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MarketingTalk about “not getting it“:
If you’re going to go to the American people – during a recession, mind – with your hat in your hand, it’s probably best to fly coach. 31 comments to Marketing |
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Copyright © 2009 Neptunus Lex - All Rights Reserved |
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What, they couldn’t find a reliable car and driver to take them there? Or maybe taken AMTRAK?
Clueless, meet brain-dead.
And they wonder why the public loathes them so completely. With their massive bonuses, obscene salaries and all the other perks – and here we are thankful that gas prices have gone down while I continue to shell out gross amounts of money to put food on my table.
They want to put their hand in my pocket to bail out their sorry asses? Then they need to come to my house and tell me why.
I’m a GM car owner and I got an urgent e-mail from GM yesterday urging me to urge my Senator (who’s saying a loud NO) to realize the urgency of this urgent situation.
I tried to figure out how to tear up an e-mail, but settled on clicking it into the trash.
Various pundits have been saying we need to keep the Big Three around because, if we ever needed to build up out mechanized military, without their heavy manufacturing capabilities we simply wouldn’t be able to.
So I’m looking at all these Kenworths, Peterbilts, and Mack’s driving around and I’m wondering, they can’t build tanks and trucks?
– Max
How about this CEO as a role model?
http://ibnlive.in.com/videos/77452/jal-ceo-takes-a-pay-cut-flies-airline-out-of-turbulence.html
What, I missed the financial news where a quarter of actual measurable negative growth was followed by a second quarter of negative growth?
Words just don’t describe the anger. I actually believe before one American penny goes to any of the “Big Three”, Congress should have them back before them. Under oath, these men should be REQUIRED to explain EVERY detail of their contracts, their “golden parachutes” and any other relevant issue in their lives. We should do the same thing with the banks. This might just stem the tide of people taking this strategy.
ARGGHHH! An even grumpier,
Grumpy
I’m sure they cut back on their in flight wine selections to compensate.
Argh!!! I am so fed up with these bailouts. I got into a huge long argument with the aide who answered my Senator’s phone this morning.
After I told him I wanted Senator Feingold to vote against the bailout, he started hemming and hawing. I mentioned the fact that the CEO’s flew their private jets to the hearings and he said, “We don’t care about what the CEO’s are doing. We care about the jobs that will be lost in WI.”
Urgh! That got me even angrier!!!
After 20 minutes of angry back and forth, he finally said, “Ok, I give up. I’ll give the Senator your message.”
I am so upset about this whole thing.
Sigh.
dear bastidge … that two quarters of negative growth hasn’t happened yet, but you wouldn’t know it for all the wailing and gnashing of teeth among the ill-educated mainstream media, not to mention the even less educated Congress critters and their litters of eager Congressional aides..
I did a quick check on sidestep.com of airline flights out of Detroit and into the Washington area saw no options for an out-and-back where you need to be there all day. Unlike the old days it seems now the early AM departures don’t get you into DC early, they get you into a city where you layover for a few hours. Best arrival is 11:52AM. “Hello Senator, can you move the hearing back to the mid-afternoon? Oh, and make sure it ends by 4PM so I can catch a 6PM flight back.”
So now we get a hotel room – I mean rooms. I think these guys travel with a few staff because contrary to popular belief, it’s not all high tea and crumpets time for company CEOs and work must go on rather than re-reading that Patrick O’Brien novel in the boarding area while you wait the extra three hours for your delayed flight. (Hey, I resemble that remark!) Add up the ticket price, hotels, the cost of business services on the road, dead time in the airport, the probability of flight cancellation or delay, and the time savings of the company plane make some sense.
But it does look bad when blasted across the TV by the smug-and-pleased-to-find-something- to-hyperventilate-about Diane Sawyer.
Customers I worked with in the past have used executive jet transport when transporting a team because it ultimately saves money. Yes, time is money, no hotel rooms or road meals, and all can fly at the same time and if the meeting (or in this case, the beating) runs late it’s no big deal.
