Thursday, November 20, 2008

Hey GM, Hire Me!

Hey GM! Guess what? That 14 million dollars you paid your CEO Rick Wagoner last year? You might as well handed out that money to everyone who was unfortunate enough to buy one of your cars because what has he done to earn that money? Send you into bankruptcy? I have an idea, hire me instead.

By the way, that 14 million dollars per year could have been used to pay 400 workers 35,000 per year. See, it's all about dollars and sense!

I guarantee I could run any of the big three automakers better than the guys who are running them now. First off, I would save them 13 million dollars per year right off the bat as I would only require a 1 million dollar salary (I know, it sounds like a lot but I would have to live in Detroit, that's worth at least 500G). How could I do worse? What's the worst that could happen, you go bankrupt?? Well, that's what 14 million dollars a year and private jets is getting you now so why not try?

Here's your problems:

A. Your Corporate brass makes too much money and they apparently don't earn what they make and don't know how to run an auto business. Yes, the CEO of Porsche tops the auto industry in compensation but he knows how to make and market cars and his company is profitable so he deserves it. If fact, if you don't hire me, hire him! But when you look at Japanese companies, the ones who are really kicking your ass, they don't make nearly as much as the top executives at the big three.

B. Your workers make too much money. I agree that a janitor or button pusher at one of your plants doesn't need to make $50,000 plus full pension and medical benefits. Not in the global economy. That being said, workers in Japan and Germany and even workers of foreign auto companies in the US make living wages.

C. You are competing against companies which come from countries whose governments tax the rich CEOs in order to provide health care for everyone. If you were smart, you would stop taking marching orders from the oil industry and start taking them from the people who are lobbying for Universal Health Care. In fact, instead of paying lobbyist to convince congress not to enforce fuel economy and safety standards, have them lobby for Universal Healthcare which could eliminate 11 Billion dollars of health care expense for the industry as a whole. Duh!

D. One of your biggest expenses is health care for working and retired individuals. For Honda, every vehicle sold costs the company approximately $107 in pension and health payments. But for General Motors, the cost is approximately $1,360. Again, your biggest lobbying push should be for Universal Health Care and I am not talking about Obama's lame plan.

E. You suck at making cars. You used to be good at that and made tanks and munitions during WW11 even better; you know, when the government was telling you what to do. I admit, since the mid 90's the quality of your cars has improved and is up there with most European cars yet still can't top Toyota and Honda or their luxury lines. In essence, hire better designers and engineers, make a better product and when you get rated at the top of the reliability indexes, your resale values will go up, your warranty liabilities will go down, you will have fewer recalls and you will sell more cars as they will have more value. People want value. Hire Toyota's engineers! When the Colts couldn't get past the Patriots they hired Vinatieri away from New England; same concept.

F. You make cars nobody wants. Instead of looking at what sells throughout the world, you stubbornly make the same cars over and over again. Sure, the Minivan, the SUV were both great when gas was $1.30 a gallon but it's the 21st century, time for something new. There is only a shortage of ideas not a shortage of consumers. Sure, everyone could already listen to high quality, portable music but the Ipod came along, made it easier and more efficient and changed everything. You need to make the next Ipod. Hire some young, hippy, pot head, computer geek, kids from California to design your cars, they'll come up with something.

G. You can't sell these cars nobody wants. Hire a marketing department or a better ad agency or Don Draper even. Don't bitch about how nobody wants to by your Hummers anymore. Do you have salesman? Do you have a marketing department? Look at VW ads compared to the ads of the big 3. VW created a market for their cars. They went to young, educated, white urban dewllers with a little cash and said our cars are cool and you will buy them, and guess what they bought them. For the most part you let local market auto dealers do your advertising for you. Typically these commercials are done in someone's living room and consist of some guy jumping around talking about financing and as his voice echoes, you see about 9 of the cars they are trying to all sell driving sideways with weird camera angles. Not exactly, "you had me at hello". Selling your product is half of the ball game. So, no one wants your cars? Convince them they need it. Always Be Closing! So, nobody wants to buy the same brand you have been selling for the last 70 years? Trash it, come up with a new car. No one wants to tell their first date they drive an Oldsmobile or Mercury! Do consumers say they don't need a new car, well the people who bought the Iphone didn't need a new phone but they still bought an Iphone. In fact, the Iphones don't really work all that well but they are still flying off the shelves because they are new and add "value" to peoples lives. If European cars are selling, make cars that look like European cars instead of just buying those companies who make them and continuing to make your same old bullshit. You did this with the Taurus in the 80s, you can do it again. If Japanese cars are selling, make cars that can compete with those. If luxury and top of the line sports cars are selling, if Porsche is the most profitable company out there, guess what kinds of cars you need to be making and selling?

