Challenge: Balance profits, volume

The automobile business has been in trouble before in its century-long history. The industry understands crisis, and it knows how to respond.

This time, it's a global crisis, and the circumstances surrounding the Sept. 11 attacks are more tragic than those of previous crises.

September sales were bad - but not that bad.

Soon after Sept. 11, General Motors put into place an expensive marketing program. GM was followed by Ford Motor Co. and then, reluctantly, by Chrysler. The 0 percent financing deals certainly mitigated the damage to General Motors and Ford. It appears that Chrysler didn't respond quickly enough to save its sales.

Americans aren't very interested in purchasing anything these days. It takes big incentives to lure them into showrooms.

Those same consumers, though, can't resist a sale - and Big 3 vehicles are on sale. They probably will need to stay on sale for a while as the nation slowly returns to normal.

It will take months, particularly on the East Coast, and that's assuming that we don't hear anything else from terrorists in the near future. Our consumer confidence is shaky these days, and it doesn't need anything to shake it further.

But even in these terrible times, Americans still bought nearly 1.3 million cars and trucks last month. With all the uncertainty, we are still a nation on wheels. Nothing will change that.

The automobile industry must accept that rebates and incentives are now more than ever a part of the U.S. landscape. Besides, they work, and they appear to work well.

The nation can't have a healthy economy without a healthy auto industry. As long as people are interested in shopping for new cars and trucks, the economy will continue to plug along.

The retail business is different from the wholesale business. As manufacturers add more and more dollars to incentives to move the merchandise, dealers appear unscathed. In fact, with huge incentives on their inventory, it is possible for dealers to increase their grosses while the factories are bleeding bright red. There has to be a better balance between dealers and manufacturers in the future.

We need to keep the volume up these days, and incentives are going to be what it takes. Incentives are not going away any time soon, no matter how expensive they get.

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