This Is Just A Brilliant Article To Dissect
I just love this article. You read it and then you just want to sit down over tasty beverages and talk about it with others that have read it defensively (and maybe a few that read it not so defensively for a new perspective). Trying to present my comments clearly might be a challenge...how about (in parentheses and italicized?)
Across USA, improvising as anxieties, prices soar
People do what they can to save
By the staff of
USA TODAY
FRONT ROYAL, Va. — The sunrise turns the night sky pink Tuesday as four travelers meet at the Park 'N Ride lot off Interstate 66 on the eastern edge of the Blue Ridge Mountains.
A nightmare has brought them together: the price of gasoline, which lists at $2.84 for regular, $2.94 for medium and $3.04 for supreme at the Shell and Exxon stations down the street. Their blue Kia van is bound for Washington, 60 miles away. Today, the one-way trip will cost $10.
(Front Royal is a long ride to DC, not just in terms of mileage, which they give, but in terms of traffic, which is only topped by LA, I believe, in terms of crappiness. These people are looking at a 20 mph commute most of the way if things go well. They do get to use the carpool lane for parts of 66, which will help if it's not too blocked up with people using it that shouldn't. So right away they're really saving by carpooling, just by getting mileage improvements in their driving.)
Jennifer Sperry, 32, works at the U.S. Office of Personnel Management. Her mother, Linda Burnett, 51, is bound for the same agency. Regina Sommers, 39, works at a law firm. And Pete Williams, 53, is building manager at the Reagan federal building.
Two weeks ago they faced the inevitable and formed this carpool, which saves them each more than $300 a month and costs them autonomy, convenience and privacy. Sperry and her mother used to drive in together, just the two of them, free to dish and divulge as they pleased. They don't see each other on weekends; that was their time together.
So begins Tuesday, May 2, another day in the great gasoline price spike of 2006. Across the nation, it will be another day of debating, bemoaning, analyzing, comparing and predicting the cost of a liquid vital to the nation's economy, mobility and sanity. Another day when the price of gas will seem as fundamental as the weather.
('great gasoline price spike'? How loaded is that? First, it assumes prices will go back down, which may very well not happen.)
Everyone will be affected by it, many will complain about it, and a few will do something about it. But almost no one will disagree that Tuesday was like almost every other day of late. Gas prices are driving us to distraction — minute by minute, mile by mile, cent by cent, from sunrise to sunset.
In Lake Tahoe, Nev., prices at some gas pumps are approaching $3.50 for regular. Record highs are being posted statewide in California, according to a new American Automobile Association survey.
A motorist pulled into the Bradley's Food Mart in Aurora, Colo., on Monday, and paid his bill with $34 in change — quarters, nickels and dimes — which took the attendant five minutes to count out.
But at Grand Central Terminal in New York City, some early-morning rail commuters quietly relish the prices they don't have to pay. Roby Muntoni, a Bank of America employee, ditched her SUV 18 months ago when she moved from North Carolina: “I couldn't even tell you what prices are right now.”
(Just by the by, what insight could someone that sold their car a year before prices rose give us?)
On New York's West Side, cabbie Alvin Adams doesn't feel like he's facing a crisis. His Toyota taxi consumes so much less gas than the standard 4-door, 8-cylinder Fords that he saves $30 a shift. He expects the city's taxi commission to approve a dollar surcharge soon to compensate for the high prices; he says more people are ditching their cars and taking cabs.
(Who woulda thunk that cabbies would be benefiting from higher gas prices?)
The QuikTrip convenience store on U.S. 41 is locked in a price war with a Raceway station across the street. They had the third-lowest gas prices in the Atlanta area on Monday, according to the website gasbuddy.com.
Among those attracted by the warfare:
Bill Marcus, 46. He likes the battle. “These guys can afford to sell gas 15 cents lower than everybody else in town because they're in a gas war. Why can't everybody lower their prices that much?”
(If I had to guess I'd say it's because not everybody could afford to sell gas at a loss - as these seem to be doing - in exchange for bringing in customers to their convenience stores, which is where a lot of gas stations, especially big ones, actually make their money. Also, volume and location location location...Bob's Gas Guzzle in middle-of-nowhere, Montana doesn't get his gas delivered so cheap.)
Raymond Gossett, 37, no longer fills up occasionally with premium gas to clean the fuel injectors in his Honda. Today, he pumps just $7 worth of regular because that's all he has; it's payday.
(Look, I don't know the guy, so I'm trying not to be harsh. But let's face facts, this is a guy that regularly blows extra money to 'clean the fuel injectors' in his car when regular and premium have the exact same additives in them. He's just not very smart or has simply not been informed of this little fact that gas station owners would like you to not know about. What else does Raymond blow money on that he shouldn't so that he's not living hand-to-mouth? Inquiring minds want to know.)
Belia Lara, 54, who supports herself reselling odds and ends at a flea market, says she sometimes begs strangers for gas money so she can drive her 15-year-old son to therapy for a spinal injury. “I say, ‘Please, please give me some money for gasoline.' Sometimes, they give me $5 or $10.” She offers her patrons something from her trunk, like a baseball cap. “But they say, ‘No, no, it's OK.' ”
In the Misty Creek subdivision outside Melbourne, Fla., three crewmembers from M&M Lawn Maintenance steer a fleet of roaring Kubota riding mowers around neat rows of palm trees. Three other workers swing gas-powered edge trimmers, scattering blades of rubbery St. Augustine grass.