I do admit, I love the throw back muscle cars like the Mustang, Challenger and especially the Camaro, that’s the innovation I am talking about but I think you can see the problem with making a new 8 cylinder Muscle car with 450 HP when gas is $4.00 per gallon and the economy sucks. Porsche, however, manages to make high end "muscle" cars with 4 and 6 cylinders and would blow the doors off your GTOs, or V8 Challenger or Charger. It’s not that people aren't buying cars, they just aren't buying your cars! Guess what, the economy is never bad for rich people, you know this, you are the rich people. You buy luxury shit all the time no matter how bad the economy is. You need recession proof automobiles! Luxury cars are just that.

Penetrate new markets! Sure, you have the redneck, grandparent and gang banger market cornered but when was the last time a gay guy, yuppie, young JAP or hippy bought one of your cars? Make cars for people who live in the city since that's where the majority of consumers live. Sure the Focus was a good effort but I would still rather drive a Jetta.

H. You gambled your employee pensions away in the stock market. Ever hear of CDs or bank interest? Good thing we didn't do this with Social Security. Again, the difference between the free market and regulation. Don't do that again.

I. You put all your eggs into the SUV basket while Toyota and Honda were developing small fuel efficient hybrids and even hydrogen fuel cell vehicles, AKA cars people want. When gas went up to $4.00 a gallon guess what happened to your market? It didn't take a psychic to see that coming. We did invade a country that had the third largest oil reserves in the world.

J. You should also use those lobbyist to keep imports from getting into the country or at least get them to even the playing field for US made products. For example, by the year 2000, Korea exported more than 400,000 cars per year into the United States but only imported 739 American made cars. Since 2003, Korea’s imports on foreign cars has tripled to almost 54,000, only 6,235 were made by the big 3. Is this what they are calling free trade? With the kind of numbers you are asking for, I would hardly call it free.

And let's get this straight; It's not the Unions fault that you are running out of money. Now, they did get greedy and lazy in the late 70's and early 80's but they are not the reason you are in the situation have created. The United Auto Workers Union was founded in 1935. If the Unions were the cause of all your woes you would have went belly up years ago. Germany, Italy, Japan and Britain all have to deal with Unions. Now, you could say that the big 3 suck at negotiating as much as they suck at making cars but the Auto Union members were never going to go work for a different Big 3 or go to some other country to work. You were still the only game in town for these workers but that's something you apparently failed to realize.

Don't go to congress with your hands out when you personally make millions of dollars per year and got there on a private jet. This is the stupidity I am talking about.

All this being said, we have no problem loaning you money. Loaning. I would rather give it to an industry which provides 10% of all US jobs than give it to rich people on Wall Street who thought it was a good idea to give loans to homeless people. We helped out Chrysler about 30 years ago and they came up with the mini-van and paid their loans back early. I have no problem with this it's just I don't know if we really trust you to do the right or smart thing in this situation. Maybe there is too much competition. Maybe we should close the doors on Korea and let the big 3 become the big 2 making them leaner and meaner and allowing them to share more technology between them and cutting executive pay rolls by a third. Chrysler is private so it wouldn't really hurt the stock market as much to let them go as it would GM or Ford. I just hope they let GM make the Dodge Challenger.

So, Ford, GM, doesn't this sound like a better plan than what Rick Wagoner came up with? Begging! I have identified almost all of your main problems and have suggested some solutions as to how I would fix them. Wouldn't you want to cut 13 million in costs overnight? If so, hire me. I promise, I will at least do better than the schmucks you got in there now. How could I be worse?


Pasadena Closet Conservative said...

Excellent analysis. If the visionary auto makers of the early 20th century had been told that this would be happening 100 years later, they never would have believed it. Nor stood for it.

Patrick M said...

Wow. I'm almost impressed.

(almost because it's you)

I still think you focus on the CEO salaries a little too much, as they are mostly a symptom of the problem and not the actual problem - the loss of a competitive drive.

And as for the pension plan vs Social Security: I'd rather have the pension. There's a chance that will still be there when I retire.

The big question, though, is, "Will Obama get the bailout right when he gets into office, or will it become the nationalization of the car companies by throwing money at the problem?"

dmarks said...

A pretty good post. I am working on one like it.

But I don't agree that destroying health care (by making the government control it all) is the answer.

Ali said...

What happened to the invention called "Public Transportation" that doesn't exist in today's America. What a shame that American tax money is being spent on corrupted GMs while that bailout money can fix the eductaion and healthcare systems in America.

