BrandToBeDetermined

American Auto Industry MUST Restructure

A local auto dealer has an opinion piece in the Chronicle titled "Extend bridge loan to GM or the country will suffer" in support of an auto bailout. General Motors is using Paulson scare tactics with their "GM Facts and Fiction - GM Tells It Like It Is" site. From a PR perspective they lose ALL authenticity when they state things like:

And, due to supplier bankruptcies, domestic automobile production would most likely fall to zero, even by international producers.

Really? Toyotoa and Honda who make cars profitably in the US will shut down as well? You lose ALL credibility taking such extreme positions. The Chron also has a great counterpoint on letting the automakers fail.

One article I read recently stated "US Auto Makers don't have a problem, US Owned Auto Makers have a problem." This is true.

The elephants in the room? Leadership and Labor. Labor says they have ruled out helping with the current crisis. If they won't even help themselves, why should we?

Here is the thing. High wages, 100% paid health benefits and a pension are things that the rest of America does NOT get. To ask American's to pay for your health care and pension is effectively using our tax dollars for your socialized benefits. Great for them, but not for my kids. The stats are painful:

...the average Big Three auto worker is paid more than $72 per hour in wages and benefits ($150,000 per year, compared to $48 per hour, or $100,000, for a Toyota worker), and where union-negotiated work rules such as "job banks," a cute little euphemism for paying large numbers of employees not to work, are commonplace.

The counter point from a left leaning blog states on unions and auto manufacturer woes:

Unions do not deserve the blame placed on them by the right wing. In fact, unions have repeatedly made concessions to auto executives over recent years. Contrary to Kyl’s claim, new auto employees earn $25.65 an hour.

Did you see it? The part where they say "new auto employees". Employees who have been there a long time, the majority of them, still receive the $72 an hour in wages and benefits. UAW remains in denial - your success is tied directly to the success of the company.

How do we SOLVE the problem of the US Auto Manufacturers. A common sense blueprint:

1. Bankruptcy Reorganization - this is a necessary legal first step.
2. Eliminate the current executive team for the companies with pragmatists.
   1. Clawback provisions for all bonuses given in any year they did not make a profit. The goal of business is to make a profit. If you don't do that you failed. So be accountable.
   2. Renegotiate all management contracts for those you want to keep.
   3. Eliminate golden parachutes - no pay for failure.
3. Replace the UAW leadership which has is not doing the membership any favors.
4. Restructure employee contracts to:
   1. Pay for work only. No more job banks period. You work, you get paid. That's it.
   2. Pensions - reduce valuation on current obligations. New employees on self funded pensions or 401ks with minimum matching. We all know the auto worker pensions is going to roll over to the taxpayers anyway so do it now with as much transparency as possible, but also a lower payout.
   3. Eliminate job security - you have a right to work. And you have a right to lose your job if the company fails (see 2.1 above). This will make employees hold management accountable to innovate. And coincidentally its the deal almost every other worker in America has. We work, we get paid, nothing is guaranteed. Sorry. Life's not fair.
   4. Reduce average pay for ALL employees from $72 to $40 per hour. This brings compensation into line with American workers working for Toyota or Honda in the US.
   5. Employees pay 50% of all healthcare. If an employee does not participate in the expense they have no incentive to minimize costs.
   6. Stop lobbying AGAINST energy independence and higher fuel efficiency vehicles. This position is literally Anti-American. Our bailout dollars to lobbyists arguing against the long term health of our country is completely unacceptable.

Do I want the United States to retain its strong manufacturing base? Absolutely!

I am not against financial assistance of auto manufacturers, but first they must make the hard decisions that every other business makes. The days of CEOs coming in, giving the union everything they want, dancing off with their golden parachutes leaving the next one to "solve the problem" are over. Step up, be accountable, get it done.

Do I understand that unemployed workers are bad? That real families are hurt, that the struggle to find a new job is very difficult and that bankruptcy would irrevocably change the entire landscape of Detroit? Yes. Just as 9-11 changed the world, so too does this change everything. I wish it wasn't the case. But it is. May you live in interesting times.

Solution 1: New Management. New Lower Cost Contracts. No Guarantees. Build Good Cars.

Do that.