M&M co-owner Steve Rose oversees 18 crews that burn through more than 1,300 gallons of gasoline a month. Rose's fuel bill is now $18,000-$20,000 per month, compared with $14,000-$15,000 per month late last year. But because of yearly contracts, lawn services like M&M can't easily pass their costs on to consumers. And the business is so competitive, services keep margins low to win those contracts.
Rising gas prices have forced Rose to craft new plans to save gas and maintain profits. For example, he used to send one crew over a five-day period to mow a 900-home subdivision in Port Orange, an hour's drive north. He now sends up three crews to get the job done in one long, hard day. That saves his fleet 280 vehicle miles per week, he says.
(If I had to label this I'd call it 'Capitalism in Action!' He needs to save money on gas, he's finding a way to do it. If he doesn't he's going to go out of business. If all the companies go out of business then demand will fall and prices will drop and then companies will start up again. No doubt they're living on the edge, they tell us that, they're talking about razon thin margins. What sort of profit do you think he makes? For every gallon of gas he burns through how much profit does he take in so we can compare to 'big oil'? And I'd be pretty surprised if he couldn't change the contract if gas prices really were going to bring him down. Either there should be language in there to protect him in this case, or he really needs to bite the bullet and talk to his customers. If his prices are fair and his work is good then his customers shouldn't be saying 'screw you, I won't renegotiate, I'll bring in your competitor', because his competitor is paying the same price for gas so any contract he negotiated would reflect that. At least I would hope they'd be that reasonable. If not, then you can't depend on them for your livelihood anyway, in my opinion. And let's talk about something else...inventory. He knows he needs gas to run. His prices, thin margin or not, has to reflect the need to buy gas to cut grass to make money. It's like the much bandied examples of a store needing to charge more so they can restock. And, hey, doesn't that sound like oil companies? Yeah, the oil they bought was cheaper before prices went up and if Exxon was going to shut their doors after their stock was used up, fine, but they're not, they need to fill their tanks back up to keep refining and they to pay higher prices to do it. This guy is just a great little microcosm for what's going on in the oil world. Sounds like he's working hard to keep it going, hope he succeeds...)
Rose is eager to try gas alternatives such as biodiesel fuel. But he doesn't foresee changes coming soon. “The people who have the power to do something about it are the people who are making money from it today.”
(...but then he goes and ruins it all and makes me question his ability to succeed and makes me stop pulling for him. Is he saying that the oil suppliers (the ones that are really making the money off this - the big money - because they're the only ones without a higher built-in cost) are the ones that can do something about changing oil demand? Only by raising prices would be reaction. Is he saying oil suppliers should be heavily investing in solar and wind power? I know, I'm mocking...he's either talking about government (which is, indeed, raking it in) or the refiners, who do not have anything to do with giving him new options, unless they choose to diversify. That's like saying wheat prices went up and the baker that makes bread from wheat had to raise his bread prices and that damn baker just won't offer soy products. Here's a tip to Mr. Rose, free of charge, if there was more money to be made in gas alternatives, they'd be doing it. For there to be more money there'd have to be more demand. Exxon is not in business to offer everything to everybody, they're a business built to make profit. That's what they do. If they don't do it, someone else will, probably at a higher price because competition would be lessened.)
Chris Franczyk, 39, arrives for work in downtown Chicago, having finished another 25-mile commute from the suburbs while watching his gas gauge sink and calculating how soon he'll have to pay another $40 to fill his Saturn Ion.
He's annoyed by the very thought of gas prices (“what I really think about them you can't write down”). He's shopping for a new car that gets better mileage — his gets 23 miles a gallon — but he thinks hybrids are too expensive. And he knows whom to blame for the prices. “Oil companies. Billions of dollars in profits for Mobil Oil? Come on. It's them.”
(No need to quote Mr. Franczyk. He's ignorant or dumb. One would be the fault of schooling and parenting and the press, the other his own. I don't know which it is. Otherwise he would know that when he pays $40 to fill his Saturn Ion at Mobil, Mobil is raking in about a buck and quarter. If Mobil cut their profit in half, by 50% - and I'm not even going to go into the widespread economic impact including shortages, stock prices, layoffs, etc - so that they only made 60 cents on his fill-up, he'd still be paying $39.40 for his fill-up. I'm curious whether the interviewer told him this. "You know, Chris, if Mobil cut their profit on your fill-up in half you'd save a whopping 60 cents...if they made absolutely not a single cent in profit, you'd still be paying about $39 for that fill-up. Still blame Mobil?")
Across the prairie in Iowa, Raymond Repp would be planting corn and soybeans on any other May morning. But recent rains have left his 3,300 acres too wet. That gives the 58-year-old farmer more time to plot ways to combat rising fuel prices, which makes everything more expensive, from fertilizing crops to hauling them to market.
(Yup, that's inflation talk. And if gas prices don't moderate we're going to see some. So far it hasn't really happened, but it probably will. Not a ton, unless prices continue to rise. They'll just rise to meet the new level and stop. It wouldn't be like the out-of-control inflation in the 70s. But expect it to happen. We need to face facts, suppliers are pulling about all the oil out of the ground that they can right now and places like China and India don't seem to care that Mr. Smith's SUV fill-up is $100. They're not going to cut back to help out Mr. Smith's commuting costs.)
This year, he and his cousin decided to cultivate fewer fields before planting, thus saving about a half gallon of diesel fuel per acre.
Repp bought a 7,500-gallon tank full of diesel in February, paying about $2 a gallon. Now he'd pay $2.80. So he's considering selling grain closer to home, even though the price he gets would be less.
