I couldn't resist. Earlier this afternoon I was flipping through the channels, and happened to see the President of Ford Motor giving a speech on C-Span. Boy, what a "Dog and Pony" show!
Here's the scene. The President of Ford was dressed like a U.S. President (You know, dark suit, bright red tie), reading from a teleprompter, in front of an audience that was obviously handpicked.
Am I wrong, or has corporate America adopted the philosophy, "if you can't compete, dazzle them with B.S." After the speech, the audience gave the Ford executive a raving round of applause. I don't think the audience included any of the 30,000 people who are about to lose their jobs, or included any members of the AFL-CIO.
A month or so ago, the Chairman of General Motors did the same thing. After seeing the act twice, I couldn't help but comment.
Granted, Ford and GM do not have a choice. They are in trouble, and need to cut their workforce in order to reorganize and compete.
The problem with Ford and GM is they have executives who are obviously intelligent, but have no common sense. To work you way up the ladder, you keep your mouth shut, don't rock the boat, and constantly praise the person in front of you.
The problem with labor is they always feel like executives are always trying to screw them, and end up getting the short end of the stick because of their lack of flexibility. In essence, it is a microcosm of our government, one party always disagreeing with the other.
When you're fighting for you life, you throw the B.S., ass kissing, and selfishness out the window, and go to work. The first place you start is by beating your competition at they池e own game.
If your product is not selling, you copy your competition, and beat them at their own game. Sure, you'll still need to slim down and cut costs as you transition your product line, but when you do, make sure you make a product that looks, smells, and tastes like your competitors, and be willing to back it up with better guarantees.
To get labor on your side, at least attempt to show them you池e serious. A good first move would be this. If you want to cut labor costs by 50%, cut all executive pay by 50%. Make up the difference with stock incentives for both labor and executives. If the company returns to profitability, or hits certain profit goals, return part of the giveback in company stock.
If the unions reject an iron clad plan such as this, you are in trouble. Maybe this is what Ford and GM are up against, I don't know. But it seems that if both sides could come together for the good of the company, something could be worked out. If not, the dazzling will continue.
Comments (3)
Bernanke better continue to lower the standards on home mortgages when interest rates resume their long term decline because of the secular concentration of wealth in this country - assuming China, et al are willing to buy US debt instead of natural resources. House prices increases in the US are mandatory for this "global economy" to continue. Btw, are the banks going to hide their losses on home loans just like they have been doing with car loans?
Posted by alan | January 24, 2006 7:57 AM
Posted on January 24, 2006 07:57
The thing about executive compensation is that when it was a lot less we seemed more competitively. And we now have individuals running military divisions and corps for a fraction of what a corporate executve makes. I'm not saying that the generals and admirals would run companies well (it varies) but some are very good at what they do and they give an idea of what it takes for committed management talent.
So we create this feudal system in which intangibles (which often don't work out pragmatically) are required to select this small elite nobility. And I think we suffer the consequences. They are not particularly good, they create an environment were they don't have time to think and they replace older values with hubris such as bankers saying "Subprime?! Let me give you a negative interest loans for 110% of the current value of the house!" Far, far from the sober image.
The unions are also worthless, they not only fail to organize, but they don't use their pension funds to push corporate reforms. They are a liberal elite of college kids who work for things like gay rights but not fundamental issues related to capitalism and the economy.
I do think when things get desperate we may work together and when that happens those who have been riding high wil be despised.
Posted by alan | January 24, 2006 6:02 PM
Posted on January 24, 2006 18:02
I am the "Alan" of January 24 that posted at 7:57AM. The "Alan" posting at 6:02 PM is not my post.
Posted by alan | January 26, 2006 3:13 AM
Posted on January 26, 2006 03:13