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Recession Drives Speeding Tix, "Escort" Business The recession and economic woes of the automakers has created a lot of discounting of new cars and trucks for those who are in the market for new wheels. That’s the good news. The bad news is that no matter what you are driving, law enforcement is handing out more parking and speeding tickets than ever to make up for everything from lower tax revenues to cuts in state aid.That’s where Escort Inc. comes in. The leading maker of navigation systems and “fuzz-busters” is doing brisk business in the teeth of an economic meltdown. “It used to be that people were buying our products so they knew when they could speed up, but today the motivation is different—to know when to slow down,” says CEO John Larson.It’s no joke. In hard-hit metropolitan Detroit, the number of moving violations issued has increased by at least 50% in 18 communities since 2002—and 11 of those municipalities have seen ticketing increases of 90% or more. State and city officials are pretty open about the strategy, since the state has cut billions of aid to communities in that time. You can’t get blood from a stone (the State of Michigan), but you can get it from Mustang and Camaro owners.Escort’s newest products integrates global positioning and even navigation applications with traditional fuzz busting tech to alert drivers to where the speedtraps are, as well as where red-light cameras are installed. The company has its own proprietary database of the top-known speed traps based on tickets written.The new tech also eliminates false beeping from things like garage door openers and the like. Larson says that he might hear 50-60 alerts on a typical drive from Cincinnati to Northern Michigan. With the GPS assisted devices, it’s more like four and they are all legitimate. “There is a big safety aspect to this because if you radar detector is always going off, on top of cellphone distractions, it gets to be overload.”As Escort’s products are after-market, and there are so many gadgets hitting the market, and only so much space on a dashboard, Larson says a device that incorporates fuzz busting, navigation, blue-tooth and hands free telephony is around the corner. rss.businessweek.com |
Marchionne speaks: Chrysler's financial woes are overblown. Contrary to popular view, Chrysler isn’t flat broke. That was the first thing Fiat CEO Sergio Marchionne said when kicking off a six-hour presentation that seeks to convince the world that the Italians have a plan to bring Chrysler back from the brink. The company has $5.7 billion in cash and has actually grown its cash hoard by $1.7 billion since exiting from bankruptcy in June, Marchionne said. And get this. Chrysler made $200 million in profit since emerging from bankruptcy in June. Well, let’s qualify that. The company made $200 million in EBITDA, which is earnings before interest, taxes, depreciation and amortization. That is to say, they made money before counting a lot of things that cost the company money. So Chrysler still lost money since June. But Marchionne did say that Chrysler broke even in September. One month’s profit is practically meaningless in the car business. Put off some major spending on a future vehicle program for a month and you can make any month look good. Marchionne said Chrysler did it by being very parsimonious. His point is that Chrysler’s financial position is not as hopeless as many outsiders think. Given the debt reduction and cost cuts made during bankruptcy, Chrysler’s financial position is probably not as dire as everyone thinks. But its sales are. Chrysler sales are off 39% this year. The company said it has a slew of new models coming from its joint engineering projects with controlling partner Fiat, but stopping that drop off in sales will be very difficult. If it gets worse, Marchionne will have to slash deeper for Chrysler to make it. rss.businessweek.com |