(Assuming he's thought it all through, it seems like he's got a plan. People usually do. If he can get whatever dollars more by selling it further away and spending more on gas than he could by saving gas and selling it closer, he'd do that. You know what that's called? Maximizing profits. Sounds sorta like an oil company...or Johnson & Johnson...or Coke...What if all this rain in the ground, for some reason, really triggers a bumper crop later in the year but causes rot in some of his neighbor's property and he's able to make a killing off his grain? Guess we should expect Chucky to swoop down on Mr. Repp to steal his 'windfall profits', eh? Or would Mr. Repp, out of the goodness of his heart, artificially lower prices so as not to make too much money? You know what sounds like to me? Counterfeiters. People that make up fake bills but then just pass a few at a time so no one catches on...so he doesn't attract attention. "I'll sell you just a few bushels, Zeke, cuz I don't want that Chuck Schumer down here stealing my profit.")
“Does it keep me up at night? No,” says Repp, whose family has farmed south of Perry since 1869. “Do I think about it a lot? Yes.”
Meanwhile, the business day begins. In Dallas, Remington Oil & Gas Corp. says higher oil and gas prices and strong production drove first-quarter profit up sharply. In New York, oil and gas producer Noble Energy Inc. says its quarterly profit doubled.
Jen Richter, 21, arrives for class at the University of Wisconsin driving a Honda Aero moped. Richter, who drives all week on less than $2, feels no gas-price squeeze. In crowded Madison, she says, parking is a bigger problem.
(Wait, earlier they told us that everyone would feel it. Is there an editor in the house?)
About 20 minutes later, Jamie Dillon, 23, a student at a Madison technical college, drives up in an aging Buick Century that now costs about $42 to fill up. So Dillon has cut back on groceries, and he plans to move closer to school. And soon, he says, “I'm going to get rid of this, and get a bike.”
(Smart move, Jamie...you probably didn't learn that in school. They probably told you that the government should subsidize that car that's too big for your budget.)
Outside Denver, Gwen Sterner has an even better idea. She's feeling a bit morally superior as she fills her 2001 Toyota Prius hybrid with $29.59 regular — “the most I've ever paid for gasoline.” But she'll drive 650 miles before refueling. “I still can't believe all these people driving these hunkers,” Sterner, 60, says of SUVs. “I look at these guys and say, ‘You're stupid!' ”
By that logic, you might expect sales of gas-guzzlers to be slow at Mount Kisco Chevrolet, Cadillac, Hummer outside New York City. You'd be wrong.
SUVs such as the Chevrolet Suburban and Tahoe sell well, as does the Cadillac Escalade. And the tank-like Hummer? The smaller, more economical H3 “has been gigantic since its introduction last June,” says Patrick Holden, a confident 25-year-old salesman. The larger H2, estimated to get about 15 miles per gallon, sells to a niche market pretty much unaffected by gas prices.
(I love this part. It so totally flies in the face of all the 'they can't give SUVs away!' crap on the news. I don't see any less on the road. If you're spending over $50K on a car, I'm thinking that you don't care about gas prices.)
“We've had the best March and April that we've had in a long time,” says Holden. “People look at the sticker and see what the EPA rating is, but they've been doing that for decades. We're doing great with models that you might think wouldn't be doing so well. We have the blessing of affluence around here.''
Liz Kato is not so blessed.
The 41-year-old unemployed receptionist is searching for work in Aurora, Colo. But this morning she's almost run out of gas while driving around looking unsuccessfully for the office of a potential employer.
She pulls into a Sinclair Bradley station to put a mere $10 in the tank of her old SUV. “I hate to think that's the way it's going to stay,” she sighs, referring to the price on the pump. She pulls away to continue her search for work.
(Two thoughts on this. One is if what they mean is that she's driving around hoping to see a 'help wanted' sign. I don't think that's what they mean, because that would mean she's incredibly dumb. The second thought would be - she ain't getting that job. If she would just drive all around emptying a gas tank at $3/gallon instead of calling and getting directions, she's probably not going to wow them with her abilities.)
Lunch deliveries are just starting, and the driver for the Red Dragon Chinese Restaurant pays for his own gas. Owner Bob Choi says that, so far, the driver hasn't complained about soaring costs at the pump. But Choi, 54, has plenty of his own concerns: He pays more these days for vegetable and meat deliveries, and his gas bill is up to $800-$900 a month.
“Gas price affects everything,” he says. The biggest culprits are the gas jets used in the kitchen to cook the food he serves. “They eat gas like it is water,” he says.
Choi, in the restaurant business for 23 years, worries about the impact of rising costs on his bottom line and wonders if he might have to increase what he charges customers. “Raising prices,” he says, “is not a good idea.”
(No, but if everyone has to do it, which they will if we're talking about inflation, then people aren't going to stop buying his Kung Pow, because the Purple Fish across the street also had to raise the price of their Kung Pow. The only reason he'd lose customers is if his Kung Pow isn't as good as Purple Fish's. Again, this is capitalism, supplies aren't all fixed, they change, and inflation happens. Those that cope, succeed (and Chucky Schumer comes after their profits), those that don't adapt, go under. And someone else give it a go in their rental space.)
The few travelers along the 75-mile stretch of Route 200 between Winnett and Jordan in Eastern Montana pass hundreds of Black Angus cattle, dozens of pronghorn antelope and one gas pump.
Diana Thomas, 52, is in town for the day to work as an elections judge at the one-room schoolhouse. She spends $32.90 on 11 gallons to fill her Chevy Lumina, and wishes she'd done it a day earlier — when the price was 20 cents cheaper. “I don't really have a choice,” said Thomas. “It's too far to walk.”
