The Pandemic Depression Is Over. The Pandemic Recession Has Just Begun.

The Pandemic Depression Is Over. The Pandemic Recession Has Just Begun.

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At Jetco Delivery, a 400-employee trucking and logistics company in Houston, business has mostly recovered since the spring shutdown, with employment down only slightly, said Jetco’s chief executive, Brian Fielkow. To avoid losing good drivers, the company ran some routes at break-even prices, choosing to sacrifice profitability to avoid the difficulty of rehiring when conditions improve.

But investing in new trucks is a different matter.

“Our focus was to retain the best of the best drivers,” Mr. Fielkow said. “But one thing that hasn’t recovered is new truck orders. I think people are being appropriately conservative now with capital. What if the vaccine takes another year? There are too many what-ifs. You can’t gamble.”

When the pandemic hit in the spring, sales of cars and trucks collapsed. Many auto dealers had to close entirely because of public health directives, and those that remained open saw paltry traffic. The good news for the sector is that over the summer, car and truck sales surged.

But despite the recovery, employment at automobile dealerships in September was 7 percent below pre-pandemic levels.

The reason: The pandemic squeezed years of change into a few months in how cars are sold, making for a less labor-intensive process that requires a smaller sales staff, said Rhett Ricart, the chief executive of Ricart Automotive Group in the Columbus area in Ohio, which includes Ford and other dealerships.

For years, car buyers have been shifting toward doing their research online and coming to the dealership only for a test drive. Prolonged haggling over price has given way to a crisp negotiation through emails, and customers can generally apply for loans or get estimates of the value of a trade-in online.

“The pandemic accelerated everything,” said Mr. Ricart, who is also chairman of the National Automobile Dealers Association. “It has been a whole dramatic change in our total ecosystem here, as customers have been more motivated to go online.”

Hafta Ichi
Source: The NY Times
Keyword: The Pandemic Depression Is Over. The Pandemic Recession Has Just Begun.

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