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December 02, 2008
Creativity under pressure
Detroit is showing it's a bit smarter in how it asks for bailout money.
Instead of traveling by corporate jet, GM CEO Rick Wagoner will drive a Malibu hybrid for the 520-mile trek from Detroit to Capitol Hill; Ford CEO Alan Mulally will drive an Escape hybrid. The travel plans of General Bob Nardelli of Chrysler are secret for "security reasons" (guess he's flying). (Update: Chrysler got wise and said he's driving, too.) All three are to present their plans for $25 billion in taxpayer-backed loans on Thursday and Friday.
If they were very smart, the CEOs would drive unreleased, next-generation cars that get 100 MPG. They'd stop in a half-dozen towns along the way and invite a newspaper editorial board writer to ride shotgun for a dozen miles. They'd update their status on Twitter. They'd write a few posts for the company blog. They'd shoot video on a Flip camera and talk about how they screwed up at their first appearance, how they're selling their fleet of corporate jets, and their plans for the future. If they behave like real people instead of CEO machines, they might arrive in D.C. backed by some pretty good word of mouth.
In other words, they would prove that in these recessionary times they know what it means to be entrepreneurial, not imperial.
Update: GM said late Tuesday it needs $18 billion, like yesterday, to survive. Wagoner and Mulally said they would work for $1-a-year salary if federal assistance was forthcoming. Hint, gentlemen: Arrive in Washington having already cut your salaries to $1.
Update 2: Businessweek just posted a phone interview it did with Mulally while en route to D.C.
What do you think: Give Detroit a line of credit, or let 'em file for bankruptcy and work it out in the courts like the airlines?
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Outstanding ideas. Just think if one of them had done this THE FIRST TIME AROUND. Instead of looking like the spoiled kid who's finally falling into line, they'd look like a REAL hero who gets it.
I might add for those that are creatively bankrupt, you could always ask Ben and Jackie for loan! Awesome ideas.
Brett: So true, but they were probably so insulated by their bubble then that the idea would have been laughed out of the room.
Bill: Heh! You are too kind, sir.
"If they were really smart," kind of says it all.
So sad.
Best advice for those CEO's I've read yet.
Next best advice is to call a career strategis to chart their next job.
Definitely a nice thought. I doubt, however, than any of these companies has a car that gives 100 MPG.
The CEO's are way over paid, one Ford exec. is paid 28 million a year and lives in Seattle, flies back and forth each week no telling what that costs per year! REDICULOUS!!!! Union workers make an average of $73.00 per hour, most people make well under 30 dollar per hour. That is also REDICULOUS!!! Everyone there has to cut way, way back to make the companies profiatable. They say that there is $1500 per vehicle in health care costs alone. Either the companies will shut down or concessions will be made, that is the way it shoud be, not the government bailing them out.
Just wait... when I blogged about this last time I got some nasty comments from a Chrysler employee about their travel policy for execs. It's about time Ford woke up... I don't think GM had the brains to think of this on their own.
I still say, don't give them a dime. Allow the free market to decide which companies stay alive.
Ben, neat ideas on the next gen cars.
As for the question of giving them money - NO! Burt is right, let them die.
Capitalism with failure is like religion without hell.
When things get tight for most companies, they begin to merge, cut, slash, and make the changes that should have been made. I've seen school districts and fire districts merge. I've seen cities and counties merge (Denver). I've seen video stores and electronics firms merge. Do we really need three companies building 30+ versions of the same out of date cars?
I agree, they should have never flown in the first place, so out of touch. Let capitalism run its course. Stop bailing out all these businesses out of their poor decisions.
Ben, this is a brilliant post. There are so many things wrong with this idea that the US government should finance private busineses that I don't even know where to begin. The frosting on the cake is reading your observations.
These dinosaur-like CEOs have NO IDEA what the real world is like in 2008. It's absolutely NONE of the government's business whether these men fly in jets or ride a bicycle to washington DC. But after the hand over the cash, it will be. These guys won't be able to expense a Constant Contact membership withut Barney Frank's approval.