Sand Springs consists of Sand Springs Store and Post Office, the Ecumenical Sand Springs Community Church, and the school, which has seven children in kindergarten through eighth grade. The nearest real town is Jordan, where everybody does their shopping. It's 32 miles away. Public transit consists of catching a ride with a neighbor.
(Hate to say it, but if that one pump lowers his prices too much everyone fills right up and next thing you know, the one pump in town is dry and no one else is getting any gas, not for 50 cents a gallon, not for 50 bucks a gallon.)
Calvin Thomas, 54, a farmer, isn't buying Tuesday. He's driven in on his four-wheel Yamaha Rhino buggy to pick up his mail. He's using the all-terrain vehicle, rather than his Chevy half-ton pickup, more these days to get around the farm.
“Everything we do here takes us 100 miles,” he says. “It's a 65-mile round trip just to buy milk.”
(Again, he's smart, given the chance he does the smart thing for him, the smart thing to maximize his profits. He's cuts his demand. If prices go up enough, demand will fall.)
Sitting in his truck with a good cigar and his dog, Hershey, Randy Kostiz appears unconcerned about the gas price crisis. Here's the key:
“I'm old,” says Kostiz, 61. “You've still got to live your life. There's no sense fighting windmills.”
(If only the press was so wise, wise enough to realize that tilting at a windmill that's going to be in office for a few more years, like it or not, and then no more, they might stop looking like such fools over and over again, which will only harm them when they try to pick the next windmill...they're not doing to good lately and keep backing really rickety windmills.)
From home in Forest Ranch, Calif., he and his wife are driving with an RV trailer to visit friends in Hutchinson, Minn., a 2,000-mile trip. No problem, he says: “You've just got to do what you gotta do and not worry about everything else.”
Gine Romano, a young, stay-at-home mom from Philadelphia visiting family in New York, opted to travel by Greyhound bus, even though it means toting a stroller, luggage and 1-year-old through the Port Authority Bus Terminal, one of the nation's busiest.
“We used to go out just to go out, (but) now it's only for important errands,” says Romano, who shares a car with her mother. Leisure trips have been reduced from four to six times a week to one to three. “Instead of driving to the mall, now we walk to the park,” she says. “Things are just getting more and more expensive. I can't even think about what it's going to be like 15 years from now, when my baby is grown up.”
(Sounds like the guy that wastes money on premium gas. They used to waste money just for the heck of it, but now, because they didn't save when they could've, they've had to really, really reduce. And did anyone point out that her baby will not be grown up at 16? I'm thinking she's a long way short of her own 20th birthday...if I had to guess.)
George Stock steels himself for the commute home. But instead of opening his wallet to pay for gas, he opens a saddlebag on the 30-year-old 10-speed he rides to and from work.
“These you have to have,” says Stock, holding up two miniature bungee cords from the collection he uses to secure items on the bike. He says he can carry everything he needs, from school papers to a 50-pound bag of mortar.
Stock, 63, a substitute teacher, has navigated traffic, desert heat and a stiff breeze to ride about 14 miles between his home and three area schools. Although he's been riding since gas was less than a buck a gallon, the gas price hike has renewed his optimism that more people will trade four wheels for two. “I'm no Lance Armstrong. If I can do it, anybody who is reasonably physically healthy can do it.”
(This is also hilarious. First they print stuff from a woman that sold her car a year before prices went up, then they talk about this poor chap on his bike, even though he's been doing it for many, many years.)
Step right up, the Bates Brothers carnival is open for thrills and chills. And step quickly, because the rides are open for just four hours — thanks to fuel prices.
Eric Bates, 57, owner of Bates Brothers Amusement Co., says that until recently, the Mardi Gras fun house, The Screamer and The Yo-Yo would run until midnight or longer — as long as people wanted to ride.
On this night, they'll stop in four hours — at 10 p.m. sharp.
Fuel prices are testing Bates' business skills. “It hurts to write a check for $7,000 to keep one generator going for a week,” he says.
His company consumes up to 10,000 gallons of diesel fuel a week. Fuel has replaced insurance as his company's second-biggest expense, behind labor costs. So Bates is adjusting that over which he has control: operating hours.
(This is misleading...are they saying he has no control over entry fees? Ride fees? I'm thinking he must. If diesel prices go up you cut back on usage OR you raise prices. If people still want to ride at higher prices, then you keep on truckin'. If they don't want to ride anymore, then I guess you know how important your business is to the world.)
The commuters in the blue Kia van pull back into the Park 'N Ride about 75 minutes after leaving Washington.
(They either commute off peak (a period hard to find on 66) or had a good day commuter-lane-wise.)
That business about mother and daughter losing their private time on the road? The mom, Linda Burnett, says she doesn't really miss it.
(Funny how the sob story comes at the beginning and the 'she doesn't really care' comes at the end, isn't it?)
For one thing, they eat lunch together every day. For another, when it was just the two of them with Jennifer driving, “I never felt like I could sleep, in case it would make her sleepy,” Burnett says.
Now, with two others to keep the driver company, Burnett can get her rest. And when neither mother nor daughter are driving, Jennifer can join her. Gas prices may be a nightmare, but for the Burnetts, carpooling works like a dream.
(Think they'll be sending a 'thank-you' card to Exxon for improving their commute - and their lives via more sleep?)
--
What a fun article. Lotsa good, lotsa bad, lotsa smart business owners doing what it takes to be successful (hoping Chucky Schumer doesn't show up looking for more of their profits), lotsa stupid people learning why you save when you can and don't waste on stupid things if you can't afford it.
