Make Detroit Great Again
Have you ever asked yourself why you drive the vehicle you do? Does it reflect your personality? Is it a family vehicle? Is it for work? Is it fast? Can you fit four sets of golf clubs in the trunk? Did you buy it to support your community?
What’s that? Yes, buying a car can in fact help support your community!
As a Michigander, I was only given three options - Chrysler, GM, or Ford. You would get a sideways look along with a ‘sayyyyy whaaaaat?’ if you drove anything else. Maybe times have changed in the Motor City since my formative years, however the once Big-Three still represent the majority of vehicles on the road in Michigan today even though that percentage may be slipping. The idea behind purchasing one of these vehicles was simple. Every Big-Three vehicle purchase directly supported friends & family working in the automotive industry and/or the various businesses serving Metro Detroit. The epitome of community.
Who wouldn’t want to support their community? For me it was much more than that. It was my family. My Grandmother worked for Chrysler back in the day, my Uncle spent his entire career with General Motors, and another Uncle recently retired as a senior engineer from Ford. Not to mention, my Dad bought scrap metal and industrial machinery from all three automakers. Shoot, GM’s scrap put me through college! So what did I do? I bought a Pontiac in my sophomore year at Ferris State University.
After college I moved to Vancouver and I was amazed to see the lack of domestic vehicles on the road. It seemed like Detroit had been replaced by Tokyo (Honda, Toyota, and Nissan). Was this due to the tree-huggers on the coast or had a shift in consumer demand occurred that I hadn’t noticed? When it came time to replace ‘Ol Betsy’ as I affectionately named my Pontiac Sunbird, I considered what Smart Car & Toyota had to offer but was ultimately drawn back to my Detroit state of mind and opted for a Ford. There’s a saying in Detroit. You can take the boy out the D, but you can’t take the D out the boy.
Thirteen years and a 140,000 miles later my Ford Lightning is still in great shape and I could probably squeak out another 5 years. Unfortunately a 400 horsepower, two-seater, pickup truck isn’t exactly a family friendly vehicle. So now what? I’m at the point in my life that I can afford to upgrade to a luxury vehicle. I really, really, really wanted a Range Rover Sport. By far the coolest looking SUV out there. Hands down. Despite how cool this thing looks, I’ve been told by numerous people to stay away due to the laundry list of maintenance issues that I’d be faced with the minute I drive it off the lot. I then contemplated the BMW X5, and even considered the Audi Q7. While all of these are beautifully-designed, well-engineered vehicles, something just wasn’t sitting right with me.
That something was staring me right in the face. I had become pretentious. Yep, this scrap yard dude turned into a hoity toity country clubber. Why in the world would anyone spend over $100,000 on a vehicle? Who was I trying to impress? How vain am I? Is there something in our DNA that pushes us into buying progressively more expensive vehicles as we get older? Is this a sign of prosperity? I try to tell my wife that my belly would have been considered a sign of prosperity back in the 1600’s. While I can justify the investment in my ‘dad bod’, (special thanks to DQ) I certainly can’t do the same for an over-priced depreciating asset. After my epiphany we decided to stick with the Ford family of vehicles and buy an Explorer Sport.
Okay, sorry about the long winded story but I had to give you a bit of a background. Oh, a couple more things. 1. The Ford family has owned the Detroit Lions since the 1960’s so that means you’re automatically a Lions fan if you drive a Ford. 2. If you enjoy pizza (really who doesn’t?) and have ever indulged in Little Caesars, every penny you spend on ‘pizza pizza’ directly benefits the Tigers & Redwings. Rest in peace Mr. Ilitch. Needless to say, I’ve enjoyed several Little Caesars pizza’s at the Joe!
So the point. Right. Get to the point Rudover. The point I’m trying to get to is two fold. One, is that luxury vehicles are a complete waste of money and anyone that has the means to buy a vehicle over $80,000 surely has enough discretionary income to pay into the luxury vehicle tax. And two, our desire to find fuel efficient vehicles in Japan may have had more adverse effects on our economy than we may have thought. Now I would like to demonstrate how these two statements can stimulate the economies of both Canada and the United States.
