Is Cash for Appliance Clunkers a PR Fiasco? (Appliance-Only Discussion)
Submitted by advisor on Sat, 09/12/2009 - 2:02pm.
Advisor Note: This second page is reserved for discussion about the subject of Cash for Appliance Clunkers.
Discussions further afield.....say for example on cannabilism, fluoridation of the drinking water, Acorn, or the general collapse of society... should visit the original page with this title, linked here.
Comments unrelated to Appliances or Cash for Clunkers will be deleted.
The news below is a copy of the original post.
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Cash for Appliance Clunkers is no longer a quiet conversation in a smoke filled room among fat appliance experts......such as us. Nope. Its on the AP, New York Times, USA Today, Wall Street Journal, every magazine, every media outlet, every 2-bit corn-pone broadcast station with 2 watts of transmission power. Following up right behind the automotive Cash for Clunkers, our little program has been launched to wild acclaim. Any PR expert would be thrilled. Who wouldn't be?
Just look at these Google News clips
Well there is one small problem. While consumers may be informed of the program, and anxious to buy through the program, there isn't any program, and it will be months until there is a program. Any consumer ready to make an appliance purchase has now been convinced to wait to partipate in a Cash for Clunkers program that won't start for 1 to 3 months. How's that for a smashing PR success?
Further, many of the news reports are wildly speculative about the appliance categories which will be covered and the amounts of the rebates, again further depressing current sales.
Who was the brainchild of this smashing PR fiasco? Who knows......but AHAM's July 14 press release probably didn't help:
"DOE Initiates Appliance Rebate Program to Asssist Consumers With Purchase of Efficient Appliances"
This is our analysis. What are you seeing in the field?
RELATED NEWS
Thor Appliances, a distributor of Asian made compact laundry is hitching a ride on the Cash for Appliance Clunkers media swirl, releasing a statement today throwing quite a bit of disinformation onto the Cash for Appliance Clunkers discussion.
The statement said:
1) “..........while Washington, D.C. decides if and when they’ll provide their own incentives.”
Advisor Correction: Actually, Washington has already budgeted the money, it is now up to the states to define their individual programs. Most, and likely all states will have programs.
2) "Additionally, the DOE has not announced which appliance categories will be covered or the dollar amounts of the rebates."
Advisor Note: Actually the DOE has already restricted the program to Energy Star qualified appliances, boilers, air conditioners, etc, and has indicated to each state the allotment they are qualified for (basically $1/per citizen). It is up to each state to choose the particular categories from this list and incentive levels to apply. The DOE is not involved in managing state programs nor announcing its criteria.
Official company press releases should be accurate......or are we asking too much?
... an they wonder why ...
... that Obama is described as a socialist ... in light of the fact that the government now owns GM, AIG, banks, financial institutions, etc., etc., etc. !!!
Cash for clunkers auto deal explained.....
Clunkers Program in Review
This particular email is so widespread, I'm leaning strongly to the possibility it's a hoax. At the very least, no one forced anyone to buy a car. Add in Mookie's point that no fed tax was due, and the assumptions on top of assumptions. Did the Ford Focus sell for $12,500 with the power package? Really? Seems low to me. Would someone buying a $12,500 car trade in a $3500 car to do it? I don't think that they would. More likely they would trade in a $750 car. Not convinced that this one represents reality but who knows?As for destroying the trade-ins, that was one of the goals, not really an accident, as it is also the goal of the appliance clunkers program
Clunkers Lunacy
Steady, good job pointing out some of the lunacy here. I looked into the tax question. The $4,500 is not viewed as income by the IRS, so it is not subject to Federal Income Tax. Most states did collect sales tax on the TOTAL amount of the car sold, not the amount after the incentive, so the $4,500 was subject to sales tax in most states. Most consumers certainly could have received as good or a better deal on their own. I bought a car last April and dealerships were falling all over themselves to give me a deal at that time. I can only imagine that is was even more of a buyers market this summer. The real lunacy comes in after the sale. The fact that all of these "clunkers" were destroyed. That is the unbelievable part to me. These cars had value. Lower income families need used cars. Salvage yards need parts. The dealerships had to administer all of this crap. I would bet a million dollars that the best deals during this time (or shortly after) were to the customer that did not have a clunker. Saving the dealership all of the hassle, administration, waiting for their money etc. It's just like paying cash at a doctors office, you always get a better deal.
