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Dec. 2008: It's time for Americans to take their blinders off


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Sep 16, 2000
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1990 Corvette ZR-1
It's time for Americans to take their blinders off

by Rob Loszewski
Sunday, December 7, 2008
©2008 Rob Loszewski, Corvette Action Center
No use without permission

Over the last couple of months, as the U.S. economy has worsened and the fate of the Detroit Big 3 has darkened, I've remained quiet in voicing my own personal views of what should happen to GM, Chrysler and Ford. After listening to the Detroit Big 3's testimony on Capital Hill, and the opinions of friends and family, I'm not sure I can remain silent any longer.

The general consensus of Americans regarding the possible bailout of Detroit is, "let them go bankrupt." Really? Are you serious? Why? The reasons I've heard is because Detroit is old, stagnant, not keeping up with the times, and not building cars the American public wants.

If that's truly the case, then please try and explain to me why so many American families drive Suburbans, Escalades, Denalis, and enormous trucks?

In my opinion, Detroit built exactly what American's wanted. A company isn't in business to build, or provide a product or service that nobody wants. If Detroit has been building products that nobody wants, they would have gone bankrupt MANY years ago.

The next thing I hear is that Detroit's quality sucks. While I'm willing to admit, that some of what has come out of the Detroit in past years has been complete trash, and some cars and platforms to this day, are trash compared to the competition in their market, Detroit has come A LONG way in building fantastic cars with excellent quality.

Think I'm kidding? Spend a little time running some Google searches regarding J.D. Power and Associates Quality Studies and take a look at the cars from Detroit that have won that award.

Let's take a look at what type of car has won the well respected and coveted, "Motor Trend Car of the Year" award:

2008 Cadillac CTS
2007 Toyota Camry
2006 Honda Civic
2005 Chrysler 300
2004 Toyota Prius
2003 Infiniti G35 Coupe / Sedan
2002 Ford Thunderbird
2001 Chrysler PT Cruiser
2000 Lincoln LS
1999 Chrysler 300M
1998 Chevrolet Corvette
1997 Chevrolet Malibu
1996 Dodge Caravan
1995 Chrysler Cirrus
1994 Ford Mustang
1993 Ford Probe GT
1992 Cadillac Seville Touring Sedan
1991 Chevrolet Caprice Classic LTZ
1990 Lincoln Town Car
1989 Ford Thunderbird SC
1988 Pontiac Grand Prix
1987 Ford Thunderbird
1986 Ford Taurus LX
1985 Volkswagen GTI
1984 Chevrolet Corvette
1983 American Motors Renault Alliance
1982 Chevrolet Camaro Z28
1981 Chrysler K-cars, Dodge Aries/Plymouth Reliant
1980 Chevrolet Citation

In Car and Driver's "10 Best Cars of the Year" going back to 2006, Cadillac, Chevrolet Corvette and Chrysler have made the list.

I also found that the Cadillac CTS and the Corvette have been repeat contenders and winners; the Corvette for many more years than the CTS.

There is no doubt, even these cars have room for improvement, but if you really stop and think about it, what car/platform doesn't?

In my opinion, Detroit is in the situation they're in, NOT because of quality, and NOT because they refuse to build cars that people want. They are in the situation they are in because over the last several months, the cost of gasoline had skyrocketed - sometimes over night and the economy took a nosedive causing the credit market to run and hide.

Go do some research on what has happened to the credit market and take a look at how difficult it is to get a loan for just about anything now. If people are not able to get financing to buy a car, guess what....car sales take a nosedive.

All of a sudden, all the Chevy Suburban, Denali and Escalade owners are driving around in their land yachts wondering why it's costing them around $75.00 per fillup instead of $40.00. So the typical American belief is, "well, who's fault is this? It must be Detroit's fault because they continue to build these cars and refuse to build more fuel efficient vehicles." No actually, it's YOUR fault, because YOU bought the land yacht because YOU could afford the gas at the time. Why did you buy the land yacht to begin with? Oh, because you have 3-6 kids that you need to haul around and you couldn't stop at just 1 or 2 kids.

You get the picture....before you point the finger of blame at Detroit, take a cold, hard look at yourself in the mirror.

"Well....why is Detroit the only ones affected by this and why are they the ones asking for help?"

