Home > economy, events, politics, wall street > Memo to the Rescued Big Two: Roll With The Punches

Memo to the Rescued Big Two: Roll With The Punches

2368332708_0b38230994_b1. Make the hard choices and model the discipline of your fiercest competitors (aka the Japanese and her rising star siblings).  Say no to mediocre products and unnecessary projects (and don’t apologize).  There is a reason Ford didn’t have to much participate in this ugly begging fest we all witnessed on Capitol Hill.  No one builds nicer cars than GM, but no one has more redundancy either.  It might just be in GM’s best interest to make that trip out to the dumpster with a few worn out brands in hand.  Too many irons in the fire and the hot ones cool.

Everyone realizes that Washington is going to see to it that Union workers on the factory floor get less fluff and a dimmer future as a net result of this deal.  But it can’t stop there.  If your white collar troops don’t like participating in the pay cuts and concessions, let them go out into the flourishing job market and find cushy jobs elsewhere that pay gold.  And if they exit, don’t pay them for two years while they are out eternally interviewing to no avail. 

One more thing, stop building twice as many vehicles than the market is calling for—trade padding your quarterly earnings statements for doing business the right way.  The days of keeping vacant lots full of vehicles no one is buying never have made sense.    

2. Know the culture of Washington. Your companies will be interacting with them for the rest of your existence, and now even moreso with their paws on more cookies in your cookie jar.  I have merely been to DC as a visitor and I understand this: You can pander to the American people and the media in your efforts to sway public opinion, but it will only backfire if what you propose isn’t good for government.  They’ll ‘help’ your industry if it helps them.  Period.  Your proposal has to score Big Government points with its constituents (i.e. ‘green jobs’)—or expand its growing social agenda (it is worth noting that the lines are as blurred as ever between fiscally responsible and irresponsible policies and government sanctioned measures). 

Essentially, a vibrant Wall Street equates to a vibrant Washington.  Face it, Johnny Banker gives more contributions to the greasy politicians and provides a nice tax contribution by doing what he does best.  The guys in pinstripes have played the game better than Joe Car Guy.  ‘Pay to play’ might be taboo in Illinois, but it is alive and well in DC.    The bottom line here is clear: If what you offer doesn’t pad a politicians’ pockets or afford him political traction, he and his contemporaries will let you starve to death (our atrocious trade policies and agreements are exhibit one). 

So, stop whining about the double standards lawmakers in Washington have exercised in dealing with both your industry and the banking industry.  It will get you nothing compared to what the high rollers on Wall Street are getting out of this mess, as we have seen so vividly.  Complaining may even get you less.  The playing field is what it is. 

3. Quit trying to be larger at all costs.  The government hates competition (unless you share the same bed of course, and even then, they only tolerate you).  Get rid of your show off nameplates, as well as those that have consistently underperformed and weighed you down—the ones that do nothing other than hinder your company from being efficient and nimble enough to turn on the shrinking dime in Detroit.  Continue to solidify and satisfy your customer base and accept the reality that the good ol’ days of fighting over market share, are now, a faded memory. 

What has been squandered won’t be recovered, but what remains can be saved if you are willing to unload what you have been trying to hold on to.  Basically, stop the madness.  You have been killing yourselves.  Hangover legacy costs are one thing, remaining egos are another.  Look in the mirror.  Some vain things need to be sacrificed on the altar of the greater good.  As Jack Welch has said, ‘Change or die’.

4. Pay those who pay your bills more than lip service.  Take notice and better care of those outside of the boardroom as if your life depends on them—because it does.  Recommit with laser-like focus to your shrinking dealer body and customer base and deliver great cars and services in relation to those vehicles in the immediate days to follow.  Get out of all business ventures that don’t revolve around those simple priorities.  

It’s obvious that the quality vehicles you are already producing today are no doubt under appreciated, but a large segment of the American people still have an appetite for buying ‘domestic’ (even though there is no longer a strictly American car company).  Don’t discount that, or fail to exploit it.  The days of hoping a Malibu can compete with a car its no match for are over.  Pick battles you can win, get out of the rest.   

5. Don’t ignore the obvious.  Refuse to pay attention to the fact that gas prices are currently as low as a snakes belly in a wagon rut.  It’s merely a mirage, don’t bite.  The imports won’t. 

Any future for Detroit will be on the backs of strong-willed and bold leaders who can wield a sword intent on slaying a mindset steeped in bureaucracy—a mindset entrenched in outdated thinking and practice.  Its the kind of thing that has long outlived its lifespan in The Motor City.  The Ford family owned Detroit Lions with their consistent losing ways should be proof enough that its time for more change in Detroit, and that if we hope to even survive—we’d better get the stomach for more hard choices.

The lessons of yesterday are countless.  Protecting reputations while neglecting to be innovative and smart have cost the Big Three plenty, defending practices that have seen their day has proved insane, and rewarding failure hasn’t worked.  If the CEO’s are worth a fraction of their paychecks, they will pass on doing whats best for their own job security and personal interests and do what’s best for the companies they have been entrusted with.   

Acknowledge it or not—you surely have inherited this disaster, but this is no time to point fingers.  It’s time to roll with the punches.

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