The photo? Bob Lutz speaking to the PRSA International Conference. To one question he stated "Bankruptcy is not an option for GM" - sorry Bob, but it is. The GM leadership team has led the company down the path of the unthinkable. And this is what it looks like.

Economic Bailout and Impending DOOM!

Chase Tower North View
Originally uploaded by eschipul

Saw this post on twitter of Peter Finch from the Movie Network - "I don't have to tell you things are bad; everybody knows things are bad..." and that is pretty much how I feel.

The stocks are crushed and the only solution (we are told) is to give 700 Billion to wall street bankers. We have a bailout tracker and npr states.

The Bush economic team has been saying for weeks that the financial world as we know it would end if a rescue plan was not put in place in short order.

And after record losses by points on the stock exchange yesterday, today we hear they may have a new plan and stocks are rebounding this morning. Banks are being rescued and purchased.

And while all of this is going on, well, we are getting angry. Really angry. But it is a very hard anger to direct. And for the euphemistically named "main street" where we all live, we don't quite see the problem yet.

No really, so all of the investment bankers are going broke. OK, so if we went out of business I'd be broke. Nobody bails me out, and I don't even have a home in the Hamptons like they do! What is with the double standard?

Tightening of the credit markets you say? That we won't be able to get a home loan or a car loan or a business loan on inventory! Well gee, those are all ASSET BACKED LOANS. What makes you think banks will stop doing that? And if so, give me a bill in congress that insures direct to consumer and direct to business loans.

The Republican 700 Billion Tax Increase of 2008

last glimmer in miami
Originally uploaded by eschipul

We are witnessing the biggest tax increase in American history.

The President is advocating a 700 Billion tax increase to be under the control of Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. Rushing in fact. Urgent.

Let me repeat that - the biggest tax increase in history is being pushed forward by George Bush in the form of a 700 Billion bailout of wall street.

The blame for this 700 Billion tax increase is left clearly at the feet of Phil Gram, an Aggie, like me. Which is embarrassing. But facts are facts, and as we say in Aggieland "an Aggie does not lie, cheat, or steal or tolerate those who do."  That said, Phil did not act alone. But his lone actions could have prevented this.

So while I don't understand all of the subtleties of the current situation, what I *do* know is that NO politician wants to be known for a tax increase. So they borrow and leave it for another politician to take the blame.

My point is that while the iron is hot, while desperate measures are needed, the CURRENT POLITICIANS are completely 100% accountable for this tax increase. Sure they don't believe in balancing the budget anymore, but make no mistake, we need to give a pass to any future politician who raises taxes to cover this commitment from the current lot.

So in this case, the Republicans are championing the biggest tax increase in history. And the Democrats are walking behind them saying "yes sir." Both parties clearly walking away from their base with a "hey, we gotta do it" mentality with no long term solutions.

Indeed, here we are. Here's to new taxes, tonight is kind of special.

I.O.USA, the Movie

Worth the 7 minutes. Hat tip to @deneyterrio for sending it out.

Google's Child Care Debacle in NYT and what SHOULD they do?

We can learn from this article.

On Day Care, Google Makes a Rare Fumble By JOE NOCERA Published: July 5, 2008
Two months ago, Google held a series of secret focus groups with employees who have children in Google’s day care facilities. The purpose was to gauge their reaction to the company’s plan to raise the amount it charged for in-house day care by 75 percent.

The summary (paraphrasing the Times article here) is Google put in place day care. Then they did their own (better?) day care which almost doubled the costs. Then the closed the less expensive one and eliminated a 700 person wait list by pricing the day care out of range for everyone but the most wealthy googlers. And charged to be on the wait list. And now they don’t list day care as an employee benefit because at $2500 per month per kid few can afford it. And for philosophical reasons there is no longer any lower cost option for mere mortals who don’t buy into the latest Warholian 15 minutes of Teletubby child development fads.

The full article is worth a read. But the *main problem* is one of economics. They put in place benefits that sounded great, the CEO felt like a hero announcing them I bet. Yet benefited only a few with kids (like me) while the rest of the company paid for it (was taxed effectively). So sure I *would* want subsidized child care personally, but does everyone else want to pay for my benefit that they cannot use if they don’t have kids?

