| ORLANDO, Florida
ORLANDO, Florida Feb 8 The U.S. auto industry
and the nation's economy face a reckoning despite recent gains
in economic growth and vehicle sales, both fueled by stimulus
programs, the head of the largest U.S. auto dealer group said on
However, Mike Jackson, chief executive of AutoNation Inc
, said auto sales will not suffer in the next few years as
that reckoning is at least a decade away.
"There is a day of reckoning coming for the U.S. economy and
for America," he said at a J.D. Power & Associates conference
ahead of this weekend's National Automobile Dealers Association
Jackson said those who would dismiss his gloominess need
only recall he made similar dire warnings from 2004 to 2007
before the U.S. auto market slid to 28-year low in 2009. At the
time, Jackson warned that automakers must stop producing too
many cars and piling on generous consumer incentives in order to
U.S. sales of 10.4 million in 2009 came after more than 10
years of sales that had averaged nearly 17 million.
Since 2009, U.S. auto sales have risen each year, to reach
14.5 million last year, and most forecasters say they will reach
between 15 million and 15.5 million in 2013.
Jackson said the federal monetary policies of low interest
rates and sharp increases in the balance sheet of the U.S.
Federal Reserve are two major stimulus efforts that may come
back to haunt American consumers.
Recent economic growth has been around 2 percent annually,
"It's only 2 percent with this unbelievable artificial
support that's not sustainable," said Jackson. "So we have a
long way to go with this economy."
Jackson said the U.S. government has to make difficult moves
to cut spending for Social Security programs in the coming
years. But he's not convinced that Washington will have the
political will to make the necessary moves.
Lacey Plache, chief economist for Edmunds.com, agreed with
Jackson's assessment, but like Jackson said it was difficult to
peg the timing of the hit to the U.S. economy.
"The wealth effect is leading consumers to a sense of
over-confidence because they see the stock market going up,"
Plache said in an interview at the conference.
That stock market would not be as high if it were not for
the temporary stimulus measures, said Plache, who agreed with
Jackson that Washington should consider measures that may be
painful in the short-term but in the long run will benefit the
economy and the auto industry.
"People feel better, so they are buying cars," said Plache.
"But we have to get our monetary and fiscal houses in order."