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Us To Follow Car Scrappage With Boost For White Goods

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http://business.timesonline.co.uk/tol/busi...icle6812971.ece

After the success of its car scrappage scheme, the United States Government is launching a new stimulus package — for household appliances such as fridges, dishwashers, and washing machines.

The $300 million (£185 million) programme is designed to encourage consumers to spend money while saving energy. It will authorise states to make rebates expected to be worth $50 to $200 for each purchase of an appliance with an Energy Star efficiency rating from the Department of Energy. While the amount on offer is only a fraction of the $3 billion made available under the car scheme, appliance makers facing declining sales have given it a guarded welcome.

Sales of household white goods were down 10 per cent last year and 15 per cent this year, according to the Association of Home Appliance Manufactures.

Whirlpool, which controls about 40 per cent of the market, has had a 20 per cent drop in sales in the first half of this year. Electrolux, the Swedish company, has seen a sharp fall in North American shipments, while General Electric has reduced production at a big refrigerator plant.

There is discontent among some manufacturers, who say that the scheme will allow each state to create its own version of the programme and to pick and choose which appliances will qualify. The Department of Energy has little time for this argument. “We feel very confident that states know best which programmes will work best in their communities. We are encouraging them to build on existing programmes offered by local utilities,†a spokeswoman said.

General Electric (GE) is already working with several states to establish a uniform approach across the country. Without one, it will be difficult for manufacturers to know in advance which appliances will qualify for rebates and where to ramp up orders and production.

Provided this can be achieved, the company is optimistic about the programme. GE said it would provide consumers with a “unique opportunity†to save money on appliances and help to reduce their annual energy costs.

Electrolux is also working with several states in an attempt to shape their programmes. Marty O’Gorman, chief financial officer at the company’s major appliances North America unit, said the company was ready and geared up for it. “We’re going to adjust our production as we see the changes in consumer demand,†he told The Wall Street Journal.

Reducing prices not an option, taxpayers much pick up the tab to stimulate demand.

It appears that they are going for a slow manage decline with stimulus package after stimulus package to keep people spending and GDP figures up.

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Economic systems come and go. Their dying days are marked with desperate, short-term gimmicks designed to drag out the slow painful death for a few more months or years. The predicament of the Western system is simple - we spend more than we produce and have done so for a very long time. Our car has run out of petrol. Sitting behind the wheel making 'brmmm brmmm' noises will not make it go again. We helpless passengers can only rue the day we let such idiots drive.

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IMO these subsidies of high price items create deflationary expectations in consumers.

Consumers will hold off purchases in anticipation of a subsidy. It's rather self fulfilling also.

Would you buy a new car right now if you heard the gov is thinking of launching a 3K subsidy in 2 months?

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