At 62 years old and as a former corporate executive and consultant, I look at the demise of the auto industry full of emotion. Let’s take General Motors for instance. They once employed nearly 400,000 auto workers in this country. When the latest round of leadership and the vaunted government ‘auto task force’ gets done, they’ll be employing less than 40,000 auto workers. How could this be? Let’s take a look and see what it means to America.
The first problem is leadership arrogance. I remember back in the seventies, under the leadership of Roger Smith, GM suffered from an arrogance that was unequalled at the time. They were on top, led the world with a market share over 50% and were convinced they were invincible. The Japanese made junk and were not a problem.
At the time, my wife and I were living in Akron, Ohio. We’d get up every morning and walk out of the apartment to the aroma of fresh rubber, the smell of jobs for most of Akron. They too suffered from the same leadership arrogance that has led us to our current state of demise in this country. Here we have a problem of the leaders own arrogance blinding them to the reality of the marketplace. The auto industry and the rubber industry are two peas in a bad pod. And always remember, the problems we see here, in Congress and the White House are all leadership problems.
The second problem is the unions. Detroit was fat dumb and happy and since they were riding on top of the world, when all was well and everyone was happy, they made deals no one could be expected to deliver on long term. In Akron, a guy I knew who worked for Goodyear, a once proud company like GM, was twenty-five years old and worked in the factory since high school. He used to take six months off every year, a ‘voluntary layoff’ they called it, and receive 90% of his pay for that time of ‘not working’. It doesn’t take a rocket scientist to figure out that rocket is going to run out of fuel. Here we have a leadership problem in the unions … they priced themselves out of the market.
The third problem is that over time, as corporate America in the late eighties and nineties became enamored with education over experience, Detroit lost touch with the fact that, dealerships, the feet on the street, sell cars. Fancy brochures, car shows and goony advertisements don’t do it. To the average car buyer, you and me, who is General Motors or Chrysler or Ford? GM to me is my local dealer who talks to me when I stop by, who takes care of problems when they happen, and who makes the donations to the Little League my kid plays on. It is not Roger Smith, Rick Waggoner or the Auto Czar now chairing a committee in Washington.
As I write this Chrysler announced the massive closing of dealerships and GM is expected to do the same and for what? Dealerships sell cars and that is Detroit’s problem selling cars. Are the dealerships actually a cash drain on corporate? No! They are independently owned businesses making their own payroll, paying all the floor plan interest to the finance companies that gouge them and they are being shut down. I’ve heard it said to reduce inventory of automobiles. Well ask a dealer if they ‘order’ the cars in inventory. The answer is no, the auto companies set exactly how much inventory they must hold and they’ve been pushing it down their throats for years. Remember, it is always a leadership problem.
The fourth problem is that you have to face your problems to change them. As a recovering alcoholic, I learned I couldn’t stop drinking and destroying my life until I looked in the mirror and said ‘I am a drunk’. The leaders of our once great industries in Detroit and Akron have failed to do that to this day. They don’t get it. Flying to DC for Congressional hearings during an economic meltdown the likes of which we haven’t seen since the Great Depression on private jets. Why are we surprised at our current problems? They still think it is all about them, those few at the top.
I once heard Dr. Stephen Covey say, “You cannot talk yourself out of a problem you behaved your way into.” The leaders in the auto industry have been trying to use smoke and mirrors to fix this problem for the past few decades. That leadership includes the unions too. And who suffers? All of us really, but especially workers who are now entrenched in behaviors and lifestyles leaders gave them and now want to take away. It is sad we live in the greatest nation the world has ever seen and we’re saddled with leaders who have forgotten what got us here, blinded by their arrogance and success which has fueled their destructive greed.
The fifth problem we have is our government. And this isn’t a problem of Republicans or Democrats; they’re both equally inept at this point. It is a problem of leaders suffering from the same disease they blame on the unions … the disease of me. We are led today by a group of people who are so far removed from the everyday, up and down the street American, they don’t have a clue how we live or what we are going through every day.
There is no possible way our founding fathers intended for us to have professional politicians. There is no way they intended our Congressional leadership to have separate retirement programs from the rest of us, to vote in their own pay raises and sit in judgment of others while leading morally bankrupt lives and keep their seat as public servants. Yet we are led by these people who are taking us down a rat hole our once great nation will not return from.
The last problem I will mention is a current one as well. The Auto Task Force established by our new leader in DC to fix this mess. The task force itself deserves its own diatribe but for now understand it is chaired by Timothy Geithner, the Treasury Secretary who was unable by his own admission to operate Turbo Tax, and, who is a known tax evader who was somehow approved for office anyway. The co-chair with him is Lawrence Summers, an economic advisor … and what does any of this have to do with turning around an auto company?
If you think that this is only impacting the auto industry, think again. The same leadership has infected all of corporate America today. It is sad indeed that we sit here in the rubble of what was once America. It will be even sadder if we continue to play in the rubble and do nothing as every day Americans to get ourselves out of it and stop the nonsense that is literally destroying our way of life … for our children.
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