These are dark times for many
American manufacturers. So dark, it’s hard to know where to begin describing
the gloom. But one of the root causes of the current trouble is clearly the
price of that commodity we took for granted not so long ago: gas. At $5.00 a
gallon – I’ve paid that price – it’s having a horrendous effect on car sales.
In case you haven’t looked, here are the numbers:
Total composite auto sales for
June were down 18.3 percent in comparison to last year. More specifically, GM’s
sales were down 18.2 percent, Ford’s were down 27.8 percent and Chrysler’s were
down an astonishing 35.9 percent. If you’re a supplier to the Detroit 3, these
numbers hurt. In terms of absolute volume, they are the lowest sales figures
The price of gasoline’s main
component, oil, remains in the stratosphere at somewhere around $140 per
barrel. It’s not going to go down any time soon, even with the hopeful developments
in Iraq, where it is hoped that oil production will gradually rise. This means
that the cost of everything that has a petroleum component, or gets transported
from point A to point B, is going to continue going up. USA Today reports that the Institute for Supply Management’s price
index on raw materials moved up from 87 in May to 91.5 in June.
Oh, and the stock market isn’t
exactly doing very well this year. It’s down 14.2 percent. We won’t even get
into the sub-prime mortgage mess, which is hurting consumer confidence while
draining spending power.
But there is a bright spot today.
The Rhode Island Supreme Court has overturned a verdict against three paint
manufacturers that would have compelled them to spend billions of dollars to
fund lead paint clean-up activities.
Charles H. Moellenberg Jr.,
Sherwin-Williams’ lawyer, called it “a landmark victory for common
sense,” and I couldn’t agree more.
It’s not only a question of
determining which company’s paint was used on which home or apartment building –
common sense tells us that would be impossible. There’s also the fact that
nobody knew lead paint was a serious health problem when the structures in
question were painted. It’s really unfair to blame people for manufacturing a
dangerous product when they didn’t know it was dangerous.
Am I saying that there are no bad
guys in the manufacturing industry? Of course not. But product liability
lawyers don’t always go after bad guys. They go after whomever they can go
after. And while product liability suits are a “problem” for huge
corporations, they are a catastrophe for smaller businesses. So, in the adjudication
of these matters, we could use a measure of common sense.
We got it. And that’s the bright
spot for the day.