Harbinger of the Future: California Fires Damage Auto Sales

Fast-moving California wildfires fed by Santa Ana winds have caused $1 billion of damage.

1,800 homes have burned and 500,000 have been evacuated.

Power went out over wide swaths of the San Diego area.

At least nine are known dead.

President George Bush declared a federal emergency.

There over 100 auto dealers near southern California's wildfires. No dealership has been damaged, but the car business has felt the impact of the burn.

Real-estate-bubble California was already in an economic decline when disaster struck.

Dealership chain AutoNation reported new vehicle sales off 11 percent in California in its latest quarter.

A consistent theme here is that humanity in general, and the U.S. car business in specific, is unprepared to weather the smallest crisis. The LA fires are graphic evidence of the auto industry's weakness.

People don't buy cars when their house is burning.

Employees likewise don't report to work when schools are closed and their family is in danger.

Prices of raw materials and fuel climbed as transportation was restricted.

Major corporations closed down, including Sony, Hewlett-Packard, Nokia, teen retailer Wet Seal, and Callaway Golf.

Websites based in the region stopped posting regular content.

The business that benefits from smoke and flames? The air purifier industry has seen record sales since the flame-out began.

Asian automakers, dominant players on the trend-leading U.S. west coast, will bear the brunt of the sales drop.

Hyundai Motor Finance Company (HMFC) is offering its retail customers in the fire ravenged areas the option to skip up to three monthly car payments without deferment fees.

Other automakers rushed to make donations to the fire relief effort.

There is a lesson here for next-quarter's-numbers Detroit management and jobs-forever stateside unions: this economic ship is not unsinkable.