Sunday, August 16, 2009

Y2K and C4C

Can you believe it's been ten years since Y2K? Do you remember the flurry of activity getting ready for it? Ten years ago I was busy making sure clients' windows boxes and servers had the latest OS patches in anticipation of the big day; I was helping clients make sure their software systems were ready for a smooth transition. There was a bunch of IT spending, on hardware upgrades, software upgrades, reprogramming systems (COBOL For Dummies?!). Then Y2K came and went. And the flurry of activity came to a halt. It's as if everybody was now (temporarily, at least) on the same sales cycle. So very few people were interested upgrading anything through 2000 and on. IT spending slowed down, and so on.

People buy automobiles at different rates: some turn them in every two years, some run them until the wheels fall off. There are different sales cycles. The government wanted to encourage consumers to start purchasing new automobiles, so they devised the so-called "Cash For Clunkers" program. The program has proved wildly (perhaps unexpectedly) popular, and now politicians are trying to figure out how to meet demand. One of the things the program is doing, I think, is upsetting the normal automotive sales cycle. If someone was halfway through running the wheels off their car, they might go ahead and buy one now, instead of in three or four years, when they were "scheduled" to.

The concern is what happens when the program ends. Everybody who was going to be in the market for a new vehicle now already has one. I'll not be surprised to see the flurry of activity to come to a screeching halt. How much do you think that bailout is going to cost?

1 comment:

Seth said...

Good point. I'll add that to my list of why Cash for Clunkers was a stupid idea.