October 7, 2024

Bucks Blog: Auto Insurance, Scaredy-Cats and the Rollers of the Dice

In this weekend’s Your Money column, I try to lay out the facts and odds that lay behind the question of whether any of us have enough auto insurance. Some people look at the long odds of a bad wreck and buy the minimum amount that their state requires. Others buy as much as they can, figuring that it’s better to be safe than to be sorry.

So to the rollers of the dice, who have bought little insurance over the decades and have bet that they wouldn’t ever be facing down a large claim, I ask this: Have you ever regretted that choice? Do you still feel comfortable with it?

As for the risk-averse, will you be upset decades from now if you’ve shelled out all of that extra money for premiums and never once made a claim or been subject to one?

In other words, what’s the right way to think about these questions — and how do (and should) our feelings affect our efforts to reckon with the odds?

Article source: http://bucks.blogs.nytimes.com/2012/08/24/auto-insurance-scaredy-cats-and-the-rollers-of-the-dice/?partner=rss&emc=rss

The Divergent Fortunes of Saab and Volvo

“We’ll be back at work soon, and I want to be ready,” said Mr. Hernandez. He is a door adjuster in the body shop, and now works out six days a week.

The Saab factory here has not produced any cars since April, when creditors stopped providing operating cash and left Mr. Hernandez and more than 3,000 of his co-workers with little to do but wait. Most of them remain defiantly devoted to the company despite the long odds against its survival.

“I love Saab. I drive a Saab 9-3,” said Mr. Hernandez, a 10-year employee and a native of Cuba, insisting that a reporter follow him outside to see his car. “I’m confident that it will work out.”

The Saab facility in this city of 40,000 people is silent, save for workers who drop by once a week to perform light maintenance or cleaning to stay busy.

Just 62 miles to the south, in Gothenburg, Sweden’s second-largest city, the contrast is stark. There, Volvo is operating two shifts, churning out 54 cars an hour from early morning until midnight. Stefan Jacoby, Volvo’s new chief executive, talks confidently of plans to raise output to 800,000 cars a year by 2020, more than double last year’s total.

That the outlook for the Swedish carmakers could be so different is partly testimony to diverging histories under former American owners — General Motors for Saab, Ford Motor for Volvo. It also reflects their ensuing fortunes: Volvo found a deep-pocketed rescuer and Saab did not.

The Zhejiang Geely Holding Group, the largest private carmaker in China, paid Ford $1.8 billion last year for Volvo. Saab ended up in the hands of an underfinanced Dutch entrepreneur, Victor R. Muller, the owner of a tiny maker of sports cars called Spyker.

For Mr. Muller, 52, who had never managed a large company before, it was a daring move. G.M., eager to wash its hands of Saab as it prepared for bankruptcy, accepted $74 million in cash and $326 million in preferred shares for the company in January 2010. G.M., which continues to make cars under the Saab name in Mexico, has since written off the value of those shares.

If Mr. Muller was going to turn Saab around, he needed to win over loyal customers, who loved the company’s aerospace heritage and technological leadership, and a style they regularly describe as quirky and different.

G.M., over the two decades that it ran the company, had made cars based on Opel, Subaru and even giant sport utility vehicle platforms. Martin Skold, who studies the auto industry at the Stockholm School of Economics, said G.M. never figured out how to integrate Saab, ultimately investing little in the brand while raiding it for technology like turbo engines and front-wheel drive.

Per-Erik Mohlin, a former president of Volvo, puts it more bluntly. “G.M. had no idea what to do with Saab,” he said. “I don’t think they had a clue what to do with a premium brand.”

James R. Cain, a spokesman for G.M., said the company “has always viewed Saab as a unique and iconic brand, and we hope they are able to work their way through their difficulties.”

Jeff Platt, a blogger in New York at a site called SaabsUnited, said that Mr. Muller was going to restore at Saab “what G.M. had distilled out of them.”

But Saab was too small to succeed as a mass-market company in an industry dominated by giants, and it lacked the niche products that allow a company like Porsche to prosper. Its lineup consisted of two aging models, and there was no cash to roll out new vehicles.

In March, suppliers began cutting off credit. The Trollhattan factory sputtered for a bit, closing completely in June. Today, even the cars in the Saab Museum are pledged to creditors.

Among Saab employees, the message is unrelentingly — almost religiously — upbeat. Anette Hellgren, president of the Unionen white-collar local union in Trollhattan, said that when she met colleagues, “I tell them, ‘I still believe in the company.’ ”

“It’s essential that we don’t put our heads in the sand,” she said, “that we keep going to work, going out, going to parties.”

Many outsiders see little reason for hope.

Article source: http://feeds.nytimes.com/click.phdo?i=9f4f262a33bf2bf973dc12eb9beb6b4c