Again, do some research. I think you'll be surprised to find out that the Big 3 in Detroit are NOT the only ones approaching their government and asking for help.

Here's an interesting article I ran across published on April 16, 2008:

From The Times
April 16, 2008

European car sales plummet as the credit crunch takes its toll

Christine Buckley, Industrial Editor

Carmakers in Europe have suffered their worst month in more than four years as the impact of the credit crunch begins to be felt by industry....

Link to article: European car sales plummet as the credit crunch takes its toll - Times Online

I believe that you'll also find in your research that UK and Chinese car manufacturers have gone to their respectives governments and asked for help.

Folks, this is NOT a Detroit problem. This is a GLOBAL ECONOMIC PROBLEM. Why? Because the economy, just like everything else in this world, is subject to the laws of physics. What goes up, must come down. For as long as Man has walked this earth, we've seen it time and time again. We have seen it repeatedly in many facets of the American society for decades as seen in the automobile industry, the housing market, credit market, stock market, and overall health of the economy.

The difference between now and many decades ago, is that the economy is no longer affected by what goes on within the borders of the United States. It is a GLOBAL ECONOMY that is affected by situations that occur across the sea - something which the majority of Americans are still incapable of seeing. We're getting better, but boy do we have a long way to go.

So now that it's quite clear to see that Detroit is really a victim of a global economy that other car manufacturers have fallen victim too, do you still feel that Detroit should be allowed to go bankrupt?

Let's take a look at some numbers for a minute. In this thread:


...I posted a breakdown of automotive related jobs per state as of Dec. 3, 2008.

The total number of jobs for all states: 2,201,955. That number encompasses auto parts, assembly and sales jobs. Nearly two and a quarter million jobs - gone. Don't think you'll be affected because you don't work in the automotive industry? Think again.

Take a look at what happened to the coast of baby food in the grocery stores when the diesel fuel went through the roof just a short time ago and that increased fuel cost trickled down to the cost of groceries. In fact, it trickled down to almost everything we buy.

Just imagine what will happen when the Detroit 3 collapses and that collapse hits parts manufacturing companies and they collapse. Then auto parts suppliers such as VIP auto or NAPA auto parts goes bankrupt because they are no longer able to get the parts they need to sell. Now, the cars and trucks that are used to deliver goods to market are no longer able to be repaired because - well repair shops are closing up because they aren't able to get the parts required to conduct repairs because the parts manufacturers went bankrupt because Detroit - their bread and butter - collapsed.

Before you know it, the cost of everything goes through the roof and we are no longer in a Recession - but we're seeing Depression rear it's ugly head on the horizon.

A pretty scary scenario and one that might not be 100% accurate, but I hate to say it, it's not out of the realm of possibility.

Over the last few decades we've seen American jobs leave this country and go overseas? Why? Because of corporate greed in my opinion. This country has gone from a manufacturing nation to a nation of consumption. Detroit iron is the last great thing this country continues to manufacture.

Just imagine if Detroit crumbles and gets bought up by European and Asian car companies. Just imagine if the Corvette is no longer a "Chevrolet" but a "Nissan" or "Honda". Or just imagine if the car manufacturer that buys GM decides that the Corvette competes too closely with their one or two of their own products and decides to axe the Corvette platform all together.

Stop and think about the great age of cars and Detroit iron back in the fifties and sixties....hopping in that 1965 Corvette of yours, picking up your girlfriend, and heading down to the local burger joint listening to Wolfman Jack on the radio. Once you get your burger you head to the coast for some slush and sit parked at the beach listening to the baseball game on the Corvette's radio.

Times like that are going by the wayside quick and America is losing her identity at an alarming rate. If Detroit's Big 3 is allowed to go bankrupt, it will be the end of the United States manufacturing anything of significance. American Pride will have gone from pride in building and marketing unique American products to how much money we have in our wallets to buy the products we desire overseas.

The United States will become a country that is owned by all other countries, and American citizens will no longer be able to take pride in products that were built through American blood, sweat and tears. There needs to be a government representative or board that oversees the use of the money and insures that the money is paid back to the government within a set amount of time. Once the money is repaid, the government steps back and the representative or board no longer has a say in what Detroit does.

