Unless the Big 3 auto companies and the unions figure a way out of this mess, millions of job losses are exactly what could happen over time, even if government does come to the rescue.
The current debate about whether the auto industry should get a government bailout package has captivated the news media. Every day, politicians thrash out the pros and cons of a bailout package.
The argument put forward by the current and incoming administrations is, if we don’t do this, we stand to lose our manufacturing sector, and with it, a great part of the nation’s heritage that emanates from the auto industry.
While all of the above are real issues, how we deal with these issues will ultimately define us. I’ve always viewed the United States of America as the land of the free and the home of the brave.
If this is true, the first question one has to ask is, As free people, are we not responsible for our actions? The second question is, As brave people, are we not brave enough to chart a course through the rough parts of life and figure out how to survive?, as we have done for centuries.
The problem I have with the government’s corporate ‘soup line’ is these companies are not taking responsibility for their actions. Instead, they’re feeding the phobia. If we don’t get this bail out package then it will be on the nation’s collective conscience that millions of people may lose their jobs.
The real truth is that unless these companies, and the unions, figure a way out of this mess, millions of job losses are exactly what could happen over time, even if government does come to the rescue.
The crux of the matter is that both the unions and management of these Big 3 companies share the blame – equally. They have not done anything over the years to change the course of their own destiny and ultimately the destiny of their employees.
Unions continue to push for compensation packages out of sync with the realities of the auto business plus, they’re unwilling to work with management to figure out a solution that will make the car companies and the automobile industry more cost competitive.
Big 3 management have done nothing to focus their businesses on producing quality automobiles that consumers will choose over the competition. Instead, they have continued to operate in business-as-usual fashion, in the hope consumers will just continue to buy their products.
A good business is not run on hope; its run on sound business plans, the lack of which has resulted in the inability of the Big 3 to weather rough times.
One is compelled to ask, why is it that Honda, Toyota and late-comer, Hyundai have each been able to manufacture cars on American soil and dig deep into the American automobile companies’ market?
The answers are not that complicated.
Toyota, Honda and Hyundai have tooled their U.S. factories to run efficiently and they’ve trained their employees to produce a quality product. Furthermore, they have designed a product the consumer wants – a fuel-efficient automobile that can be relied upon.
Toyota and Honda have been eating the lunch of American automobile manufacturers for years. Yet, U.S. auto companies have done nothing to make desperately needed changes to repair management shortcomings.
Meanwhile, labor unions have been turning a blind eye to all of this saying, it’s not my job, when that’s exactly whose job it is.
Unions must work with management and figure out what needs to be done in order to win back lost market share. Where we are today is a result of failed U.S. auto industry management and failed union policies.
So, should the American taxpayer take on the responsibility of bailing out failed businesses? If we are to do this, are management of these companies, and the union bosses that have allowed the situation to deteriorate to this point, willing to take responsibility and step down?
Let these companies, and the unions, be run by those who are better equipped to lead them / us out of this mess. Or, should we do what a free nation (one that has been a beacon of free enterprise, would do – leave it to the shareholders to come up with a solution. If this means making some tough choices and filing for bankruptcy and reorganize in order to begin the process of rebuilding, then those tough choices need to be made.
These are the types of tough choices facing us in these tough economic times – thousands of companies around the country face these issues and are doing so quietly. Why then should the Big 3 car manufacturers be the exception to the rule?
I feel the Big 3 need to do the following:
- Re-size their businesses to a level they can support, and if this means layoffs, then so be it.
- The unions need to open their eyes to the realities around them and stop asking for compensation packages that offer little in return to the companies they’re working with.
- Both sides need to sit down and work out a compensation package that makes the companies more cost-competitive and, at the same time, develop a performance sharing concept where both sides take joint responsibility and share the rewards.
- Retool the factories to make them more efficient while completely closing inefficient factories.
- Review supplier performance and costs – working with suppliers to achieve a more competitive cost basis.
- Develop employee training programs that raise awareness of the business, its costs and quality issues.
- Design better quality and more fuel efficient cars the public actually wants (not what the Big 3 think the public wants).
- Regain market share by being the first-to-market with environment friendly cars.
- Work with partners in developing countries to gain a foothold in those countries.
- Set business goals and disseminate them throughout each organization, so that each individual is aware of the overall corporate goal.
These are tough times. No one likes to see anyone lose their job. We have all been there and it’s not pleasant.
This is a time for us to set a clear, national path. We are free to make choices and brave enough to live by them.
Anything that comes up short of this will see us lose a much bigger part of our national heritage and which is going for the gusto, alone, and winning.
As a nation, it is our actions based on our national philosophy that will define us in the end. Once our actions are fearless and strong, only then shall we be strong. We must take responsibility for those actions. Share your thoughts below.
Bal Singh is a Silicon Valley veteran with more than 20 years of experience at the executive and officer levels managing product quality; global operations and advanced manufacturing, sourcing and supply chains at venture-backed startups and Fortune 100 companies serving the electronics industry.
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