AutoNation CEO Freezes Pay, Voices Concern Over Economy
“We have a fragile recovery that’s under way, which means if you introduce anything into it that’s disruptive, it’s going to knock it off its pace,” Jackson, 62, said last week, according to Bloomberg’s latest report for the transportation industry.
We’ve seen all manner of sales increases from premium automakers like BMW and Mercedes Benz in the US last month, but a recent report from Autodata Corp. said last week that light vehicle sales only managed a 1 percent increase for the month of July.
AutoNation’s situation is telling for the sort of conundrum the US economy faces, as the biggest problem other than the debt is the Unemployment rate that still sits at over 9 percent. Consumption has picked up a bit, but both consumers and companies are waiting for the other to put their backing into the economy.
“You’re seeing wage gains, you’re seeing job growth, but it’s all very muted simply because there’s not a lot of demand out there. Businesses can hire if there’s more demand, but there can’t be more demand unless businesses hire,” said John Canally, an economist and investment strategist at Boston-based LPL Financial. It’s a bit of a Catch-22, isn’t it!
The CEO’s statement highlights his company’s ‘worse case scenario’ plan, as Jackson said that with new-car demand still at a “depression level,” the company has to stay prepared in case things “get ugly again.”