Let’s tackle the first point. Luxury vehicles have become dreams for most of us from early childhood. I dreamed of owning a yellow Lamborghini. Why? Two words. Wing doors! Now that I’m 40 I question what I could have possibly done with a $500,000 Lamborghini. Running errands on a Sunday? Good luck loading groceries in the trunk! What about schlepping the kids to soccer? Those might be inappropriate requests of a sports car but realistically why is anyone buying a Lamborghini? I usually get the response, ‘well if you have millions why not?’ Sure, you’ve earned oodles of cash and you deserve to buy anything your heart desires. I get that. Why not a Heesen 47 while you’re at it? So that’s like $20 million for the boat and a measly $500,000 on the car. Great.
That might sound a bit ostentatious but this actually happens. I used to spend summers in college working at the yacht club up the street from my Mom’s house in Grosse Pointe. Millions of dollars sitting on the water & in the parking lot. These are some of the most successful and influential people in the area and this is how they choose to spend their money. Now I’m sure some, if not all of these members engage in some form of philanthropy so I can’t really blame them for their inefficient transportation choices. What I can do is raise the question of why they drive an import, luxury vehicle when they live a stone's throw away from the Fiat-Chrysler assembly plant on Jefferson. Why do they find it necessary to drive a Rolls Royce, Bentley, or a Lamborghini when for all practical measures a Lincoln or a Cadillac would achieve the same result…..okay maybe a touch slower than the Lambo but you get the idea.
I liken this to the craps table. I typically gamble with a few hundred bucks and hope to make enough to buy a new pair of shoes….so the saying goes. My cousin on the other hand gambles with a few more zeros. We could probably graph our heart rates and I’m sure I’m hitting 100 bpm when my earnings are at $500 while he might not hit 100 bpm until his earnings are multiplied by that heart rate. So I guess in a way, I’m the Lincoln and he’s the Lamborghini. So to speak. My cousin at least isn’t a big enough schmuck to drive one though.
Ego and inferiority complexes are really at the center of this argument I’ve embarked upon. Ego pushes the bonus driven individual to buy one of these vehicles. Think of Bill Lumbergh from Office Space. He’s the boss at Initech with the reserved parking spot for his Porsche. He clearly deserves the finest sports car money can buy because he keeps the company afloat with his stunning TPS reports. I’m sure we can all relate to this. The breadwinners get the cool cars. That’s life. I wonder if Lumbergh had a philanthropic side to him? Maybe he donated his time to young entrepreneurs teaching them how to write TPS reports. With cover sheets of course! Now that would be something. Instead of blowing that six-figure bonus on another Porsche, maybe host a luncheon for highschool students and offer them career advice? Maybe even a paid internship out of your own pocket? These are just ideas. Maybe donate part of your bonus to the employee of the month? Again just ideas. Surely a Maserati provides much more satisfaction than helping the youth in your community.
Then you have those that need to stand out because they believe a high-end vehicle will bring them the recognition lacking in their personal and professional life. They want to roll up to the office showing off their new whip to their co-workers hoping that somehow they’ll see them in a different light. They’ll see them as a highly successful business person that deserves respect. Well, guess what? They don’t. And as a matter of fact this move may actually render less respect from their contemporaries. They see them driving a vehicle worth three times the value of theirs. So not only is their compensation higher but they’re throwing it back in their face. Now that’s leadership!
Don’t take this the wrong way. This isn’t about shaming anyone for buying a luxury vehicle, this is actually encouraging them to do so. Contradiction? I think not. What I’m proposing here will benefit those content driving a Big-Three vehicle under $80,000 (this number will adjust with inflation as years go by and the feds continue to print more money). Have you heard of a luxury tax on vehicles? If not, it’s similar to the Major League Baseball luxury tax. The Clinton administration introduced such a beast in the 90’s however that only lasted a few years. I’m not exactly sure where the tax money ended up going but likely somewhere along the lines of general revenue which can be used for a multitude of expenditures. BC has a luxury tax on vehicles over $55,000 in the form of Provincial Sales Tax (PST). Again, I’m guessing this goes into general revenue used for all sorts of different things.
