The Auto Companies Bailout

RIDICULOUS!! Just like the AIG and Wall Street, this is crazy. LET THEM FAIL or go into Bankruptcy. That is what it is for.....REORGANIZATION. Now for those of you who think that I just do not understand how the big guys work since most of my career has been helping the little guys, the principles are the same. They are out of touch with reality, they are in cahoots with the UAW and they think they are above the law (law of supply and demand). Rubbish. The principles of honesty, integrity, less is better and a living wage still apply.

Here is what should happen:

1. The regular, hourly employees make too much. Their wages are far higher than average America. Do not cut their wages but FREEZE them for at least three years. If the UAW won't go along, let the workers vote to keep their jobs or not.
2. Simultaneously, stop making cars so fast. Either slow the line down and/or work less hours. Keeping their jobs and benefits would be better than no job at all.
3. Reduce finished product inventories. Move cars around the dealers rather than continuing production. Make what sells. If people want particular cars or really big ones, get in line. Remember when you "ordered" a car and it was a big deal to order it and wait. It was fun. If someone does not want what is in inventory, order it OR find it at another place.
4. Eliminate about 5 layers of management, especially top management. Really. It appears that the guys at the top have forgotten who they work for. Because shareholders are so diluted today because of millions and millions of shares outstanding, the guys at the top do not have to really face the shareholders so they say "screw them". We will use their money to pay for our corporate jet.
5. For the next 3 to 5 years set the maximum pay for the top guy at say $1,000,000. Now, even if your house payment if $25,000 per month, you should be able to live on a million. Then set the maximum for any other officer at half that. Reduce Directors fees to say $5000 per meeting, etc.
6. Virtually eliminate perquisites. Come on. These are tough times. Perks are supposed to be for when things are great. No planes, trains and only cheap automobiles. No Chauffeurs UNLESS they are used to car pool I am serious. Figure out ways of doing ONLY the essentials.

Remember when Lee Iaccoca went to Congress for money? A whopping $1 Billion at the time. He took no salary, lived and acted frugally and made money after Chrysler became wildly profitable, had great new ideas and everyone in the company had learned to live on what the company could make. Eventually, everyone did fine and he paid back the money not on time, ahead of time. Now I know that the CEO"s of GM and Chrysler have both agreed to be paid $1 this year. However the CEO of Ford said his $9 million was "where is should be". Maybe but I doubt it. Remember, Ford went through tough times before GM and Chrysler (because Chrysler was being propped up by Daimler Benz).

Remember it is not $25 Billion they want. It is $50 Billion. They already have $25 Billion from the Department of Energy for re-tooling to Hybrids. They want ANOTHER $25 Billion. No way. Let them file for bankruptcy protection and see what the court requires them to do in order to reorganize. Just what we need is for government to determine how they succeed. Let me go up there and run Chrysler, they will be profitable next year!!!

What do you think?

Number 5, Let the Title Begin

After some time in your business or if the heir apparent has obtained great experience somewhere eles and is coming into the business, give them a title that will let everyone know who the heir apparent is. For two reasons:
1. If you have other high level managers in the business and you know that they are not likely to become the President (top guy), you let them know so that they can either decide to stay knowing that they are not the choice OR they can go somewhere else. If they are really valuable people and you do not want them to go, tell them that. If they decide to go anyway, help them in their search by being a reference and continuing to have confidence in them.
2. People need to know what is going on and the heir apparent needs to gain the authority to go along with the responsibility of the job. Do not phase them into the job. You should have already done that in their training or experience. They either are or they are not. You will know soon enough if they get the big head over the title. If they do flaunt their position, demote them or terminate them. A very little of the big head can destroy years of building a business. Have the guts to tell them what you see and ask them(tell them) to stop and change. If they suddenly won't fwork or don't think that they should have to work as hard as everyone else, you have made the wrong choice. Now do not make the mistake of mistaking delegation for not working. Your heir apparent may be a better delegator than you are and he may have other priorities. Evaluate that BEFORE you promote him. A good delegator is usually a good manager with forward thinking and strategic mindedness.

So, give 'em the title and set them up to succeed. If their significance gets tied up in their title, they are the wrong person for the job and change it. NOW!

What do you think?

Veterans Day

Earlier today I sent an e-mail that I had received from a friend from church in which it reminds us tht we have our freedoms not because of the people performing that freedom but because of the veterans who have insured our freedom from tyranny over the years. I sent this e-mail to people I know who have sons and daughters in the military right now in a feeble attempt to say thank you.