Clunkers PR Fiasco Continues
http://www.13wham.com/news/local/story/Cash-for-Appliances-Talk-Hurting-Business-Some-Say/7lFRfWeuyUGbAXCoWMoNXA.cspx
http://www.13wham.com/content/blogs/story/Cash-For-Appliances-Strike-One/1HwKdBJn2EqpFeygJaYWzA.cspx
Cash for Clunkers: Disaster Report
Well, the dust has settle and the numbers are in. The Cash for Clunkers for the auto industry was, for the most part, a failure as far as the health of our American companies are concerned. When you look at these numbers it is difficult to imagine anything different happening to a similiar program for appliances. Of the top 20 vehicles sold (accounting for over half of the total number) import companies got 238,111 and the US companies got 118,544. Between Ford and Chevy there were 32,566 new full sized pickups added to our roads and 15,013 Toyota Prius. That should help the environment. (to be "fair and balanced" The clunkers averaged 15.8 mpg; the new vehicles averaged 24.9 mpg, so we did see a benefit there). We spent billions of taxpayer money and over 61% of the money went to foriegn corporations. Yes, the money did give work to some of our citizens, but the money is now gone and will likely never come back to the US because of the huge trade deficits. I will make a prediction that without a "buy American" clause we will have millions more of our taxpayer money going to LG, Haier, Samsung and others who are doing their best to take jobs from our American factories. PLEASE, tell me how this is a good thing for the long term health of our economy.........
Clunkers
I think most of the cars purchased were MADE in the US.
Yes, but ...
... the profits go back "home" to the manufacturer !!!
Disaster Report II
With so many foreign nameplates with domestic production, and so many domestic brands with foreign parts, foreign production and completely sourced finished goods it makes no sense to divide by US vs foreign brands. "Domestic Content" calculations are the only way to compare.
Triggering a "buy American" clause in a economic recovery program sounds wonderful. Wish we had it for automobiles AND appliances as we have said before. That said, such clauses may be more successful in melting down the global economy to a pile of meat paste before it has any positive effect on the industries we are trying to protect. Thems the stakes when doing full frontal protectionism.
Back alley protectionism such as 100% container inspection, spot safety testing, sludge-like bureaucracy, etc are a good way forward that might survive WTO smell test. The best way forward might be the application of a carbon taxes for all domestic energy usage, followed up with a significant tax on all imported goods based on the estimated energy required to produce and ship the product to our shores. (who knows if that's legal?)
Might also consider same for environmental, safety, and fair employment costs already paid by US firms and applied as a tax to imported goods not already burdened.
My 2 cents ... Thinking Out Loud ...
Having a lot of time on my hands (in recuperation), my initial impressions are as follows:
1. " ... finally, Obama is recognizing the constitutional principal of 'states rights' ..." but it seems more like he's giving the states the opportunity to shoulder all the criticism, thus deflecting it from himself and/or whomever came up with this rather awkward idea !!!
2. When they came up with the "Cash for Clunkers" for cars, they were bailing out American corporations and American workers ... now, no matter what you think of Unions, they were (by and large) Americans ... if we go thru with this, how long will it be before someone wakes up and realizes that only a modicum of American workers are benefiting since most production of appliances is over-seas ... Something's not adding up for me !!!
3. While the initial benefactors will be the Appliance Dealers, and that's wonderful, doesn't that also mean that the "big box stores" will benefit to a greater extent because they can offer pricing lower per unit and make the same due to higher walk-in volume that most Appliance Dealers can/could match ??? Last I looked @ the stock market, Home Depot, Lowes, & Best Buys were not necessarily hurting ... something just doesn't sound right !!!
4. What happens to extended warranty policies and/or service contracts ... do they stay the same as they are now ???
5. What about all those rebates that many Appliance Dealers depend on as a bargaining chip to level their local profile against the "big box stores" ???
Just one man thinking out loud ...
Clunkers: RockfordBusiness Story
A story in the RockfordBusiness.com (Illinois) with a completely different set of opinions of the Cash for Clunkers program.
Just another opinion until your state's program details are releases.
It's me again......
Wow! It was basically Steady and the Advisor with the comments sticking to the point then Steady went and derailed the thing by his off the cuff comments on the bungled and mismanaged and scary and whatever handling of the Cash for Clunkers. Anyway, I am going to add to my previous post regarding the issues I have with the "Cash for Appliances" deal. Here are some issues. I welcome any response anyone has or any reasurance that my fears are not justified.
1. The "cash for clunkers" was mismanage from the start. Add to that the questionable privacy violations that went along with it.
2. Almost every day I have customers asking about the program and most of those customers are pushing off their decision to make a purchase. The last couple of weeks have been rather slow after a few months of seeming back to normal.
3. If and when this does finally hit, and with the remote chance that it is managed properly by each state how are we to handle the mad rush of orders that may hit us?
4. What will we do "the morning after"? Obviously we can save up our money for that drought, but do we lay off our employees because there won't be any work?
5. Why don't we know anything yet?
6. Politically..................Oh, well.
The Program
Reply to your question
Steadyselling, all comments here, including yours are related to appliances. How well the program will run is certainly of interest.
1) I think we answered the privacy violations in the answers below. Each state can define its own program, and its management is in the hands of the state. As per the larger automobile program, there have been problems related to consumers who assumed they were qualified and weren't, and the feds being crushed by their success. The goal was to move the metal, and that goal was met. Would have been nice if they had built a website for instant approvals on the paperwork side.