Meanwhile, someone at Google woke up one day and realized that the company was subsidizing each child to the tune of $37,000 a year

Is child care a universal right? Because all those years I spent driving crappy unreliable cars while my friends had new ones because we had a $1200 a month day care bill compared to $800 in rent, well actually actually those years were awesome because I love my kids. But it would have been cool to have my cake and to eat it too!

The article concludes:

What are you doing to build morale in a recession?

Eurasian Eagle Owl
Originally uploaded by eschipul

Question: What are you doing to build morale in a recession? People are worried!

Answer: Not much really. I no longer view it as management's job to entertain the troops.

Or to put it another way; whatever will be will be.

Whether the issue is the price of gas, the price of food, the electric bill, the war, the recession, the unemployed, the lack of health care, the broken government run by the boomers to be paid off by the millenials who haven't figure it out yet, the devaluation of our currency, well, there are just plenty of reasons to be in a craptastic mood as an American right now.

I've done this dance before. 2001 was crap even before 9-11 and it went down from there. And we were told to "go shopping" while we figured out who attacked us. (Rant: This time buy a smaller car. Carpool. Move closer to work (gasp!). Get a roommate. Save money. Meet the neighbors. Organize card nights to save money from restaurants and have a better time and get the kids playing in the streets again. Think.)

As a company we had an mini-exodus of employees in 2001 and went from 12 employees all the way down to 6 at our lowest point. As a leader I blamed myself for this. No longer. Maintaining employee morale and a sense of determination is far beyond the ability of one leader. Particularly given the inputs of so many outside of work.

The public for which masterpieces are intended

...as dead as O-Ren
Originally uploaded by eschipul

"Whom were these two seeking to please? Not the audiences of Lima. They had long since been satisfied. We come from a world where we have known incredible standards of excellence, and we dimly remember beauties which we have not seized again; and we go back to that world. Uncle Pio and Camila Perichole were tormenting themselves in an effort to establish in Peru the standards of the theaters in some Heaven whither Caleron had preceded them. The public for which masterpieces are intended is not on this earth."

- The Bridge of San Luis Rey, Thorton Wilder, pg 77

The Post American World

BBC World News has a posted Fareed Zakaria Post American World. First

"the rise of the rest places certain limits on American power"

"The rise of the rest" is actually a pretty darn positive statement. From a study-of-power perspective it is no surprise that the vacuum formed, the monopoly formed by the USA being the sole-super-power, has a post-world that is hopefully more balanced.  Make no mistake, I am incredibly pro-America because, well, I am an American. I can't tell you how much I love this country.

Yet conversely I don't like our role as World Police. I don't recall applying for that job, and the fact we have been forced into it, leads us to an awareness of a lack of gratitude. This leads to email snippets like the one below.

5 Basic Rules of Negotiation

Reading  Harvard Negotiation Project: 5 Lasting Rules For Negotiating Anything on GigaOm made me send the list of five rules of negotiation to a client. First the rules:

1. Don’t Bargain Over Positions
2. Separate the People From the Problem
3. Focus on Interests
4. Invent Options for Mutual Gain
5. Insist on Using Objective Criteria

One side effect of the recession I have seen is clients getting into complicated situations, even some self destructive, almost as a diversion from the real issues. I don't have a solution. But I do wish folks would learn a little more about creative negotiation to get us all to a happy place. Just keep paying it forward I tell myself.

Work Stressors and How to Respond

the blight
Originally uploaded by eschipul

Stress. Sucks.

Much has been written about stress invoking the limbic brain, which while effective in dealing with saber toothed tigers, isn't so great at dealing with the complexity of the modern world. Add on top of that the recession, inflation and our mind's dubious relationship with money and you have a mess. A mess of stress.

So to break this down I did some reading and The Stress Experience at work comes, according to researchers, comes from:

1. a person's perception of the situation;
2. the person's past experience;
3. the presence or absence of social support; and
4. individual differences with regard to stress reactions.

(source: Organizational Behavior, Hellriegel, Slocum, Woodman, pg 199)

Attacking these one by one can and will reduce stress. Perception. For example the people a person hangs out with and the content they put into their brain frames their perception of the world. Cliff changed the way I think about the post office. A character? Yes. But a real change in perception based on fiction.