Across USA, improvising as anxieties, prices soar
People do what they can to save
By the staff of
USA TODAY
FRONT ROYAL, Va. — The sunrise turns the night sky pink Tuesday as four travelers meet at the Park 'N Ride lot off Interstate 66 on the eastern edge of the Blue Ridge Mountains.
A nightmare has brought them together: the price of gasoline, which lists at $2.84 for regular, $2.94 for medium and $3.04 for supreme at the Shell and Exxon stations down the street. Their blue Kia van is bound for Washington, 60 miles away. Today, the one-way trip will cost $10.
(Front Royal is a long ride to DC, not just in terms of mileage, which they give, but in terms of traffic, which is only topped by LA, I believe, in terms of crappiness. These people are looking at a 20 mph commute most of the way if things go well. They do get to use the carpool lane for parts of 66, which will help if it's not too blocked up with people using it that shouldn't. So right away they're really saving by carpooling, just by getting mileage improvements in their driving.)
Jennifer Sperry, 32, works at the U.S. Office of Personnel Management. Her mother, Linda Burnett, 51, is bound for the same agency. Regina Sommers, 39, works at a law firm. And Pete Williams, 53, is building manager at the Reagan federal building.
Two weeks ago they faced the inevitable and formed this carpool, which saves them each more than $300 a month and costs them autonomy, convenience and privacy. Sperry and her mother used to drive in together, just the two of them, free to dish and divulge as they pleased. They don't see each other on weekends; that was their time together.
So begins Tuesday, May 2, another day in the great gasoline price spike of 2006. Across the nation, it will be another day of debating, bemoaning, analyzing, comparing and predicting the cost of a liquid vital to the nation's economy, mobility and sanity. Another day when the price of gas will seem as fundamental as the weather.
('great gasoline price spike'? How loaded is that? First, it assumes prices will go back down, which may very well not happen.)
Everyone will be affected by it, many will complain about it, and a few will do something about it. But almost no one will disagree that Tuesday was like almost every other day of late. Gas prices are driving us to distraction — minute by minute, mile by mile, cent by cent, from sunrise to sunset.
In Lake Tahoe, Nev., prices at some gas pumps are approaching $3.50 for regular. Record highs are being posted statewide in California, according to a new American Automobile Association survey.
A motorist pulled into the Bradley's Food Mart in Aurora, Colo., on Monday, and paid his bill with $34 in change — quarters, nickels and dimes — which took the attendant five minutes to count out.
But at Grand Central Terminal in New York City, some early-morning rail commuters quietly relish the prices they don't have to pay. Roby Muntoni, a Bank of America employee, ditched her SUV 18 months ago when she moved from North Carolina: “I couldn't even tell you what prices are right now.”
(Just by the by, what insight could someone that sold their car a year before prices rose give us?)
On New York's West Side, cabbie Alvin Adams doesn't feel like he's facing a crisis. His Toyota taxi consumes so much less gas than the standard 4-door, 8-cylinder Fords that he saves $30 a shift. He expects the city's taxi commission to approve a dollar surcharge soon to compensate for the high prices; he says more people are ditching their cars and taking cabs.
(Who woulda thunk that cabbies would be benefiting from higher gas prices?)
The QuikTrip convenience store on U.S. 41 is locked in a price war with a Raceway station across the street. They had the third-lowest gas prices in the Atlanta area on Monday, according to the website gasbuddy.com.
Among those attracted by the warfare:
Bill Marcus, 46. He likes the battle. “These guys can afford to sell gas 15 cents lower than everybody else in town because they're in a gas war. Why can't everybody lower their prices that much?”
(If I had to guess I'd say it's because not everybody could afford to sell gas at a loss - as these seem to be doing - in exchange for bringing in customers to their convenience stores, which is where a lot of gas stations, especially big ones, actually make their money. Also, volume and location location location...Bob's Gas Guzzle in middle-of-nowhere, Montana doesn't get his gas delivered so cheap.)
Raymond Gossett, 37, no longer fills up occasionally with premium gas to clean the fuel injectors in his Honda. Today, he pumps just $7 worth of regular because that's all he has; it's payday.
(Look, I don't know the guy, so I'm trying not to be harsh. But let's face facts, this is a guy that regularly blows extra money to 'clean the fuel injectors' in his car when regular and premium have the exact same additives in them. He's just not very smart or has simply not been informed of this little fact that gas station owners would like you to not know about. What else does Raymond blow money on that he shouldn't so that he's not living hand-to-mouth? Inquiring minds want to know.)
Belia Lara, 54, who supports herself reselling odds and ends at a flea market, says she sometimes begs strangers for gas money so she can drive her 15-year-old son to therapy for a spinal injury. “I say, ‘Please, please give me some money for gasoline.' Sometimes, they give me $5 or $10.” She offers her patrons something from her trunk, like a baseball cap. “But they say, ‘No, no, it's OK.' ”
In the Misty Creek subdivision outside Melbourne, Fla., three crewmembers from M&M Lawn Maintenance steer a fleet of roaring Kubota riding mowers around neat rows of palm trees. Three other workers swing gas-powered edge trimmers, scattering blades of rubbery St. Augustine grass.
M&M co-owner Steve Rose oversees 18 crews that burn through more than 1,300 gallons of gasoline a month. Rose's fuel bill is now $18,000-$20,000 per month, compared with $14,000-$15,000 per month late last year. But because of yearly contracts, lawn services like M&M can't easily pass their costs on to consumers. And the business is so competitive, services keep margins low to win those contracts.