Detroit needs to be helped and should be extended a bailout. However, that bailout should not come without reservations or restrictions.

That money should be given to Detroit with the complete understanding that it is to be spent HERE on American soil and not overseas in the building of a new assembly plant on foreign land.

GM in particular should undergo a restructuring of it's platforms and assembly processes within a certain time frame in order to make it more competitive in a global economic market that can quickly change on whim.

Detroit has become a pro at product re-badging and it needs to stop NOW. The perfect example is the F-body platform of the late nineties. The Firebird and Camaro looked identical with the exception of the bumpers, some plastic body cladding and some interior components.

Another example is the Pontiac Solstice and Saturn Sky.

What about product ingenuity?

The Chevy HHR - a great car/crossover, but molded after the PT Cruiser. It took GM how long to come to market with that after the general public was getting sick of seeing the PT Cruiser everywhere?

The Chevy SSR - one word: why?

Other than Cadillac and Corvette, GM's styling has become disgustingly bland, boring, stagnant, and unemotional. GM Styling Dept. needs a major fire lit under their ass and they really should take lessons from Chrysler's Styling Dept.

Last but not least, Marketing. In my opinion, GM's marketing arm has completely dropped the ball and become quite pathetic in trying to market the products they're building. GM has fought long and hard to build cars that meet or exceed European quality standards, and yet, where is the marketing? They have cars that have won JD Power and Associates awards, but where are the commercials and advertisements? Maybe I just don't pay much attention, but they only play on JD Power and Associates I've seen recently is in a GM Truck ad on TV. Regardless, if I'm not paying attention to the ads, how much of the American public is?

Support what you build. If you think you're just going to bring a product to market touting it as the latest and greatest, and try to get people to forget about the crap that was built in the seventies and eighties....forget it.

In summary, Detroit should be bailed out, but they should be bailed out with stipulations that the money is used to rebuild and reposition Detroit in being leaders and innovators - not followers trying to play catch up requiring a bailout everytime the global economy suddenly shifts in one direction or the other.

We gave billions of dollars to AIG - the pinnacle of corporate greed and they didn't have to jump through all the hoops that Detroit has been required to go through. And yet, we, the American public are willing to let the last great American manufacturing industry crumble.

Talk about a sad state of affairs due to double standards, corporate greed and short-sightedness.

If you feel that Detroit and GM in particular should be helped, go to: Facts About the Auto Crisis - GM Facts and Fiction and contact your U.S. Senator and Representative. Let them know that you support a bailout, otherwise, continue to stick your head in the sand and watch as America loses its pride and identity it worked so hard to achieve.
:D:D:D "The Junkie" purdy much agrees with you 99.454,427,396,350,327,283%!!:thumb:thumb:thumb
Very well thought out and well written piece, Rob. :thumb

I think a bailout with stipulations attached is a must. Bailout to prevent a total meltdown of the American economy (talk about ripple effect) and stipulations to insure taxpayer money is used in the best interest of the taxpayer.

This nightmare reminds me of a post I made 2 or 3 years ago concerning the loss of jobs due to the movement of factories/jobs overseas.

Eventually it would catch up with us. You cannot expect to move all the jobs and money overseas, at the same time expecting the American consumer to purchase your product. When you're out of work, the last thing you consider buying is a new car.

:wJane Ann
Well said, Rob. The fact that Detroit builds what sells is central here. They built all those trucks and SUV's that are closer to locomotives than they are to cars because that is what people wanted to buy! The consumers chose that.

I certainly support capitalism and the free enterprise system. But I don't support greed and theft. The robber barons of the early 20th century were an example of the excesses that can happen when free enterprise is abused. The mess with housing, AIG, etc is another one.

We will run out of oil- perhaps not in my lifetime, but certainly in the lifetimes of my grandchildren. Things cannot continue as they have been, with ever-expanding energy use and ever-growing human population. We cannot drill our way out of this. The planet can only support so many people. There will be a population adjustment one of these days...
For me, it all comes down to a few simple matters.

