Recession or depression?… “I’d rather not”

January 13, 2009

Here’s a blog post by my colleague Nick Carey.

This year’s roundtable event for the Society of Automotive Analysts (SAA) — held on the sidelines of the Detroit auto show — was always likely to be a somber affair, what with the U.S. economy in recession and auto sales falling off a cliff.
 
But even though the outlook for the sector this year is grim, analysts and other attendees in the half-empty room managed a few gallows-humor laughs.
 
“I see we have a few empty pews here,” Finbarr O’Neill, president of automotive forecasting firm J.D. Power and Associates (left), said to a few chuckles.
 
Many analysts have moved on since last year’s show, either because the firms or banks they worked for have gone belly up, or because their employers no longer feel the need to cover the U.S. automakers when their stocks have performed so poorly.
 
Even though the SAA rented a much smaller conference room at the Renaissance Center in downtown Detroit — also home to the headquarters of General Motors — than for last year’s event, there were nonetheless quite a few vacant chairs.
 
O’Neill proceeded to tell a joke about an Irish bank robbery — prefaced with the fact that he is himself of Irish heritage — and explained to the audience that the reason he was telling it was that they would need to keep laughing despite the awful auto sales outlook that he delivered. J.D. Power expects that U.S. auto sales in 2009 will be the worst since 1982.
 
“Let’s maintain our sense of humor folks. We’re going to need it.”   
 
But much of the laughter was at unintentional gaffes.
 
In the introduction for Paul Taylor, chief economist at the National Automobile Dealers Association (NADA), one of the hosts said the NADA had 2,200 members before correcting that figure to 22,000. Chuckles greeted the mistake, because the NADA is losing members at quite a pace.
 
The NADA says there were 700 fewer U.S. car dealers at the end of 2008 than at the beginning and expects there to be 900 fewer dealers still by the end of 2009.
 
But one of the biggest laughs was reserved for a comment from Ford’s senior economist Emily Kolinski Morris (right) in a Q&A session after she and Taylor spoke.
 
A member of the audience asked whether Kolinski Morris and Taylor would described the current U.S. downturn as a recession or a depression.
 
Kolinski Morris paused, for just a moment.
 
“I’d rather not,” she said, to widespread laughter from the audience. 

(Photos/J.D. Power and Ford)

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