Rising gas prices have forced Rose to craft new plans to save gas and maintain profits. For example, he used to send one crew over a five-day period to mow a 900-home subdivision in Port Orange, an hour's drive north. He now sends up three crews to get the job done in one long, hard day. That saves his fleet 280 vehicle miles per week, he says.
(If I had to label this I'd call it 'Capitalism in Action!' He needs to save money on gas, he's finding a way to do it. If he doesn't he's going to go out of business. If all the companies go out of business then demand will fall and prices will drop and then companies will start up again. No doubt they're living on the edge, they tell us that, they're talking about razon thin margins. What sort of profit do you think he makes? For every gallon of gas he burns through how much profit does he take in so we can compare to 'big oil'? And I'd be pretty surprised if he couldn't change the contract if gas prices really were going to bring him down. Either there should be language in there to protect him in this case, or he really needs to bite the bullet and talk to his customers. If his prices are fair and his work is good then his customers shouldn't be saying 'screw you, I won't renegotiate, I'll bring in your competitor', because his competitor is paying the same price for gas so any contract he negotiated would reflect that. At least I would hope they'd be that reasonable. If not, then you can't depend on them for your livelihood anyway, in my opinion. And let's talk about something else...inventory. He knows he needs gas to run. His prices, thin margin or not, has to reflect the need to buy gas to cut grass to make money. It's like the much bandied examples of a store needing to charge more so they can restock. And, hey, doesn't that sound like oil companies? Yeah, the oil they bought was cheaper before prices went up and if Exxon was going to shut their doors after their stock was used up, fine, but they're not, they need to fill their tanks back up to keep refining and they to pay higher prices to do it. This guy is just a great little microcosm for what's going on in the oil world. Sounds like he's working hard to keep it going, hope he succeeds...)
Rose is eager to try gas alternatives such as biodiesel fuel. But he doesn't foresee changes coming soon. “The people who have the power to do something about it are the people who are making money from it today.”
(...but then he goes and ruins it all and makes me question his ability to succeed and makes me stop pulling for him. Is he saying that the oil suppliers (the ones that are really making the money off this - the big money - because they're the only ones without a higher built-in cost) are the ones that can do something about changing oil demand? Only by raising prices would be reaction. Is he saying oil suppliers should be heavily investing in solar and wind power? I know, I'm mocking...he's either talking about government (which is, indeed, raking it in) or the refiners, who do not have anything to do with giving him new options, unless they choose to diversify. That's like saying wheat prices went up and the baker that makes bread from wheat had to raise his bread prices and that damn baker just won't offer soy products. Here's a tip to Mr. Rose, free of charge, if there was more money to be made in gas alternatives, they'd be doing it. For there to be more money there'd have to be more demand. Exxon is not in business to offer everything to everybody, they're a business built to make profit. That's what they do. If they don't do it, someone else will, probably at a higher price because competition would be lessened.)
Chris Franczyk, 39, arrives for work in downtown Chicago, having finished another 25-mile commute from the suburbs while watching his gas gauge sink and calculating how soon he'll have to pay another $40 to fill his Saturn Ion.
He's annoyed by the very thought of gas prices (“what I really think about them you can't write down”). He's shopping for a new car that gets better mileage — his gets 23 miles a gallon — but he thinks hybrids are too expensive. And he knows whom to blame for the prices. “Oil companies. Billions of dollars in profits for Mobil Oil? Come on. It's them.”
(No need to quote Mr. Franczyk. He's ignorant or dumb. One would be the fault of schooling and parenting and the press, the other his own. I don't know which it is. Otherwise he would know that when he pays $40 to fill his Saturn Ion at Mobil, Mobil is raking in about a buck and quarter. If Mobil cut their profit in half, by 50% - and I'm not even going to go into the widespread economic impact including shortages, stock prices, layoffs, etc - so that they only made 60 cents on his fill-up, he'd still be paying $39.40 for his fill-up. I'm curious whether the interviewer told him this. "You know, Chris, if Mobil cut their profit on your fill-up in half you'd save a whopping 60 cents...if they made absolutely not a single cent in profit, you'd still be paying about $39 for that fill-up. Still blame Mobil?")
Across the prairie in Iowa, Raymond Repp would be planting corn and soybeans on any other May morning. But recent rains have left his 3,300 acres too wet. That gives the 58-year-old farmer more time to plot ways to combat rising fuel prices, which makes everything more expensive, from fertilizing crops to hauling them to market.
(Yup, that's inflation talk. And if gas prices don't moderate we're going to see some. So far it hasn't really happened, but it probably will. Not a ton, unless prices continue to rise. They'll just rise to meet the new level and stop. It wouldn't be like the out-of-control inflation in the 70s. But expect it to happen. We need to face facts, suppliers are pulling about all the oil out of the ground that they can right now and places like China and India don't seem to care that Mr. Smith's SUV fill-up is $100. They're not going to cut back to help out Mr. Smith's commuting costs.)
This year, he and his cousin decided to cultivate fewer fields before planting, thus saving about a half gallon of diesel fuel per acre.
Repp bought a 7,500-gallon tank full of diesel in February, paying about $2 a gallon. Now he'd pay $2.80. So he's considering selling grain closer to home, even though the price he gets would be less.
