Madonna Tribute - Cast of Glee
Dear Auto Industry: Let Me Tell You How It Is
Dear Auto Industry,
I'm confused. I'm confused by this sudden marketing ploy to get people to buy cars by guaranteeing to cover the payment for up to six months if the purchaser loses his or her job.
I understand your logic. I understand it because I watched the CNN segment where whomever the new GM CEO is explained the logic:
- Getting out of bankruptcy requires that you sell cars
- Selling cars requires that people want to *buy* cars
- People don't want to buy cars right now because it's a recession and they may lose their jobs soon
- Therefore, in order to entice people to buy cars, we'll take away the fear that they'll lose their car if they lose their job by ensuring that the payment is covered
- Hence, people will buy cars and we'll climb out of bankruptcy!!!!!!
Now, I am no economics professional, but I do have to account for a substantial amount of profit and loss and even potential loss (which we call risk assessment, and is a sales and marketing analysis you seem to have not ever put in place) on a daily basis. So I understand a thing or two about the idea of giving away money to get money. But again, perhaps I'm just confused here. But here's what it looks like to me:
- Your company (and others like it) spent years running a glutted operation. This, we know, is only partially your fault because you were being butt raped by the also out of control auto workers union (and hey, this is being said by somebody who's decidedly pro union).
- The federal government had to bail you out because between you and the union were running your business like it existed in a communist economy, not a capitalist one. We enabled you to continue this thinking with continued bail outs that both the government and the general populace let go pretty much un-noticed, so we suck. There were several bailouts, but the most recent one was clearly the most offensive one
- You have taken that money and decided that the solution to your financial woes is to just "convince people to buy more cars" and you're going to do that by basically giving back x percentage of the money the US government gave you to people who lose their jobs and can't afford their car payment, lessening their fear of having to reduce their own spend because we're in a recession.
Does this make any sense at all? To anybody?
Here's what you actually need to do:
- Default on many of your union contracts. Sure, they will take you to court, but at last check, blood could not be squeezed from a turnip and the national sentiment towards unions, particularly the auto union, is decidedly "anti." You'll come out way ahead as compared to just continuing to pay out $3000 per automobile sold into union pension plans.
- Downsize your operations even more. Sure, I know you've already laid a lot of people off and closed factories, and that the trickle down from that in terms of suppliers, restaurants, etc. is painful for the economy. But for the time being, you just don't need to make as many cars as you used to. You're a long way away from being able to simultaneously have a car that people really want to buy AND being in an economic climate where people can afford to buy them.
- Don't partner up with the devil, just this once. A marketing strategy that encourages people to buy cars when in fact we all KNOW that people in risk of getting laid off in even the most minute way should NOT buy cars is evil.
I'm not sure this needs to be this complicated. I think the discussion in your executive sales and marketing meeting should sound more like "How do we conserve resources, downsize and put ourselves in a position to be competitive five to ten years from now?" rather than "How can we get poor people to buy expensive cars right now???"
I'm just saying. And I am a marketer in a somewhat evil industry, but I still manage to do that with my morals in tact most days. You can, too. Promise.
I'm confused. I'm confused by this sudden marketing ploy to get people to buy cars by guaranteeing to cover the payment for up to six months if the purchaser loses his or her job.
I understand your logic. I understand it because I watched the CNN segment where whomever the new GM CEO is explained the logic:
- Getting out of bankruptcy requires that you sell cars
- Selling cars requires that people want to *buy* cars
- People don't want to buy cars right now because it's a recession and they may lose their jobs soon
- Therefore, in order to entice people to buy cars, we'll take away the fear that they'll lose their car if they lose their job by ensuring that the payment is covered
- Hence, people will buy cars and we'll climb out of bankruptcy!!!!!!
Now, I am no economics professional, but I do have to account for a substantial amount of profit and loss and even potential loss (which we call risk assessment, and is a sales and marketing analysis you seem to have not ever put in place) on a daily basis. So I understand a thing or two about the idea of giving away money to get money. But again, perhaps I'm just confused here. But here's what it looks like to me:
- Your company (and others like it) spent years running a glutted operation. This, we know, is only partially your fault because you were being butt raped by the also out of control auto workers union (and hey, this is being said by somebody who's decidedly pro union).