Don’t forget folks, unlike the banks this is a loan request. No one is selling cars – not Detroit, not Tokyo, not Seoul. So the fixed costs eat cash until credit frees up.
George V.
Is the apocalypse here? I mean, the closest thing I can think of to dogs and cats mating is when Mitt Romney and Robert Reich agree on what needs to be done with the auto industry.
Best idea I have heard was on Morning Joe — make Romney Obama’s auto czar. And the NY Times has a blueprint to follow:
George – fair points. I work at a Fortune 100 company and we do use our corporate jets for large groups as it does save on airfare and possible hotel needs.
But it is unseemly when the passengers in question are about to ask their government for a handout. They are in a no-win situation about the transportation thing – fly commercial and stay in hotels and hear about the cost of that on the news.
Ask me if I feel bad for them … I don’t. Grumpy got it right – these idiots should be required to justify every expense the company’s have made on anything and everything – including their own bonuses, salaries, perks – all the things that these people have their hands elbow-deep into.
When I screw up in my job – mismanage the budget or misuse company funds, whatever – I would lose that job. No one would step in and bail me out, offering me severance and protection of my financial future.
Why should these guys get more than that?
Kris,
Your job will not affect such as large sector of the economy as the three auto companies. I know this introduces the idea of “too big to fail” which I find somewhat repulsive. Auto companies have failed in the past and the republic has survived – but now we are talking about an entire sector and all it’s derivative industries and purchases – everything from pencils to supercomputers to hamburgers at the bar outside the plant gate.
Have there been mistakes – absolutely – and some are truly amazing. And there will be more in the future.
So, to make sure they never make those mistakes again, let them go down. But then we lose as many as 13 million jobs, which is what I have seen as estimates for the industry plus derivative jobs.
Bankruptcy? Not likely to suceed because who buys from a bankrupt manufacturer?
It’s sort of like the government propping up AIG except this is a loan not payment. If I recall correctly, a collapse of AIG means a collapse of pensions, retirement payouts, annuities and other losses which directly affect individuals. It’s not the AIG executive who are being salvaged – it’s the people who depend on AIG investments for their daily bread. At least that’s what I remember.
Now, letting a single company (like AIG) get to the “too big to fail” and too big for someone else to take over? Maybe that’s something to put in the regulatory grinder. Limit mergers and such.. but I stray from the topic.
George V.
Detroit learned nothing from the ’70’s – or chose to ignore the lessons and cater to the excessive consumer. Loaning the Big 3 money will not create demand for their products and it will certainly not reach the dealer level. Instead of propping up manufacturing and postponing inevitable failure, put the money in the hands of the consumer. Do something real to stimulate buying again like maybe a tax credit of say 20% of the purchase price of a new vehicle.
The mortgage bailout worked so well – the money was supposed to be used to buy up bad loans and restructure them so people on the brink could stay in their homes. The banks are sitting on the money and foreclosure rates continue to climb.
More of the same? No thanks.
I saw a teaser for a newscast on an American channel last night (not sure which one) that said something to the effect that “People aren’t buying because of the recession but there is a recession because people aren’t buying.”
The blurb actually offered to look at the role of the media in creating/perpetuating this mess. I about fell out of my chair, which wasn’t an easy thing to do seeing as how I was laying on the couch.
As far as The Big 3 go, I can only shake my head and mutter “Yeah, right”. Maybe it’s about to go looking for a new car…
I said it months ago: there is nothing sacred about the Big 3. They’ve always been a business, out to make a profit. Nothing altruistic in their mission $tatement$.
Let the market work it’s magic: business (making undesirable car$) fails; businesses making products consumers want come in.
I mean, nobody said we’d bail out the dot coms and their investors when that bubble burst. . .
George V,
We got into the current financial mess by letting GSE’s guarantee idiot bankers who made loans to people who would never ever be able to repay them and it looks as if you’re suggesting that we should do the same idiotic thing on a far grander scale?
