Recessions, which admittedly suck, do tend to have a cleansing effect. They flush out lots of bad business thinking as desperation sets in and no-brainer ideas that could get no traction before suddenly seem brilliant. An example...
"General Motors Co and eBay Inc (EBAY.O) said Monday that they launched a test program in California that will allow consumers to negotiate with dealers and buy vehicles online.
The car shopping website -- gm.ebay.com -- marks a departure from the way new vehicles have been traditionally sold in the United States and is aimed at helping GM gain ground with consumers a month after it emerged from bankruptcy."
This is not a new idea. eBay has been approaching auto manufacturers with this for years. The auto companies have toyed with, and killed, various proprietary attempts to do so. Channel conflict being the most used excuse but, really, it's just that they were big, arrogant, and as a result, stupid. So, finally, the auto industry is meandering towards the 21st century by taking advantage of technology to make it easier for consumers to purchase from them. That's part of this that is so welcome...GM is going to allow people who wish to hand it money to do so with greater ease. Makes sense they were so opposed to the idea.
My understanding is that it is really just window dressing. Dealers still are a powerful interest group and anytime you buy a car it has to pass through a dealer, as it is illegal in every state - and as far as I have heard will remain so - to purchase directly from the manufacturer, as we have the option to do with airline tickets, computers, etc.
Posted by: Doug | August 10, 2009 at 11:23 AM
That said, I agree with your hypothesis, although the converse is also true: bad ideas that seem brilliant when people are flush with cash are also exposed as the frauds they are when times get tough. (Madoff, Lehman Bros., Bear Stearns, Enron ...)
Posted by: Doug | August 10, 2009 at 11:29 AM