If I were President, here’s what I would do. Shoot. I inhaled. If I were an advisor to the President this is what I would propose. Re-introduce this tax immediately and amend existing Provincial & State tax plans to align with the following. 10% luxury tax on all domestic vehicles over $80,000. And that applies to the full amount, not just the portion above the $80,000 mark. 25% luxury tax on all foreign vehicles over $80,000. This tax money now needs to be controlled and not just dumped into general revenue because this revenue will act as a subsidy for those purchasing domestic vehicles under the $80,000 threshold.
The objective here is to stimulate the North American economy - Make Detroit Great Again! Apologies for the distasteful reference given the Trump debacle however the statement speaks well for this document. The subsidy is required to offset increased COGS when the Big-Three are back to manufacturing & assembling cars entirely in the Metro Detroit Area as this will likely raise the MSRP due to the stranglehold the UAW has over the automakers. This subsidy would then be subject to the financial needs of the purchaser similar to that of a scholarship criteria. The purchaser would need to provide income details (W2 or T4) to the finance department of the dealership to determine the maximum subsidy allowable. Those with greater financial need would receive a larger subsidy than those in a higher tax bracket. Should the subsidy pool run a surplus some of these funds will be allocated to public transit. I can’t provide too many details at this point but this is the conceptual framework I’m running with.
The second point of this article is about our search for fuel efficient, dependable vehicles from Japan. It’s common knowledge that while the Big Three & their UAW brothers were living it up in the 80’s they became arrogant and literally took their foot off the accelerator. They were pushing out poor-quality, horribly-inefficient vehicles while Japanese automakers were building cars that would never die. Two polarized business models. This is all outlined in Michael Moore’s masterpiece Roger & Me. General Motors was the largest corporation on the planet at the time and it could not fail. I actually remember my 7th grade class on investing. Our teacher, Mr. Pekaski wanted to teach us about the stock market. The idea was to choose 8-10 stocks that we would follow for the rest of the semester. He went onto explain what a blue chip stock was. Guess what corporations were considered blue chip stocks back in 1989? You got it. All of the Big Three!
Why would these companies want to build a better mousetrap when they were earning record profits and essentially printing money? This is the definition of complacency. I’m not going to defend them for a minute. These auto execs were so egotistical that they signed anything the UAW put in front of them. I had friends dropout of high school to work on the assembly line for like $50/hour. Seriously! It was crazy, everyone had a boat, a cottage, and a few dirt bikes just because. In the haze of smoke & mirrors, no one saw it coming.
Fast forward to today and the Big-Three ain’t so big! Toyota is number one and Tesla is not far behind. Tesla has more pre-sold inventory than the Big-Three combined! Now the likes of Dyson are jumping in too. It’s crazy to think that while I was picking those blue chip stocks back in the 7th grade, GM was in possession of technology that may have changed the world as we know it. Let me introduce you to the EV1 if you haven’t yet heard of it. This was the Tesla before Tesla. While they were all eventually crushed and shredded due to some big-oil shadiness, times have changed and GM once again has an opportunity to be the leader in the electric vehicle market.
While I’m a huge advocate for electric vehicles we need to understand the ramifications should we pull the proverbial plug on combustion engines altogether. Our world will be turned upside down! So just chill out for a minute and think about it. Sure, global warming is a major problem and these vehicles are likely the cause (or at least a contributing component). Therefore switching everything to electric would drastically slow climate change. I can’t argue that. All I’m saying is that our lives are so intertwined with oil and the related industries that our world economy would likely crash. We’re in a Catch 22 type of situation. We want to save the planet but we don’t want to kill it at the same time. So all we can do is gradually chip away at reducing the amount of fossil fuel burning vehicles on the road ever so slightly. Kind of how Tesla has been selling their vehicles. So if we can once again trust that the Big-Three will make higher quality vehicles this plan might actually work.
To recap the points here. Keep buying those import, luxury vehicles so you can help your neighbors buy a Ford and find jobs at one of the Big-Three automakers. Trust that the auto industry will do their part to slowly wean us off of fossil fuel. Keep driving a Ford and eating Little Caesars pizza so you can cheer for the Red Wings, Tigers, and Lions!