It looks like the big 3 are hemorrhaging money to the tune of $2 billion a month at just GM and the proposed solution is to give them my money. I can’t think of one standard business practice any of these losers have adopted to cut their costs. Perks for management-unchanged. Workers pay- unchanged.
Raise prices to cover costs? Not that I know of.
Offered a product so good that they cannot keep it on the dealership lots? Nooooo, don’t think so.
They want $25B, but their market capitalization is about $7B. Why doesn’t the Treasury Dept. just buy them? Oh, it’s because they have these UAW balls and chains keeping them from moving forward.
Should be forced to go through bankruptcy. Then the pensions would revert to the Pension Benefit Guarantee Corp. Yeah, we taxpayers would be on the hook. But, only then would they even have a chance to succeed going forward.
Exit question: why are the jobs at US badged car plants so much more valuable to the economy than foreign badged car plants operating in the US?
“They want $25B, but their market capitalization is about $7B. Why doesn’t the Treasury Dept. just buy them?”…Treasury would be buying them from the existing shareholders, who would get all the money…the companies would have no additional money but would still have their debts.
Jobs at US badged car plants are more valuable (in the minds of politicians) than jobs at foreign-badged car plants because (a)there are probably more of them, and (b)they are represented more a well-organized lobbying force.
I like the Fark.com headline:
“The automaker bailout is like giving a shaky alcoholic another bottle. He’s gonna die eventually, you’re just postponing it. Cut him off and send him to rehab now.”
You know, there was a plan. A good plan. In fact, Ford made money in the first quarter this year.
Then metals prices doubled, which added thousands of dollars to the cost of making a vehicle, a cost which could not be passed along to the consumer. Then gas prices skyrocketed and folks stopped buying our most profitable vehicles. So we adapted and came up with a new plan. It hit everyone. That’s the way it goes.
Then the economy went to hell and folks stopped buying cars. All auto companies have been slammed in September and October. November is shaping up to be just as bad. In Europe, Opel is about to go under.
There are no loans available which the car companies normally would use for operations. Hence, they ask the government for a loan, not a handout, but a loan to be repaid with interest.
Midwatchcowboy, the US plants are more valuable because they represent US investment. For our plants, the R&D is done here in the US. The testing is done here in the US. The profits stay here in the US. As far as local economies go, any plant is helpful, regardless of who owns it. For the whole, I believe that the US owned plants are far more beneficial due to the reasons I stated above.
Big Three get no sympathy from me, and I’d much prefer they received $0.00 of my taxes.
Harley Davidson long ago overtook GM in market capitalization, and is not in the market for our money.
Why? They actually know what they’re doing. Having been rocked to their foundations by Japanese imports in the 60s, they adapted, invested and overcame. They did not whine and think the old days were – insert pixie dust here – coming back.
Let the Detroit parasites die the death they’ve brought upon themselves.
Bah!
Oh, well, it’ s all moot now. The Senate is not going to vote on it…
Someone above said something to the effect that “who buys cars from a bankrupt car manufacturer?” People do, and let me ask you, who flies on bankrupt airlines? People do, and the airlines emerge from bankruptcy, and back into eventual profitability. Bankruptcy is not equivalent to dissolution, though all these folks currently want you to believe it.
And bullnav, the Congress may not be going to vote on it yet, but they will after Bush leaves office and Obama takes over. Count on it. The Democrat machine will make sure of it.
A final note: Other car companies have failed and it wasn’t the end of civilization. Think Nash and Studebaker, both Midwestern companies. And we all survived, and some of us thrived.
Marianne, who is aided by a long memory …
It’s really hard to defend the “Big Three” for all their mis -steps over the years. The interesting question to ask is who could finance the “debtor in possession” (my understanding) financing required in a chapter 11 for the OEM and all the suppliers other than the federal government? Also, if the government were to provide a loan wouldn’t that be more productive than OEMs and Tiers filing chapter 11? The loan would be provided with continencies for massive restructuring, eliminating overcapacity, so that money isn’t required again in six months.