  • I am unconvinced that any economy can last long when all it does is import. Are we simply going to sell things to each other, without making anything? More and more of North America's wealth is being exported.
  • North American (yes in my country too) automotive plants were converted to military equipment and munitions manufacturing during WWII. Imagine that scenario being repeated in the current situation?
  • Seven to ten (take your pick) spin-off jobs (sales, parts, service, trucking, rail, etc.) for every Big Three job in North America. I don't want to imagine the consequences if all those jobs are lost.
There's little choice.............loan guarantees (on both sides of the border -- we've already provided 100's of millions here) with specific requirements and tight controls.

:w Rob :eek:hnoes

I’m not sure if I should put “From the Halls of Montezuma” or “Nocturne Violin” (Chopin) on the old reel to reel, for inspiration here ;)

Well written opinion and point of view. I don’t agree, but that doesn’t make me right either.

I must be a bit more callus or maybe it’s just that I find it difficult to understand the nature of the beast. It seems to me, GM ~ Ford ~ Chrysler have squandered their future and the future of their stockholders, employees and affilated business’s with PPP (pisspoorplanning). Where was, where IS their Short-Range, Mid-Range and Long Term planning business forecasts. Usually a business will consider many things, but most are prepared for Short Term, Mid Term forecasts that include upswings, and downswings with a plan setup to go into effect when or if needed. In the Electric Utility Business we called it Planning and future forecast ~ looking at worst case scenario's ~ with corrective measures to address minor, major and castrophic events.

Somewhere in all this hype and shell game, Flags, Whistles, Flashing Lights and a very loud Train Whistle has been sounding. I can’t believe the brain trust of the Big 3 didn’t see, hear or say anything until the bottom fell out. Can we really point at the price of Oil, or the Mortage minipulation as the cause of the Big 3’s troubles. It would be nice, but in reality how many Home Mortage’s out there (% wise) have gone into default(?) compared the Total number of Mortages? How many people walked away from their Primary Resisdence? How many walked away from “Investment Properties” ?

The World ecomony may have more to do with the Big 3 than any of us would like to know about.. I believe manipulation of the Worlds ecomony is not as “Art Bell'ish” as some think. :eek

The entire Industrial Base of the United States has been under attack for years. Expensive Labor, Governmental Regulations, Enviornmental Agencies and Groups… is it any wonder why Car Manufacturer's in “North” America can NOT be assembled without imported parts… parts that used to be made (read: Manufactured) in “North” America.

As you point out, and I agree.. We are becoming a Consumer Driven Nation.

Me thinks GM ~ Ford ~ Chrysler need to refocus and look inward at their Strengths and Weakness. Take a firm gripp on reality, look at a solutions not the problem. They need to take another notch up on their belts. Look at what works and get rid of what doesn’t. Quit looking for an easy fix or way out, and do some Realistic Short Range Planning with Labor, Plant & Facilities budgets. Consider re-negotions at EVERY level, and leverage their assets. Management needs Lead or be replaced! Stockholders, consumers, employee's and associates within the business world need to believe and have confidence in the management, products, service and sustainability. Throwing $$$ at the Big 3 does not provide the incentive needed for them to regroup or recover what they have fiddled away.

I’m losing my train of thought and interest, before I ramble on too much more, I’ll just say "I respect your opinion, but I do not totally agree" :D

I picked up a copy of Consumer Reports auto edition this week and was amazed at how unimpressed they are with regards to American cars with the exception of a few standouts. They thoroughly dislike Chrysler in particular - all poorly rated. But its not a surprise - Its been this way as long as I can remember - every year in CR.
I never discuss religion or politics because either is a never ending discussion. However, if anyone wants to know why the auto manufactures did this or that they should be asking that of the person who looks back at them when they are looking into a mirror. Detroit is nothing more than a mirror of us Americans. Detroit is over weight in many respects and so are 40% of the American population. Detroit is slow to predict and respond to change and so are most Americans. Detroit is buried by debt. So are most Americans.

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How many of you paid cash for your VETTE? I’ve seen one and two year old Vettes advertised as “just take over my payments” and the payment is $900 per month or more. The person who bought that car obviously had no money down and did not “plan/save ahead” for that purchase and now they are in trouble. Now you get the idea. If GM only sold vehicles to people who had cash in hand, as I think they should, then the industry would have folded or changed fifty years ago. It would be smaller but more responsive to changes in the industry.