(Assuming he's thought it all through, it seems like he's got a plan. People usually do. If he can get whatever dollars more by selling it further away and spending more on gas than he could by saving gas and selling it closer, he'd do that. You know what that's called? Maximizing profits. Sounds sorta like an oil company...or Johnson & Johnson...or Coke...What if all this rain in the ground, for some reason, really triggers a bumper crop later in the year but causes rot in some of his neighbor's property and he's able to make a killing off his grain? Guess we should expect Chucky to swoop down on Mr. Repp to steal his 'windfall profits', eh? Or would Mr. Repp, out of the goodness of his heart, artificially lower prices so as not to make too much money? You know what sounds like to me? Counterfeiters. People that make up fake bills but then just pass a few at a time so no one catches on...so he doesn't attract attention. "I'll sell you just a few bushels, Zeke, cuz I don't want that Chuck Schumer down here stealing my profit.")
“Does it keep me up at night? No,” says Repp, whose family has farmed south of Perry since 1869. “Do I think about it a lot? Yes.”
Meanwhile, the business day begins. In Dallas, Remington Oil & Gas Corp. says higher oil and gas prices and strong production drove first-quarter profit up sharply. In New York, oil and gas producer Noble Energy Inc. says its quarterly profit doubled.
Jen Richter, 21, arrives for class at the University of Wisconsin driving a Honda Aero moped. Richter, who drives all week on less than $2, feels no gas-price squeeze. In crowded Madison, she says, parking is a bigger problem.
(Wait, earlier they told us that everyone would feel it. Is there an editor in the house?)
About 20 minutes later, Jamie Dillon, 23, a student at a Madison technical college, drives up in an aging Buick Century that now costs about $42 to fill up. So Dillon has cut back on groceries, and he plans to move closer to school. And soon, he says, “I'm going to get rid of this, and get a bike.”
(Smart move, Jamie...you probably didn't learn that in school. They probably told you that the government should subsidize that car that's too big for your budget.)
Outside Denver, Gwen Sterner has an even better idea. She's feeling a bit morally superior as she fills her 2001 Toyota Prius hybrid with $29.59 regular — “the most I've ever paid for gasoline.” But she'll drive 650 miles before refueling. “I still can't believe all these people driving these hunkers,” Sterner, 60, says of SUVs. “I look at these guys and say, ‘You're stupid!' ”
By that logic, you might expect sales of gas-guzzlers to be slow at Mount Kisco Chevrolet, Cadillac, Hummer outside New York City. You'd be wrong.
SUVs such as the Chevrolet Suburban and Tahoe sell well, as does the Cadillac Escalade. And the tank-like Hummer? The smaller, more economical H3 “has been gigantic since its introduction last June,” says Patrick Holden, a confident 25-year-old salesman. The larger H2, estimated to get about 15 miles per gallon, sells to a niche market pretty much unaffected by gas prices.
(I love this part. It so totally flies in the face of all the 'they can't give SUVs away!' crap on the news. I don't see any less on the road. If you're spending over $50K on a car, I'm thinking that you don't care about gas prices.)
“We've had the best March and April that we've had in a long time,” says Holden. “People look at the sticker and see what the EPA rating is, but they've been doing that for decades. We're doing great with models that you might think wouldn't be doing so well. We have the blessing of affluence around here.''
Liz Kato is not so blessed.
The 41-year-old unemployed receptionist is searching for work in Aurora, Colo. But this morning she's almost run out of gas while driving around looking unsuccessfully for the office of a potential employer.
She pulls into a Sinclair Bradley station to put a mere $10 in the tank of her old SUV. “I hate to think that's the way it's going to stay,” she sighs, referring to the price on the pump. She pulls away to continue her search for work.
(Two thoughts on this. One is if what they mean is that she's driving around hoping to see a 'help wanted' sign. I don't think that's what they mean, because that would mean she's incredibly dumb. The second thought would be - she ain't getting that job. If she would just drive all around emptying a gas tank at $3/gallon instead of calling and getting directions, she's probably not going to wow them with her abilities.)
Lunch deliveries are just starting, and the driver for the Red Dragon Chinese Restaurant pays for his own gas. Owner Bob Choi says that, so far, the driver hasn't complained about soaring costs at the pump. But Choi, 54, has plenty of his own concerns: He pays more these days for vegetable and meat deliveries, and his gas bill is up to $800-$900 a month.
“Gas price affects everything,” he says. The biggest culprits are the gas jets used in the kitchen to cook the food he serves. “They eat gas like it is water,” he says.
Choi, in the restaurant business for 23 years, worries about the impact of rising costs on his bottom line and wonders if he might have to increase what he charges customers. “Raising prices,” he says, “is not a good idea.”
(No, but if everyone has to do it, which they will if we're talking about inflation, then people aren't going to stop buying his Kung Pow, because the Purple Fish across the street also had to raise the price of their Kung Pow. The only reason he'd lose customers is if his Kung Pow isn't as good as Purple Fish's. Again, this is capitalism, supplies aren't all fixed, they change, and inflation happens. Those that cope, succeed (and Chucky Schumer comes after their profits), those that don't adapt, go under. And someone else give it a go in their rental space.)
The few travelers along the 75-mile stretch of Route 200 between Winnett and Jordan in Eastern Montana pass hundreds of Black Angus cattle, dozens of pronghorn antelope and one gas pump.
Diana Thomas, 52, is in town for the day to work as an elections judge at the one-room schoolhouse. She spends $32.90 on 11 gallons to fill her Chevy Lumina, and wishes she'd done it a day earlier — when the price was 20 cents cheaper. “I don't really have a choice,” said Thomas. “It's too far to walk.”
