Tom LaSorda, left, CEO of Daimler Chrysler AG's Chrysler Group, Rick Wagoner, center, CEO of General Motors Corp., and Alan Mulally, CEO of Ford,
I am having trouble getting my mind around this one. Here you have three of the most powerful, influential CEO's in the country who are suppose to lead the icon of industry, the car business. And these stooges come flying in to Washington D.C on their private jets, asking Congress for 25 billion dollars (that's $25,000,000,000.00).
Now they had no plan, other than to request from the esteemed Senators and Congressmen a hand out of cash. That is taxpayer money (your money and mine) that is supposed to keep them from going bankrupt.
Excuse me, but as a businessman, I don't recall getting the same invitation. Oh that's right, I'm just a small company that has reduced my payroll, reduced my spending, reduced my overhead, reduced my transportation, reduced my expenses and reduced my lifestyle.
But the difference is these guys don't own their companies. They are paid multi-million dollar salaries, huge bonuses and provided perks like corporate jets, to screw up. This is nothing new, for 30 years they have been getting their collective butts kicked by the Imports, and they haven't learned a damn thing. For years they have cried about market share, offered price incentives (buy at employee prices) and basically free financing (0% interest for 60 months). None of that is a long term strategy, or to increase market share by providing the kind of vehicle, the price of vehicle and the quality of vehicle we want or need.
Meanwhile the Imports have built factories in the US, hired workers in the US and outsold all three of them in the US. And send their corporate profits back to their respective countries. All of this has been under their noses for 30 years.
And now they go jet setting into Washington DC to "respectfully request" a small loan (25 billion) from the benevolent congress of the United States and are finally being asked a few obvious questions like; what are you going to do with the money if you get it and how long will it last until you come back here and ask for more? And what was their answer? Nothing more that corporate double speak. And when asked what their plan was.....silence. They were not even prepared to provide a business plan, an outline or even a basic idea of how they intended to take their 100 year old dynasties and get them to perform in the 21st century. They looked like the stooges they are.
As business owners we pay our employees first, our taxes second and ourselves third. They don't. Their companies are on the verge of dissolving and they haven't reduced their personal spending habits and obviously not enough of their companies expenses either.
If I were asked (and I'm sure I will be), here are the conditions that I would place on that loan for the "Big Three:"
- Show me a comprehensive business plan that will assure your success in the next 5, 10,15 and 20 years and how you intend to be involved in it.
- Reduce your salary to meet your living expenses for your household and if need be reduce your household expenses. I want to see that budget and see if there is some fat that could be cut from it.
- Any monthly income in addition to your monthly expenses will be in common stock (not preferred stock) of your respective companies.
- Any bonuses will be based on performance of your respective companies. If the company succeeds so will you, if the company fails, so will you.
- No employment contract. Your ass is on the line to make these companies function in today's market environment. If you can't perform we'll find someone who can. No "Golden Parachute". No pal you can't take the money and run away leaving a bigger mess than what you already have.
- Sell the jets (Palin did it boys, so could you. I understand eBay is the place to start)
- Drive one of your cars that you produce, and keep it maintained and clean. For Mr. LaSorda let me suggest a Dodge Caravan. For Mr. Wagoner a nice Chevy Malibu. And for Mr. Mulally a Ford Focus. I think that will do just fine.
- Next time you come to Washington DC drive that car instead of flying. Use a hands free cell phone if you need to communicate with corporate.
- Go into the factory and talk with your employees. Listen to what they have to say, get them involved with the plan you submitted.
- Each day drive a different competitor's car to experience first hand what you are up against. Find the things you like about them and the things you don't like about them. Then engage your designers, engineers and factory workers to make new machines.
- Report back to me every month with a progress report. Tell me what is working and what you screwed up. If you screwed up tell me why and what you are doing to not do it again.
I'm pretty sure there are a few more things I could require, but that will do for a start. After all they are asking for taxpayer money, I'm a taxpayer, shouldn't I get to help make the rules?
-Don
About this Author
Don Davis can be reached at 360-652-9994 or email him at dond at htlnw.com or visit his web site at http://www.HTLNW.com for other contact information. Don specializes in residential and commercial lending mostly in and around Snohomish County, North King County, Skagit county and generally in the state of Washington. Don has spoken at numerous workshops and events and written articles regarding credit scoring and related topics and has helped many people substantially raise their individual credit rating.
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