Part I in an IDEA MASTERS' Special Series on Culture, Capitalism & Consciousness

Ho. Ho. How?

  

A Former Big 3 Consultant's Perspective on the Bailout

A Commentary by

M. Joyce McMenamin

10 December 2008

 

As I began writing this commentary today - a preliminary and exploratory vote was taking place on Capitol Hill with respect to a bailout for the auto industry which had been hammered out within the past few days. Some GOP leaders are opposed. I can't blame them. Being a 'little bit of a Capitalist' is "a lot" like being a little bit pregnant. The Big 3 in Detroit, who claimed their road to fame on the concepts of Americana and free enterprise now expect to claim their next trip to the Corporate Hall of Fame via convenience-nationalism. Reviewing a recent TIME magazine photo gallery - one might think that the Big 3, perhaps, should have invested less time and money in corporate parties and in building new Canadian facilities and spent more time investing in their own communities within their own major-metro. 

The product isn't as bad as Michael Moore might have recently told you on a national TV show. How would he really know anyway? Does he drive an Oldsmobile, a Chevy truck or a Ford SUV? He might, but I actually do. Product aside - the processes within the automotive sector are what's broken and attempts to address the bleeding from an incentive-based standpoint have been antiquated and poorly timed, at best. Just as our society and culture now break in the hands of the Michael Moore sound-bite-moment-on-late-night-TV, our economy crashes deeper into the realms of socialist-economics via the nationalization of core industries - all of which were originally built on the concept of free enterprise (e.g., Capitalism).

I liked Roger & Me.

I think it was Michael Moore's first documentary. I still have a copy. I thought he brought up some good social, organizational and communication issues that were in need of a fresh perspective. That was the early 90's.  After that - I lost touch with his work as he seemed to become as fat, as arrogant and as ill-informed as those he originally criticized. Fame isn't always everything its cracked up to be. Ask Michael Moore. Then ask General Motors, Ford and the other guy -- uh... what's their name....  Chrysler.

In the fifty years I've been around, I've learned that, outside of basic math, nothing is black and white. My family life and my deep spiritual life are, for the most part, private and consist of grey matter. Covering nearly ten industries during my career (so far), with stints among Fortune 100 corporate divisions, in banking, telecom, publishing and consulting - my professional life has been, at times uncomfortably public, yet always very fulfilling to me at a very personal level. I have never been fired, nor laid-off, but I have been known to voluntarily leave well paying situations to maintain congruency in my own life's mission. That's risky business. But then again all business contains a certain, often high, element of risk, doesn't it?

Earlier in this decade, I spent nearly three years on a consulting contract that involved a third of the Big 3 where I worked with retail groups (e.g., car dealers) and wholesale level field teams at a regional level. What began as a single-branded five state contract, turned into a dual branded, twice the volume line-o-work. But I was in for the game. The work was fulfilling and the people at the field level had been neglected for a long time.

Once again, in my career, I found myself in the right place at an odd time. A few months into my 2004 contract, the automotive industry began to show large cracks in its infrastructure. With a background in finance, economics and strategic planning, it was easy to understand the ultimate consequences.

By the end of 2006, I announced that I would not seek a 2007 contract. The fact was, I saw no future stability in the industry and I wanted to leave the automotive retailers I had grown to admire and respect, with the happy memories we shared. Plus, having begun the project in top physical, mental and emotional wellness - perhaps the best of my life - I was exhausted & depleted. I knew that, unless I moved on, I would bring no further value to the process.

We had worked very hard, at the retail level, and there was a great deal of promise, hope and success that had been accomplished. Yet there was a historic hesitancy, despite the interim success. You see... the retail level had been screwed before, by the OEM, and while they were Gung Ho on the product, the processes and the promise - there was always a sense of hesitancy in the air that I didn't understand... at first. I did my best to dispel rumor and innuendo but deep down the retail level always knows what's really happening because they are the front line.

The big picture came into view as it became clear that the problem being addressed at the bottom, while vital, wasn't the only answer to the bigger crack that was widening into a canyon that would eventually threaten to swallow an entire industry and the brands and the people that went along with it.