2) This is bad, and what we expected after all the press. Could it be because of the health care debate? :-)
3) You'll manage. States such as ours are in discussions with retail associations. One hopes that retail groups in your state are consulting on the planning.
4) This program will move metal on the low end mostly. It will move product unrelated to the rebates since folks spend more when spending any. While obviously pulling in anyone already in the market, it will pull in folks who were never looking and wouldn't replace in this decade. People do like a deal, and this will be the most exciting deal of all.
5) October 15 is the due date for each state's final application. You will probably know the details then. Launch may still be weeks after that....or immediately. Each state decides.
6) Politically. What could a $300 million program buy? Maybe $1.2 billion in direct rebated purchases, maybe another $1.2 billion in unrebated purchases, maybe even another $1/2 billion in accessories, draining the warehouses, getting people in the mood to buy again. Priming the pumps.
Tough times require creative solutions to get the engine turning. Worry less about what happens if the engine starts and more about what happens if it doesn't
Cash for Clunkers Comments Copied Over
All comments from original page dedicated to the Cash for Clunkers program are copied here....about 7 out of 50 comments. Good Grief.
How do we get out voices heard
We have had several customers in the store asking about this. The worst part of it is that ultimately the consumers know as much as we do. How do we(the dealers) get our voices heard. I have written several emails asking them to limit this rebate to specific categories and to hopefully limit this to in state dealers only(excluding sears/lowes etc to ensure the tax dollars stay in state, although this is probably a pipe dream on my part). I'd love to see this apply to laundry,dishwashers and refrigeration only personally. That is where the most change can be made. It should only be for replacement sales because new construction would likely be putting in the more efficient goods anyway. It's the people who purchase $199 hotpoint dishwashers because "a dishwasher is a dishwasher" who need to see the effect. How that get's implemented effectively I have no idea.
Getting Your Voice Heard II
To get your voice heard.
1) Contact your state's department of energy directly. The name of your state's department of energy may not be obvious, but then that's why they invented Google.
2) Contact your Retail Association. For example, in Massachusetts, the Retailers Assocation of Massachusetts is directly involved with the state in developing the program.
Good Luck
PR Fiasco....
I have already had customers who were days away from making a decision on an entire kitchen package say they are going to wait, and this is in a state that may not even support the program at all. My feeling looking at this is it is a total disaster. A question I have is if the program will be the same nightmare as the clunkers program. It wasn't widely reported but dealers literally had to sign over all privacy rights of their entire computer system to the federal government. In order to work with the program they had to agree that their computer and ALL of it's files would become property of the federal government. Call me paranoid, but that is just wrong. What if some czar's buddy is in the appliance business and is a competitor of mine and they decided to check out all of our sales records, customer lists, ect.
Even Paranoids Have Enemies
Assuming that the Feds had computer access, there must be some ability for the Feds to track the money, and do their due diligence. It seems more reasonable and therefore more likely to be true that the Feds would be able to follow Clunker sales only, as opposed to ALL sales.
I'm not convinced that your claim is true.
If you have confirming information about your claim, add it here. The program was voluntary, so evidently whatever the problems, most dealers chose to participate.
For appliances, its a state program, and each state is responsible to follow the cash. Dealers can choose to play or not. There will be paperwork, but its not likely to be any more onerous than utility rebate programs.
Which state won't be following the program?
Scary proof....
The exact wording of the disclaimer is this: “When logged on to the CARS system, your computer is considered a Federal computer system and is the property of the U.S. Government. Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected, and disclosed to authorized CARS, Dot, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign.” Note "other agencies, both domestic and foriegn". After some people publicized it this disclaimer was removed, but does that mean they won't moniter these systems? It was part of the fine print that when you download the computer program and get to the point where you must click "I agree" this is what you were agreeing to. Feel free to google it - it is too strange to be true, but is true nevertheless. You are right, many dealers did participate, but I wonder how many knew what they were agreeing to. I don't often read those things when I download a new program on my computer. As far as states, I understand that so far only about 30 of the 50 states have signed up. There is still about six weeks to go, so maybe more will follow.
OK to be Paranoid
We Googled Steady's claim. The claim was true.....and a bit shocking. Our apologies to Steady for doubting.
About.com said the following:
According to the Electronic Frontier Foundation, a watchdog group focusing on free speech and privacy issues on the Internet, the terms of service language was not only "careless" and "overreaching" but also legally unenforceable and technically dubious:
The wording has since changed to normal fed-speak, and all is right with the world. Was it an actual grab, or a bad cut and paste from another document? Who knows, but in terms of the major appliances clunker program, this language is unlikely to re-appear.
Full State Participation
US DOE announced to the various state agencies that all 56 qualified states and territories have filed their initial applications for appliance rebate money.
We are waiting for direct comfirmation of this fact from US DOE.