If the Big Three fail, they fail. Americans will still want cars, so hundreds of start-up companies will form to meet that demand. Many of them will employ former Big Three workers. Some will build small, fuel-efficient, green cars. Some will try producing bigger vehicles. We're smart people, and we'll figure it out.
As Seth Godin pointed out recently on his blog, there were literally hundreds of car manufacturers in business when Henry Ford built the first Model T. Let's see what creative, innovative people can do.
The goverment should stick to naming Post Offices and running the army.
Or they could use http://www.pickuppal.com!
They could all be driving the Aptera! http://www.aptera.com
I think this would have been a fantastic idea - IF they'd done it the first time. But now, as Brett said, they just look like they're "falling into line."
It would have been amazing PR and truly leader-ly if one of them had taken your approach the first time, while the other two had jetted in. But alas, now it's like the lover who buys flowers for his beloved two days after she laments that he never buys her flowers... the meaning and value is lost.
These are great ideas on what troubled and failed leadership can do right now to help change the direction of their companies.
Here's to hope that they make these changes. The kind that don't require a request for billions of dollars and instead, the kind that shows they are people who can embrace change openly, admit what they've not done right and listen to its market. Great advice!
Great post. Made me think of Under Pressure with Bowie and Queen: http://blip.fm/profile/zanesafrit/blip/1668138
Ben,
Enjoyed the post - although I'm of the opinion that the Big 3's CEO's should be a bit more focused on saving their business rather than leveraging an exploitable PR event. What's needed here is a demonstration of real change - not just lip service.
I blogged about it here:
http://bawden.wordpress.com/2008/12/03/when-giants-fall/
I offerred six different suggestions than the ones you've outlined above - although I think they all take us to a similar conclusion.
Great post.
Regards,
Mike Bawden
Brand Central Station
Olivier -- Yup. They're too far in the bubble to be smart enough.
Anauel -- True. The Chevy Volt gets only 40 MPG, but it has zero emissions and is supposed to be the company's car of the future. That would've been an interesting choice to drive.
Burt, Adam, Ed, Gary and JD -- I'm with you on the law of the economic jungle applying here.
Hank -- True. It'd probably be better for the government to just buy GM for its market cap, then resell it. But that's not the business of the government. Government-backed loans would clearly be a case of throwing good money after bad.
Jonathan -- Heh! Carpooling... now there's an idea that Detroit... hates.
Geetz -- Love it, love it, love it.
Anthony -- Thanks. I think it goes back to the size of the protective bubble surrounding these guys. Clearly, the bubble is too big.
Vanessa -- Thanks. The question is, will Detroit eat and swallow enough of its ego to make that happen?
Zane -- Heh! A song for the ages.
This is such an awesome idea. Imagine if the CEOs actually listened to the marketing/PR people and did this.
The tiny bit of pain felt by the CEOs for driving a few hours, could be used to show that they are actually connected to their core target audience (the general public). This coming from three big-wigs who arrogantly showed up in three separate planes from the same airport. That would be a true marketing feat.
The only problem is would they actually keep up this behaviour or return to their old lavish ways? I am guessing it would be their old lavish ways.
Great idea and interesting thought.
http://dominiquehind.wordpress.com
How many years have top executives of these major corporate businesses been earning millions? Another questions I have is why they feel it is imperative to their business that the union come to concessions? Why should the hard working people of America have to pay for years of idiotic mistakes by well educated CEO and top executives? My major concern if a loan or "bailout" is granted is that these same people who drove the industry into the ground will still be in charge. I vote fire the a majority of the call makers but they would enjoy that too because of the huge umbrella plans they probably have set up in such a case.
These CEOs need to be very careful not to appear to be holding the government to ransom. The companies should be working to cut costs first and then receive the grant not say we will cut costs only if we get he grant!