Most of us have learned to live with immediate gratification relying on future expectations and when those strategies fail to come to fruition we do not want to take blame for it. Detroit does the same thing and we blame them for poor planning. Detroit suffers from management issues but I’ll bet most Americans have similar difficulties just managing their personal and family needs. When was the last time you opened the refrigerator and found that you had run out of one staple item such as milk or another. Hey, doesn’t that indicate bad planning? Now you know what Detroit goes through.

Someone talked about Detroit building the vehicles that Americans demanded. I believe that statement was right on the money. I was associated with two Arizona dealerships around 1996 when Suburban’s were selling for over list price. In response, Chevy converted another plant to build Suburban’s. You think they would have done that if buyers did not demand it?? Many local residents thought he/she needed a big four wheel drive Suburban as a status symbol. This continued till the present time and now I find many of these sitting in drives with for sale signs.

As far as quality, I believe that it is a relative concept. I have put 180K on a 1984 Monte Carlo SS and after 23 years of ownership sold it for half of what I paid for it. Try that with you foreign import. Totals items replaced were two alternators one water pump and one power steering pump, two ignition coils, one radiator, four sets of brakes and hoses and other normal wear items. All done by me. That car still had the original floor mats when I sold it.

I drove 1994 & 1998 turbo Pontiac Sunbirds convertibles for 160K and 170K. My 94 Vette roadster currently has 100K and all with minimal upkeep. I think this shows that Detroit can and does turn out a good product that provides value for the money.

I think most people are concerned about Detroit because they do not have their own house in order. If they do then what happens to Detroit will have an impact but other alternatives will present themselves. However if you’re over extended on credit and worrying about loosing your job then who can you blame for that?? Poor management in Detroit or poor management at home? I am sorry if I offended anybody but I think it’s time we stop looking for someone else to blame when we, through our purchasing/spending habits, are the primary cause of what is happening in this country.
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^^^^ An excellent and quite valid response.
Its a three part disaster. I agree that Detroit needs to be saved; either through a bailout with strict conditions or a controlled bankruptcy.

The problem is that no one seems to address the other two pieces to the puzzle. The UAW and government regulation. Unless something changes that reduces the labor cost and government regulation, think of the two tier CAFE standards, the situation will just continue indefinitely.
While there is plenty of blame to go around and all of the above posts hold some truth, the difference maker has and will be the UAW. They have bled those three companies dry and have been doing it for years. Free health insurance for life, Job Banks, free legal for life and a general abuse of the system has doomed Detroit. I have relatives from Michigan and those that do not work for GM have nicknamed it "Generous Motors". Those that do work for GM feel that there is some great big, mean entity that owes them a living. For those of us who work hard every day to ensure our jobs for tomorrow, this attitude is offensive.

With a gun to their head! I can't imagine anything worse than being a large corporation with union employees, particularly the UAW.
Rob, very well written. I concur with your opinions 100%.

Time for our country to take back the manufacturing and the innovation we have allowed to leave.

Time to tell the UAW they will have to start playing by the Big 3's rules, not theirs!

YEP - If your playing...

...in the Big Leagues ya need to carry a big bat and use it from time to time: If not the kids will be telling dad what to do! :cool

Later . . . . . . .
6 Shooter
This is a simple problem, but it has no simple solution.

The problem:
If the amount of money that comes out of a company is LESS than the amount of money that goes into the company, then the company will fail.

There are two solutions to this problem:
1) reduce the amount of money that goes out
2) increase the amount of money that comes in

A bail-out or loan is not a solution. It is a temporary boost of money going in, but it does not solve the problem. It will add water to the bucket, but it does not plug the hole.

Raising the cost of cars would increase money coming in on a per car basis, but would reduce sales (and reduce money coming in), so I do not see that happening in the near future.

Buying cheaper materials would reduce the amount spent on building the car, but could result in lower quality cars. Which would lower sales and reduce the money coming in.

Selling more cars would increase money in, but demand is at a low. Companies are announcing layoffs by the thousands. People are worried about keeping their jobs and feeding their family. They are going to be more likely to keep their old cars running than buy new cars. So sales are at a low.