Sand Springs consists of Sand Springs Store and Post Office, the Ecumenical Sand Springs Community Church, and the school, which has seven children in kindergarten through eighth grade. The nearest real town is Jordan, where everybody does their shopping. It's 32 miles away. Public transit consists of catching a ride with a neighbor.
(Hate to say it, but if that one pump lowers his prices too much everyone fills right up and next thing you know, the one pump in town is dry and no one else is getting any gas, not for 50 cents a gallon, not for 50 bucks a gallon.)
Calvin Thomas, 54, a farmer, isn't buying Tuesday. He's driven in on his four-wheel Yamaha Rhino buggy to pick up his mail. He's using the all-terrain vehicle, rather than his Chevy half-ton pickup, more these days to get around the farm.
“Everything we do here takes us 100 miles,” he says. “It's a 65-mile round trip just to buy milk.”
(Again, he's smart, given the chance he does the smart thing for him, the smart thing to maximize his profits. He's cuts his demand. If prices go up enough, demand will fall.)
Sitting in his truck with a good cigar and his dog, Hershey, Randy Kostiz appears unconcerned about the gas price crisis. Here's the key:
“I'm old,” says Kostiz, 61. “You've still got to live your life. There's no sense fighting windmills.”
(If only the press was so wise, wise enough to realize that tilting at a windmill that's going to be in office for a few more years, like it or not, and then no more, they might stop looking like such fools over and over again, which will only harm them when they try to pick the next windmill...they're not doing to good lately and keep backing really rickety windmills.)
From home in Forest Ranch, Calif., he and his wife are driving with an RV trailer to visit friends in Hutchinson, Minn., a 2,000-mile trip. No problem, he says: “You've just got to do what you gotta do and not worry about everything else.”
Gine Romano, a young, stay-at-home mom from Philadelphia visiting family in New York, opted to travel by Greyhound bus, even though it means toting a stroller, luggage and 1-year-old through the Port Authority Bus Terminal, one of the nation's busiest.
“We used to go out just to go out, (but) now it's only for important errands,” says Romano, who shares a car with her mother. Leisure trips have been reduced from four to six times a week to one to three. “Instead of driving to the mall, now we walk to the park,” she says. “Things are just getting more and more expensive. I can't even think about what it's going to be like 15 years from now, when my baby is grown up.”
(Sounds like the guy that wastes money on premium gas. They used to waste money just for the heck of it, but now, because they didn't save when they could've, they've had to really, really reduce. And did anyone point out that her baby will not be grown up at 16? I'm thinking she's a long way short of her own 20th birthday...if I had to guess.)
George Stock steels himself for the commute home. But instead of opening his wallet to pay for gas, he opens a saddlebag on the 30-year-old 10-speed he rides to and from work.
“These you have to have,” says Stock, holding up two miniature bungee cords from the collection he uses to secure items on the bike. He says he can carry everything he needs, from school papers to a 50-pound bag of mortar.
Stock, 63, a substitute teacher, has navigated traffic, desert heat and a stiff breeze to ride about 14 miles between his home and three area schools. Although he's been riding since gas was less than a buck a gallon, the gas price hike has renewed his optimism that more people will trade four wheels for two. “I'm no Lance Armstrong. If I can do it, anybody who is reasonably physically healthy can do it.”
(This is also hilarious. First they print stuff from a woman that sold her car a year before prices went up, then they talk about this poor chap on his bike, even though he's been doing it for many, many years.)
Step right up, the Bates Brothers carnival is open for thrills and chills. And step quickly, because the rides are open for just four hours — thanks to fuel prices.
Eric Bates, 57, owner of Bates Brothers Amusement Co., says that until recently, the Mardi Gras fun house, The Screamer and The Yo-Yo would run until midnight or longer — as long as people wanted to ride.
On this night, they'll stop in four hours — at 10 p.m. sharp.
Fuel prices are testing Bates' business skills. “It hurts to write a check for $7,000 to keep one generator going for a week,” he says.
His company consumes up to 10,000 gallons of diesel fuel a week. Fuel has replaced insurance as his company's second-biggest expense, behind labor costs. So Bates is adjusting that over which he has control: operating hours.
(This is misleading...are they saying he has no control over entry fees? Ride fees? I'm thinking he must. If diesel prices go up you cut back on usage OR you raise prices. If people still want to ride at higher prices, then you keep on truckin'. If they don't want to ride anymore, then I guess you know how important your business is to the world.)
The commuters in the blue Kia van pull back into the Park 'N Ride about 75 minutes after leaving Washington.
(They either commute off peak (a period hard to find on 66) or had a good day commuter-lane-wise.)
That business about mother and daughter losing their private time on the road? The mom, Linda Burnett, says she doesn't really miss it.
(Funny how the sob story comes at the beginning and the 'she doesn't really care' comes at the end, isn't it?)
For one thing, they eat lunch together every day. For another, when it was just the two of them with Jennifer driving, “I never felt like I could sleep, in case it would make her sleepy,” Burnett says.
Now, with two others to keep the driver company, Burnett can get her rest. And when neither mother nor daughter are driving, Jennifer can join her. Gas prices may be a nightmare, but for the Burnetts, carpooling works like a dream.
(Think they'll be sending a 'thank-you' card to Exxon for improving their commute - and their lives via more sleep?)
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What a fun article. Lotsa good, lotsa bad, lotsa smart business owners doing what it takes to be successful (hoping Chucky Schumer doesn't show up looking for more of their profits), lotsa stupid people learning why you save when you can and don't waste on stupid things if you can't afford it.
posted by Falze at 4:32 PM
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