With my background, I knew that a negative cultural shift from the bottom could lead to disaster - regardless of what the top was doing. In the automotive industry, as I saw it, the very top and the very bottom drank the Kool-Aid®  and felt the passion - yet it was the middle sector that was in need of a complete overhaul; there was a great deal of waste and ineffectiveness there, in spite of a few shining stars - and nobody - absolutely nobody I spoke to about this at the corporate or contract brokerage (process improvement provider) levels wanted to address the obvious and take the baton to the higher level for observation. Most of the people I met from the corporate, or 'go-between' levels, simply wanted to keep their paycheck and perks intact first and let somebody else worry about the bigger picture.

As a former corporate middle manager, I knew that often it was the middle that made a difference. In Detroit, the middle didn't understand its responsibility to the top and bottom and I never heard anyone mention the word "shareholder" outside of a description of their own portfolio.

In the end, however, if I were forced to take sides between the top and bottom - I'd side with the bottom. Because therein is the real Heartbeat of America. When I decided to leave - it was partly because what was coming, I knew, would not provide a foundation for future happy memories of accomplishment that I wanted to hold on to forever. What was coming was a train wreck and would be completely out of everyone at the retail level's control.

Those automotive retailers who stayed in touch with me during the past two years, since I left the contract, were advised to consider finding a new business. They hung in - primarily because automotive was the only business they knew or loved.

There are few man made events that stir a deep sense of nostalgia within me. Watching Disney's FANTASMIC® show at the original Disneyland, taking my thirteenth road trip on Route 66 in my 2000 Ford Expedition® and watching a really great car commercial can and has brought tears to my eyes. Remember that movie CARS®  a few years back? I cried. Attending the International Auto Show or an annual Dealer Conference, hanging out with customers and retail employees at off-road events and observing the passion that 99% of the people I met in the showroom and service bay brought to their work - didn't make me cry - but will always remain in my memory bank of "The Good Old Days".

The "Good Old Days" are gone forever. I hope people hear that. I said 'forever'... and as someone I once knew said: "Forever, is a Helluva long time!"

Part of what is a constant in life is, change, yet a majority of people resist the inevitable. Why some of us are built for change and others aren't is best left to the psychologists of the world. Me? I'm merely a seasoned business person with a unique perspective and a different set of credentials than most. I often get the feeling that I must have been 'born' to observe the bigger picture and subsequently trained to identify the nuances in the mix. Some could call that a gift, yet it sometimes feels like a curse - lol:)

Here's my bottom line on the 'crisis'.

It didn't happen yesterday and the people who will be hurt most are those who believed in the products and the ideals that were at stake. Did large corporations make big mistakes? You bet they did and contrary to popular myth most of the errors had very little to do with producing a poor product. In fact, most of the vehicles produced by the Big 3 in the past ten years have been pretty decent - some were in fact: 'excellent'!  I should know. I've owned Big 3 autos and trucks since 1985, when I bought my first new car. I have three of them in my driveway right now tucked in between my husband's Honda and Beemer-Show-Car.

Product mistakes were made of course, and in my opinion, were driven by the fact that until a couple of years ago the Big 3 hadn't quite reconciled their own differences and were still competing with each other. They were arrogant. That was their biggest mistake.

They should have formally joined organizational forces in the 90's and created a larger force that could have been 'reckoned with' at a global level. They could have sought Congressional approval to create a monopoly - using the idea that national security was at risk. It was. And still is.

Out of line with their own rhetoric, in practice, they have had occassional partnerships between themselves here and there - and, in search of passive income, have been known to invest in their foreign competitor's stock and did some backstreet deals with foreign competitors while selling the American public on the nostalgia of their historic U.S. based legacy. People like me want the nostalgia and like the products because they fit our needs or somehow feed our soul.

Marketing mistakes were made. It doesn't take a rocket scientist to see that the Big 3 are really out of touch with the cultural and generational diversity that exists in America today. They may have continued to capture the heartbeat of those of us who grew up with their products and believed in the legacy - but all around us the world has been changing and the axis has been shifting.

There has been little effort on the part of the Big 3 to appeal to anyone other than their core constituency... again people like me who can be moved to tears if enough emotionalism is mixed with just the right amount of nostalgia and woven into a really cool piece of advertising that makes us feel good about spending $52K on an eight year finance deal with clear coat options.

I'm not complaining. I have no regrets. I don't actually drive my SUV anymore, but it can sit in my driveway. I like to look at it. I have great memories of driving it. It has no resale value, is still running like a top at nearly 200K miles and has never broken down on the road. Some women have 6,000 pair of shoes sitting in their closet that they'll never wear because it makes them feel good to have them and so I have my SUV sitting in my driveway that I'll hardly ever drive again. So what!  It makes me happy.