And why $1? Why not for nothing!
Great post and good ideas for them.
My favorite line: In other words, they would prove that in these recessionary times they know what it means to be entrepreneurial, not imperial.
If we took all the bailout money and divided it up for people living in america it would come to 200,00 dollars for each household. This is what should have happened.
Then everyone would go out and buy a new home and a new car.
Problem solved.
And I'd get a sweet grill in my mouth. with diamonds from canada.
I have heard that solution about getting the bailout money. If it didn't cause inflation in prices I would agree strongly. Greed is the reason we are in this mess. The way it is going it seems like the government is trying to create two classes of people Upper and lower class. There will be rich and poor. No inbetween. It's ridiculous the wage inequality in America. There really needs to be some regulation of earnings set by Congress to prevent something like this from happening again. Why now does the Big 3 CEO's pick it to come out of their holes to say hey we are going to callapse? Why now are they saying they will take a yearly salary of a $1? How many years have they fought the union on wage, benefits, and health care but make millions along the way? If they cared about America they wouldn't of allowed themselves to make the salaries that they made causing and inevitable callapse that they take no responsibility for.
I say "no bailout". Cut costs or go the way of the dinosaurs.
Its funny what kinda ideas that a big-time blogger like yourself delivers to Big 3 CEOs. Twitt'r? Company Blog? Flip camera phone? and your eyebrow-raising "selling fleet of planes" link didn't mention anything at all about selling even a single plane. Just because you have been transformed by the internet into some sort of superstar it is not as easy you think to become just like you. ha ha ha- you are SO 1 of kind
oh and CEOs merely represent thousands of workers, each and every one whose job is on the line while you flippantly suggest that they should all be spanked by court systems for the sin of receiving credit in the first place. You take on too much, as an individual, et al. -where would YOU be without credit?
Good point OldSchoolReal. Where would anyone be without credit. Is it really the same thing though? If I get myself in debt and need a loan, do think anyone is going to give it to me? I will have to file bankruptcy no doubt and start over with horrible credit for 7 years I believe, that it stays on record. Let me put it this way, Mulally for Ford made $2million last year with $21.7million in compensations, GM CEO Wagnor made 1.6million with $14.4 million in compensation, and GM doesn't even disclose earnings according to a report which makes sense seeing what the others make. If these are the individuals representing thousands of workers then don't you think they should of cut, oh umm, just a million off their "hard earned" salary, lol, or so sooner then this year? They make more then the president and more then some NFL players. At least the President only gets 4 to 8 years to mess up the country and then someone else is elected. In the NFL your cut or replaced if you continue to lose games. What happens to CEO's when they mess up again? O yeah they get a nice umbrella plans for retirement. Well they should be on MTV cribs so kids can watch how they live and we would have more children staying in school to study how to help a company fail. Hey it might solve our education problem if everyone could see just how much money you could make and not worry about messing up in the end.
Ben loved the post. great insight and great marketing... they was $10,000 of free consultation you just gave those companies by the way. Now you're out that cash....you should apply for a $10,000,000 bailout
Dominique -- That would be my guess, too.
Rule number one for any CEO: communicate clearly, and often.
Rule number one for any CEO facing a crisis: overcommunicate clearly, and often.
It doesn't seem like the CEOs of the Big Three have followed through well on either count.
James -- Heh!
Tino -- I agree that executive salaries are out of alignment with reality, but I don't think the answer is salary regulation as it stronger rights for shareholders.
Oldschool -- You assign a great deal more influence to me than I have or deserve. Also, the story of the mess in Detroit isn't about credit -- it's about years of mismanagement. Detroit never missed an opportunity to miss an opportunity.
Mark -- Good point. The first thing I'd do with my $10 million bailout is award myself a $10 million end-of-year bonus:
http://tinyurl.com/5vpjzl
Wow. Simple but effective ideas. Why didn't the "Big Three" think of that?