SarahB said...

The least the CEOs can do is pretend to care and present some kind of plan to congress for how they will use the money we LOAN them...they don't give out small business loans without a business plan. Imagine that - running the auto companies like they are competitive businesses!

Ali said...

Do you know that if the Auto Industry goes down and the 3 major companies file for bankrupcy, America will be in a major Depression! These companies hire more than 500,000 Ameircans across the US. We hate bailing them out but we have to.

Toad734 said...

Sarah / Ali:

Yes this has to be a two part plan. I was completely against the AIG and other financial institution bail outs but the auto industry accounts for 10% of all jobs in the US so yes, it needs to be rescued but with conditions which Girlfriend eluded to.

Thats what this post is about, it can be the new business plan, or at least the identification of the problems which is where a new business plan would have to start.

It's funny, on my day off, I saw back to the future. When Doc comes back from the future he uses banana peels and garbage to fuel his car. Willy Nelsons tour van runs on essentially the same thing in liquid form; who would have guessed that we could come so close to that prediction but we are not there yet, why not? Me thinks it has something to do with the oil industry. This is the type of innovation we need from Detroit, not cameras on the back of vehicles which are too big to be on the road to begin with. And does anyone really give a shit about Onstar?

Enemy of the Republic said...

So we are bailing out those jerks who caused their own demise through greed, stupidity and yes--making cars no one wants or really need. This is an excellent post on why we shouldn't bail them out--I've called and written my congressmen and senators, but this is taxation without representation. We exist every 2 years when there is an election and on April 15th when we pay our taxes.

The Man said...

Patrick said....
Because Toad can't play by the rules, comment moderation will be on until I close comments on this post. If you want to complain about moderation, visit his site and give him shit

TAO said...

So, you are applying for the CAR CZAR Job...

Your first task would be to cut the number of brands in half...

Which would you keep and why...

Toad734 said...

I really think I would let Ford and GM split up Chrysler. They are not Public and make even fewer cars people want than the other two.

We don't need a buick and Oldsmobile for instance. Scrap Lincoln and continue with Cadillac

I would obviously have to look at what was selling vs. what wasn't. And agian, its about creating and marketing it more than simply eliminating brands that don't sell.

But, you keep the ones that you see everywhere and for Chrysler, the brands that you see and like are the following:

Entire Jeep line
Chrysler 300
Town and Country Minivan or a Dodge Minivan
Dodge Viper
Dodge Challenger (hell Ill take one)
Dodge Charger
Dodge Ram
Perhaps the Neon because its small and afordable

No one cares about Sebring and all that other shit, just scrap it.


Ford needs to dump Lincoln and Mercury completely and expand the Mazda line although the two brands that are selling, Mazda and Volvo, Ford is selling off (because they are the only brands anyone would buy) Why do they need a Edge, Escape and Explorer, Expidition, etc? Just stick with the Escape and Escape Hybrids. Keep the Focus (number 2 car in Europe), F-150, Mustand and perhaps the Fusion (but give it some balls) but change that cheesy fucking grill.


Keep the Corvette
Nobody but cops drives and Impala and I think nobody drives, or wants to drive a malibu. Again, why do we need a Suburban, Trailblazer, Traverse, Tahoe and Equinox? And whats a Chevy Colorado?? Ever hear of it?? Again, bad marketing.

GMC alone has 12 different trucks and SUVS, 8 SUVs. Add that to the 5 SUVS from Chevy. And why is Cadillac making trucks?

Im on the fence with what to do with Pontiac and Buick. A couple of the newer Pontiacs are cool, for the first time in 40 years. And I guess old people that don't have a lot of money will still buy Buicks and buicks have traditionally be well built cars from what I know about them.
Too many brands making essentially the same vehicle but with different parts. The door panels, seats and stuff like that should be the same in almost all of these vehicles to cut down engineering, manufacuring costs and waste.

Its not really about the old brands, they need new ones, sure they came up with Saturn a few years ago can can you tell the differnece between the Saturn Sky and Pontiac Solstice? And its time for Pontiac to get a new logo. Again, they need to reinvent and sell the brand.

Anonymous said...

I think the republicans scrapped the bailout so that bush can come in and save the auto industry as one of hi last acts in office.

EurydiceSeven said...

Let's throw some bailout money at more light rail transit :-) Not cars that no one wants to buy.

Anonymous said...

You are an idiot and clearly know nothing about running a business, much less in the auto industry.

Toad734 said...

Oh ya but you do. And by the way, its not like the guys running it now know anything. I certainly couldn't be worse.

And what am I so wrong about?