Friday, May 29, 2009

Say it ain't so, Lee?

Oh no! Don’t take Lee Iacocca’s car! I hope it was one of those boxy mini-vans his group was credited with inventing and bringing Chrysler out of bankruptcy. If that were the case, I’m sure Lee’s all to ready to go out and buy a real car. "if you can find a better car, but it" - Lee Iacocca

Well Lee, I think they took your advice. It is an ironic turn of events when Lee Iacocca, the man credited with saving Chrysler from Bankruptcy in the 80’s is now the victim of the company’s lack of innovation. I read his book (autobiography) and briefly scanned "Where have all the Leaders Gone?" While waiting on my wife at Barnes and Noble (or some other mass bookseller), I can tell you that this man was innovative. He was also very charismatic in his time. Who could forget the C’s? Curiousity, Creative, Communicate, Character, Courage, Conviction, Charisma, Competent, Common Sense and the biggest one of all, Crisis. Apparently Chrysler did.

It’s a sad day, when, dare I say it. Politics, and the UAW take down the very source of their wealth. I’m not going to union bash, there are plenty of people that can and do that already. However, I will point out that in the ‘real world’ many of us have taken pay cuts just to keep our jobs. I was recently with an organization that filed Chapter 11; we had 147 retail stores along the east coast an nearly 11,000 employees. When we went into chapter 11 for the 1st time, we shuttered stores and markets, and those poor workers, that stuck it out on the promise of a payday were left holding the bag when the company decided to rescind the offer due to lack of funds. If they wanted their final paycheck, they needed to file a claim in bankruptcy court. Our CEO (very un-Iacocca like) was quoted with his famous last words; “It is what it is”. It certainly is, isn’t it Joe ;-) Our company emerged from Chapter 11 as a new company. Our assets were purchased at auction by a Hedge Fund manager who had no experience in our industry. Save the CEO and the founder, the majority of our Executives remained in tact. You know what happened? We didn’t change our business model to be more competitive. We kept marketing the same ways, selling the same ways, buying the same, etc…the only difference was a shrunken budget to try to do it all. Annnd then...We went into chapter 11 again less than 1 year later. I was fortunate to jump ship in May of 2008, the company no longer existed in any form after September 2008. No one got any form of payment, early retirement, or benefits package. This, my friends, is the real world.

Why the background on my former employer, simple, where was our bailout? We would never have asked for one, and our 11,000 workers were not union, therefore not organized to influence politics with their voting power, and not due a pay-off for future votes. (Did I say that out loud?) That, and all this happened under the Bush Administration, where you don’t bailout failing companies. AND you certainly do not invest in them. Companies fail for a reason; they are too big to afford themselves, no longer innovative, they refuse to change their business to accommodate the changing consumer, etc…

Now I’m hearing my tax dollars just earned us, as a taxpayers, 72.5% of GM shares…whoopty-doo. What a poor investment. What will be different when they emerge from Chapter 11? Will they make better cars, cheaper, and more efficiently? Nope…Anyone seen a do-do bird lately?

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