only people not getting a break are the people paying for everyone else to get a break. That will break us all!

People aren’t buying Big 3 brands due to lack of quality. They make great cars and they can produce even better ones. One of my own cars is a Chevy Tahoe. It is a GREAT vehicle. The housing mess (don’t get me started on that) is the root cause of this particular “evil”. But when the warehouse is stuffed, there is no point in producing more inventories.

A tax credit to reduce inventory and generate cash flow is as good an idea as any I have heard. It’s a start. Why not try it?

The idea of government now getting involved in free enterprise is the last thing any of us should want. But the current situation is what it is. Tax credit for the folks, who one way or the other will pay for it all anyway, seems only fair.

The government keeps saying they want to help the taxpayers but they still haven’t done that as of yet. Wake up and step up Federal Government! Get the cars moving and get taxpayers the break you keep promising!


John W. Scherer
CEO & Founder
Video Professor, Inc.
12055 W. 2nd Place
Lakewood CO 80228
303-232-1244 Ext 386