In our church, we had a couple both of whom were Dentists. We had their daughter in Sunday School. When the Iraq war started, they sold their practice and both joined the military and both have served together and separately in Iraq and Afghanistan. I am so proud to know them and their commitment to our country. When they left, our church prayed over them and I am glad that we did.

My son, who is a surgeon, just left the military in July. He was deployed to Kyrgyzstan. Even though he was not in the main battle theatre, it was a scary time for him and for us. But, he wanted to go. His education was provided by the military and he felt and obligation to serve. Secondly, he wanted to have been where he could help. I am proud of him for being a soldier and willing to protect our freedoms.

God Bless America and God Bless our Vets! What do you think?

Number 4 is for Sales and Marketing

Well, Well. This may be the toughest one. Your heir apparent must "carry the bag' or, in other words, must be in or have experience selling. Not Marketing, selling. What is the difference. Selling is going out and talking to customers face to face or on the telephone with the objective of building a relationship and SELLING them your product or service. Marketing is the effort to inform the world of who you are and what your products are via brochures, ads, training/education and most significantly, is planned. How are you going to get to the market you are after. I have asked this question of all the companies that I have consulted with. Most had not idea except the same ol', same ol'.

If possible, I would suggest that the Strategic Planning effort include the basics for the Marketing Plan. Having your heir involved with Strategic Planning and Marketing and then, actually, selling is the best possible experience and will provide them with the "global" view of your buisness that you have, probably, always had. They may not want to do it, but make them. NO matter what! I promise that it will be the single best thing you do for them in their training.

Number 3 in the series

I was caught between wanting to get this blog caught up and commenting on the Mr. Obamas first news conference yesterday (November 7). The fact is that I saw a different Mr. Obama. Perhaps for show, but I saw him as well organized, decisive and prepared. A reporter asked him about his security briefing the previous day and wanted to know what he might have learned. He told the reporter directly that he did learn somethings and no he would not discuss any of it. Period! When they asked him about an economic stimulus package this year or next, he said he would like to see it this year but this country has only one President at a time and right now it is George Bush so it was in his court; and it is. In typical, liberal reporter style, they asked him about his input into who will be his Senatorial successor. He said it was not any of his business it was the Illinois Governors call. Right on man, keep it up!

Now for number 3 on preparing your successor in a small or family owned business. In number 3 in the earlier blog, I indicated that the heir apparent should would in all functions/departments within the company and be paid accordingly. They may be good at sales or accounting or productioon or other functions, but if they are going to manage when you leave, back off or retire, they need to appreciate the fact that it takes all the departments working together to get the job done. Probably the biggest thing to remember is that what you do to keep track of your business, your heir needs to do too. They may do it differently, but they will do it on some basis, or they should.

In my experience there are two major battles to deal with.
1. Sales people think that they are far and away the most important aspect to the business. To some extent they are. No sales, no business. However, if you had all the sales in the world and no accounting, no production/purchasing, etc., so what! It takes everyone. After saying all that, no one should ever run a company, in my opinion, with having "carried the bag" so to speak or, in other words, have ACTUAL selling experience. This is especially true if your sales people travel. Travelling and selling on the road is not the glamorous job everyone thinks it is. I know. I had over 200,000 miles in the air one year.
2. Accounting people tend to be "bean counters" and are viewed as disruptive to the business. The heir needs to understand a balance sheet and P&L aw well as the accounting people, in my view. I am not an accountant but I bet I understand and know the ins and outs of accounting better than most accountants. Not because of formal training necessarily, but because of EXPERIENCE. Proper accounting is of monumental importance. And, if you are large enough, the Sarbanes/Oxley Act requires controls and a CFO position and that is good.

So make them work in all departments. If they don't want to, they are not the heir apparent. They do not have to like it, but they have to do it.

What do you think?

Wew! The election is over!

Well it is over. Obama has won, unfortunately. However, I will support Mr. Obama as our new President and pray for him regularly. (He needs the prayer and I need the practice!)

As I have mentioned in this blog before, there is really very little a President can do without the approval of Congress. Of course, in Obamas case, the Democrats have a majority so he can, hopefully, make good on his promises. My personal opinion is that if you think spending was great under Bush, hold on!

The enormity of the task and the shear power of the position will, in all likelihood, cause Obama to surround himself with competent staff. Again, hopefully, he will not fill his staff with yes men. My personal opinion is that he will do that. His campaign was very well organized and very well run. Probably not by him, but by his selections to run the campaign. That is a good sign because he delegated responsibility and granted necessary authority to his head honchos. No President can succeed without that.

Thanks for stopping in and I would like to know what you think. Respond where it says "comments" below or e-mail me at dennispcarey@yahoo.com.