Reduce the operating costs. The most viable option. Unfortunately, that usually results in people losing their jobs (I've been laid off twice this year, so please don't accuse me of being out of touch with workers). Reducing costs can create new jobs: someone has to keep the machines running. And there are other ways to reduce cost that do not involve cutting jobs (I would gladly have taken a pay cut rather or see my co-pays go up than loose my jobs).

How can a bailout help?
As mentioned earlier, it is not a solution; it only buys time. Hopefully, it will buy enough time that two things can happen:
1) Demand for cars increases. Selling more cars increases money coming in.
2) Operating costs can be reduced without cutting jobs. Machines that use less electricity, cheaper power from new sources (long term goal, not short term), reduced corporate spending, retooling factories to produce cars with greater demand, and some compromises with UAW.

Hopefully, I haven't picked sides. I was talking about possible solutions (some of them are probably unrealistic) and not blaming anyone for causing this mess. That is a different rant.

Good luck!!!
Minifridge1138 - nicely done to stay in the middle

6 Shooter - The big bat theory has gotten the union and the manufacturers where they are today. Teetering on no company and not a single job for any employees. Not a great result for anyone, in the long term!
ANY business that means to be successful puts together a cost analysis: cost of doing business ~ profits minus expenses ~ (Short version)

The bottom line in any Business Model is to continue to grow and prosper! Major, I mean BIG corporations have MBA’s, and other financial PHD type guru’s to study trends and future revenue streams, economic forecasts to help mold and give insight to update their Business Model. This Brain Trust provide the decision makers with all those charts and graph’s. Let’s not forget the figures they bounce around the Board Rooms that only the true Bean Counters understand. From all that Brain Trust and the fortitude to succeed, risks are taken and real Hands On business decisions are made. It may not be pretty, but the company lives or dies by these decisions.

On a lot smaller scale and as individuals we are responsible for our on weight gain, people we choose to associate with, type of home we live in, type of automobile we drive etc. . If our goals and objectives are not being met, or seem out of reach, we have choices. Do what needs to be done to accomplish our goals, e.g. more/better education, change career paths, “leverage” property to provide the scratch for the insatiable itch. Then there is “wish in one hand and _____ in the other” and see which one fills up first!! :eek They all come risk/reward, some are more desirable than others. (And most of us do this without the perception or aid of MBA's and PHD's, we are accountable for our decisions)

Pure speculation on my part ~ I bet General Motors is/has diversified and is much more that Just Detroit Iron. At one time I recall GM having corporate holdings and investments (auto and NON-auto related companies) in more than 20 Countries. I wonder if all GM’s holdings are on the cliff of failure.

Great discussion :thumbs
Life is NOT for the weak at HEART!

Rob, I cannot disagree with your argument that we need our automobile manufacturing capabilities. The thought of a foreign logo on our beloved Corvette is indeed repugnant. With full support for saving our companies, I must profoundly question the government's approach to that salvation. A quick look at the advertised "facts" should dispel any notion that a bailout will truly work.
The Big 3 requested $34 Billion to "tide" them over until the end of March. The math says that they have a burn rate of $11B/month. What does their business plan say about when they will become profitable and be able to pay back the loan? Figures quoted indicates that 2010 is a possibility. Assuming that is a good date, the price tag is now up another $165B or so. You have to ask if they will really be profitable then. Look back two years when times were good, full employment, growing wages, easy credit, etc., and they were still losing billions each year.
For the bailout to be even considered, the following questions have to be answered, not just with rhetoric but with fully sustainable facts. Also, stipulation must be put on the government oversight to prevent the companies from being strangled by the experts in our U.S. Congress.
1. When will the companies become profitable?
2. How many units must they sell to meet that goal?
3. When will the economy(i.e. employment) reach the level to absorb those units?
4. Assuming no more easy credit, how many buyers will be locked out of the market?
5. Will emissions and mileage requirements be relaxed until the market recovers?
6. Will the companies truly be allowed to build what the consumer wants or what the
government decrees?
7. Can three companies survive in the projected market given the number of units that
must be sold for them to survive?
8. If all the billions reqested do not achieve the desired results, who pays back the
"Bridge Loans" which can conceivably reach a half trillion dollars.
If someone can show me that X billion dollars over Y years equal three viable companies
with full payback of the loans, sign me up for the bailout. If it is just going to be a crapshoot, meet me in Vegas.

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