T0o big too fail? Possibly: Millions of jobs at stake. Globally, GM sold 9.3M in ‘07 — 3.0M more than Toyota.
Marianne..
and Hudson and Teraplane and Tucker and Packard and LaSalle and Kaiser and Frazer …also a long memory here..
: ))
Marianne, I still drive a ‘48 Kaiser in 4th of July parades and such. That company going south didn’t seem to be the end of the world, and for that matter I can still get spare parts. Amazing, that. Also gets about 28mpg. And safety? Like all automobiles it has crumple zones, it merely uses yours
Of course, I’m sure you are far too young to remember the Kaiser. Probably saw my ‘62 Thunderbird as a youth, perhaps.
I had an interesting thought. Remember when all taxpayers were given a few hundred dollars back as an economic incentive check? $700 billion is a lot of money. The Interstate Highway System has only cost about $500 billion since it was started in the 1950’s, to use a comparison.
Well, $700 billion divided by 300 million taxpayers is about $2 million dollars per for those 300 million taxpayers. So, instead of giving the money to AIG or Fanny May or Freddie Mac, give it to the dumb SOB who’s behind in his mortgage payments, the guy who’s making his credit card minimums, as well as folks like me who pay taxes and have little debt.
First thing we’re going to do is avoid paying taxes on it, which means paying off that mortgage we’re behind on. Second thing we’re going to do is pay off those credit cards and disconnect the blasted phone. Third thing we’re going to do is look to invest what remains, even if it’s in a CD at the local bank. Or perhaps in an annuity at AIG.
Money goes to the same firms, clears the taxpayers of debits, and it’s the taxpayers money being used for this paper-shuffling anyway…
I can’t see a down-side, ‘cept I might have something to retire on other than Social Security if I wasn’t a dumb-ass financially in the first place.
– Max
So…turn record profits, provide jobs and pump money into the US economy on a grand scale and get called on the carpet in front of Congress as a favorite whipping boy each quarter as those profits are announced.
Or, run your business into the ground following decades of mismanagement, union excess, poor product planning and the inability to meet competitive benchmarks wrt quality, cost and performance, and go before that same Congress wiht arms extended to rake in your share of the bailout-pa-looza.
And we wonder why the big oil types are a mite testy…
Indy -
In the current scenario, using H-D as a ‘good example’ is probably not the best idea. In the early ’80’s they were the ones asking our guvmint to put import restrictions in the form of tariffs on japanese import bikes over 700 cc, complaining that they were unable to compete in the marketplace with the popularity of japanese cruiser bikes. Which is why you’ll see 700 cc Hondas/Yamahas from the early ’80’s on the road. And this while the bikes they sold at that time were equipped with japanese-manufactured carbs (remember them?), forks, and instrumentation.
You can probably tell that I’m not a big Harley fan.
I’m with bullnav on this one. The foreign makes with local plants = good (sort of) for the locals, but in the long run it doesn’t help our national industrial base. To be sure there is overhead that can and should be trimmed in order to effect efficiencies (and GM is probably the worst in that regard), but those who proclaim that the Big 3 haven’t learned anything from the 70’s haven’t, well, driven an X-car or Pinto or Cordoba (”with real corrrrrinthian leather”) anytime in the recent past. And as much as I love the 67-70 Mustangs, I infinitely prefer my ‘07 for regular driving instead.
Interesting book I read sometime back (when Demming was all the rage for Navy back in the day…) that catalogued the comeback of the American auto industry during the ’80s and early 90’s. Called Comeback: The Fall and Rise of the American Auto Industry it lays out the hard decisions and substantive investments made to put the industry back on its feet as well as providing insight into one of those industries that affects all of us but of which so few of us know about beyond the product we use. I’d recommend it to folks today as well.
- SJS