- The federal government had to bail you out because between you and the union were running your business like it existed in a communist economy, not a capitalist one. We enabled you to continue this thinking with continued bail outs that both the government and the general populace let go pretty much un-noticed, so we suck. There were several bailouts, but the most recent one was clearly the most offensive one
- You have taken that money and decided that the solution to your financial woes is to just "convince people to buy more cars" and you're going to do that by basically giving back x percentage of the money the US government gave you to people who lose their jobs and can't afford their car payment, lessening their fear of having to reduce their own spend because we're in a recession.
Does this make any sense at all? To anybody?
Here's what you actually need to do:
- Default on many of your union contracts. Sure, they will take you to court, but at last check, blood could not be squeezed from a turnip and the national sentiment towards unions, particularly the auto union, is decidedly "anti." You'll come out way ahead as compared to just continuing to pay out $3000 per automobile sold into union pension plans.
- Downsize your operations even more. Sure, I know you've already laid a lot of people off and closed factories, and that the trickle down from that in terms of suppliers, restaurants, etc. is painful for the economy. But for the time being, you just don't need to make as many cars as you used to. You're a long way away from being able to simultaneously have a car that people really want to buy AND being in an economic climate where people can afford to buy them.
- Don't partner up with the devil, just this once. A marketing strategy that encourages people to buy cars when in fact we all KNOW that people in risk of getting laid off in even the most minute way should NOT buy cars is evil.
I'm not sure this needs to be this complicated. I think the discussion in your executive sales and marketing meeting should sound more like "How do we conserve resources, downsize and put ourselves in a position to be competitive five to ten years from now?" rather than "How can we get poor people to buy expensive cars right now???"
I'm just saying. And I am a marketer in a somewhat evil industry, but I still manage to do that with my morals in tact most days. You can, too. Promise.
posted by pregamejocelyn at
7:08 AM
permalink baby
5 Comments:
I notice you didn't mention the private jets or huge bonuses CEO's were dolling out to themselves all this time....It would take alot of pensions to equal one of those bonuses....or jets.
By
joel, at 11:39 AM
I would love it if you would take on the banks next. We just had a huge one fail on our dairy farmers in Colorado. Fuckers.
By
Hilary, at 8:34 PM
Actually, the pension issue is largely a healthcare cost issue. A couple of years ago, the auto industry execs testified to Congress that they supported some kind of nationalized healthcare system. If I remember correctly, the execs said they had to tack on something like $2500 per car just to meet their healthcare obligations--which in Japan, because of their healthcare system--they don't have to. So, Obama is right in that if we can control healthcare costs nationally, we can make our industries here more competitive globally.
Don't have an issue with jets: corporate execs need to get here and there at a moment notice. But Joel's point about bonuses is spot on.
By
David, at 9:05 PM
And, to further your point, I also noted that the auto companies--in order to sell cars--are now extending credit to folks with increasingly bad credit. Hello? Isn't this what fueled the mortgage crisis??
By
David, at 9:07 PM
The thing about the bonuses, dear Pook, is that while it's in excess, looking at it as a raw number is misleading. For most of those execs, the *majority* of their compensation is in the form of a bonus. So when you look at a million dollars per in bonus, what you're really looking at is their payroll. And while those yahoo's have proven their not worth millions in payroll, that is the going rate.
I'm pro-union. Don't hate on my like I'm not. That union is not good. I think I saw the same thing you did, Dave, about the health care issue. But a non-union locked employer could then reduce the quality of benefits offered, and of course the outcome of that would be immediately bad, but would also have spurred many union employees (who support lobbiest who have been decidedly anti-healtcare) into being more pro nationalized healthcare. Auto couldn't do that because they're locked into standards by the union.
I'm not dogging pensions Joel, but the reality is these ones were not only too generous, they were unreasonable from the beginning. I'm pro-pension, but a person isn't supposed to be living the same quality of life on a pension alone as they did on a salary. A pension is supposed to *support* the savings you made throughout your life - not replace your income at over 70% in some cases and provide you with exactly the same quality of benefits.
Nobody, last check, was letting the execs off the hook. If I were that bad at my job I'd be fired long ago. But it's not a one sided story. Workers and unions were just as greedy, and in some ways worse. Go look at the publicly released figures for Ford. Exec salary does not take up the largest line item by far. People always want to point at the people with the highest pay scale as the ones who are responsible. They managed badly, but in this case at least, they weren't the only ones who dragged this down.
By
pregamejocelyn, at 6:42 AM
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