Here are a few ideas about what's going on -- in no particular order:

• Those who worked closely with me, at a consulting level, might remember that I expected certain automotive giants to file Chapter 11 back in 2005. They should have.

• The Big 3 should evaluate why they are so far out of sync with consumers and re-think & re-tool the companies that are supplying them with data, direction and oversight.  

• Those on Capitol Hill who fly in private corporate jets when they're hanging out with their large contributors should consider walking their own talk before judging others. Every CEO of every major corporation in the world has a private jet at their disposal. The Big 3 have been wasteful, but focusing on a 'sound-bite-kinda-moment' isn't what's important to the larger discussion taking place.

• Likewise, those flying to Capitol Hill in their private jets should have filed bankruptcy and restructured several years ago - the way everyone else has to when things go wrong - instead one can only wonder if the Big 3 hadn't always just figured the government would bail them out anyway - having set the tone for auto-bailouts with Chrysler years ago and knowing they could always cite national security as a factor.

• Those who think that any amount of bailout funding is more than a temporary band-aid on a broken system had best review the facts & figures.

• The whole concept of the Auto-Czar (one person) having complete oversight of the automotive industry seems a little far-fetched. If there were anyone who actually understood the automotive industry and had any brains with economics or marketing - don't you think that at least one of the auto giants would have already brought them on board to fix their own issues? A Czar from inside the industry is a mistake - one from the outside won't have a clue what they're dealing with and would be hard pressed to 'ramp-up' in the few weeks they'll have to get their feet wet.

• Those who, like me, have enjoyed being a capitalist - in times of profit & loss - had better begin to seriously consider where we are headed as a society and culture in light of the nationalization of so many of our core industries. Who's next? McDonald's?

You know it's funny. When the micro-entrepreneurs of this country make mistakes or experience a market downturn they're forced to file for bankruptcy. While the Big 3 enjoy the satisfaction of staving off the tiger for a few more months (or weeks) we can expect that they will be back for more before the game has ended. Is there a chance that they could survive? Yes, but they would have to reinvent themselves into one driving force <no pun> to compete on a level global playing field. They would have to begin walking their talk and cutting back on their own pork. Additionally, tariffs on foreign imports would need to be addressed -seriously.

Because in the end -- even if the Big 3 don't file BK - the way they should have already - all the little guys who get hurt from the strategic mistakes, including many retail dealers, factory workers, small suppliers and their staffs - will be forced to file their own bankruptcies at a time when the U.S. has seen record BK-filing now for nearly a decade.

See... nothing is black and white.

And nothing of crisis proportion ever happens overnight or within a vacuum. What's really at stake now is whether the U.S. will move into an economic socialist state, by default, or retain its origins as a free-enterprise capitalist-based economic system. Like the auto-ad in the video below depicts: "This is our country." Let's not allow emotionalism to over-rule common sense.

Think about it.

Over and out:)

MJM

A few "earlier" videos I recommend you watch that are relative to this commentary are enbedded below in addition to updates that we received throughout the day 12.10.08.

Video comment: YOUTUBE® and other video links may be obtained by double-clicking on the video. From time to time, YOUTUBE® experiences site issues and some videos may momentarily be inaccessible. Double-clicking on the video box will redirect you to the YOUTUBE® site for additional status. We monitor videos posted to our site periodically and do our best to replace those that have actually been removed from YOUTUBE® or other news sites since our original posting.

   

 

Next in this series:  Brand Loyalty - How at Least One Manufacturer Had It and Lost It & Walked Away from Millions in Profits as a Result. What You Can Learn from Their Mistake.

Joyce McMenamin is President/CEO of Tribeca Nine, Inc, which founded Network Abundance Publications and the original NoNiche magazine. Her production & consulting division, Sensitive Pie Productions, oversees the creative for Idea Masters - which was originally designed as a weekly magazine and at this writing is destined to become an optimized search engine and "portal authority" that will create a monthly "magazine" out of daily updates while providing unique editorial, promotional & advertorial opportunities for pre-qualified "online-preneurs" & professionals. When she's not baking up a new idea to launch, Joyce writes book reviews, coaches authors and consultants and studies life from a vantage point that often comes close to the edge.

 

December 10, 2008  by Network Abundance Publications