I support the auto industry bailout. I just moved from Michigan to North Carolina, but my home in Kalamazoo is still on the market. If the automakers fail, THREE MILLION jobs will be at risk — and my mothereffin house will never sell.
If the government doesn’t get this right, I am going to lose it all: my equity, my savings, my shirt, my marbles, and my sanity.
So here are my thoughts.
- Demand innovation in return for a federal investment in the auto industry. A major automaker that accepts the bailout must commit to offering a four-door sedan that gets 60 mpg and costs under $15K by 2012.
- Offer incentives for Americans to buy these cheap, fuel efficient, totally basic cars. Appeal to our sense of patriotism. I would drive a “Chevy Patriot” if it got 60 mpg, came in a decent color, and looked like a Toyota Corolla — and if the government gave me a rebate for purchasing the car.
- Move all autoworkers and non-union employees to the federal health program, whether it’s the congressional plan or Medicaid. I don’t care. Take the burden of health insurance off the automakers. No exceptions. Not even for Rick Wagoner.
- Require wage concessions. No autoworker in America should earn more than a school teacher. No president of an auto company should earn more than the President of the United States.
What do you think? Did I miss something? Can someone please call Chris Dodd and tell him that Laurie Ruettimann, SPHR, has the answer to the fiscal crisis in Detroit?
Now if you’ll excuse me, I’m off to fix the Middle East peace crisis with my awesome HR skills.
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I agree with everything you said. I would add on the innovation part, that if the auto industry does not improve and the foreign automakers are still kicking our ass, the government should takeover the industry, fire the board and fire the executives. The government needs to tell the auto industry a strict strategic plan and zero tolerance that if anytime they swerve, the government has the right to takeover.
I would put this slogan for all automakers (from Glengarry Glen Ross):
First Place – A Cadillac
Second Place – Steak Knives
Third Place – You’re Fired.
Guess where GM, Ford, and Chrysler are?
You beat me to it Tracy!
I have no faith that the executive teams and Boards that put the Auto makers where they are can suddenly be successful just with a pile of cash. (This should go for every organization that we are bailin’ out)
They do need to send the leadership away and bring in a strike force leadership team to execute the plan.
New times call for new leadership right?
Laurie, this is AWESOME. And right on the money.
Tying performance to any bailout seems like a no-brainer, but it hasn’t been emphasized.
AIG blew through most of its money and kept the party going like it was 1999 (or more accurately, 2003).
I love this idea. One of my favorite ideas put forth by the Obama campaign was about corporate tax breaks – that they also should be tied to performance. Companies would have to do stuff like, y’know, keep jobs in America in order to get the benefit.
Why not? (After all, every employee’s continued compensation is tied to performance.)
Not a bad idea at all. Now what are your plans for the Middle East?
“No autoworker in America should earn more than a school teacher.”
What auto workers are you talking about? Which teachers? Are you arguing that a Ph.D. engineer at Chrysler, after twenty years on the job, shouldn’t make more than a neophyte kindergarten teacher?
For that matter, who should earn more than a school teacher? Should air traffic controllers earn more than school teachers? Police officers? Physicians? Investment bankers? Why?
And why is it that you want other workers to be paid less, rather than calling for teachers to be paid more?
@Tracy Wow, that’s awesome. Great suggestions and EXCELLENT Mamet reference.
@nelking We voted for change in our government. Can we vote for change in Corporate America?
@HR_U Just wait & see.
@Aaron I come from a family of teachers and I do call for them to be paid more. Lots more. I just didn’t call for it in this post. I’m married to a PhD who works in research. He should have unlimited earning potential, just like a neophyte kindergarten worker.
Thanks for saving all those days, SoopahLaurie!
Wherz mah cape?
We don’t need to move the workers to the fed health care plan. The UAW has a many billion $ VEBA ready to kick in 2010. All we need to do is get ‘em there.
Oh, the auto makers have to fund that too. (crap)
Thanks for this!! I hope you don’t mind that I borrowed your thoughts for a letter to my local Congressional reps!
@Joanne Thanks, what a nice comment!
Interesting plan on auto bailout…
- If you look at the annual reports of the Big 3 you’ll find that they burn through billions of dollars each year “innovating”. It’s called R&D. Telling them to innovate (which is what most good companies do as a matter of survival and don’t need to be told or SUBSIDIZED – Apple anyone?) won’t make it so. Besides, they’d rather spend billions lobbying Washington not to penalize them for cranking out inefficient, badly made SUVs.
- On rebates and incentives, why should the government pay for people to buy a car from one company over another? Oh wait, the government doesn’t have money unless it taxes its citizens. So you believe the taxpayers should pay other taxpayers to buy a car from 3 of the most poorly run companies in the history of our country.
- On your car idea by 2012, not possible because unions won’t allow the companies to purchase labor on the free market. Honda and Toyota plants in the US pay 1/2 the labor rate that GM et al pay. So the only way that they can make your car at your price and have a profit is to tear up the union contracts (not get wage concessions). It all has to go. You can’t pay laid off worker’s 90% of their salary and be competitive. Or pay $100k for line workers.
- I don’t know where to start on “taking the burden of healthcare off automaker’s” Seriously?!? All other industries have profitable companies and they ALL have the burden of healthcare. Why does one industry get help? For decades, auto workers did not get any increase to their healthcare costs as millions of Americans in every other industry were squeezed by their employers with increasing premiums, copays, and Rx costs. These companies had to shift the burden to the employees to remain viable. Detroit refused…so now taxpayers must pay the bill?!?! We are paying our own healthcare costs..why must we (and our children since we’re talking billions) pay Detroit’s too?
- On CEO pay. No one wants this job unless there are incentives. It’s too crappy. Supply and demand dictate the salary. We just need to hold boards to not compensating CEO’s that don’t bring shareholder value.
Here’s a link on what the bailout should look like if we actually have to do down this path…
http://online.wsj.com/article/SB122628230122212449.html
For the record, I feel bad about your house, but that’s a whole other issue and bailing out Detroit (which won’t work – they’ll burn through the capital and the local economy won’t improve) doesn’t fix the housing market.
@MD Whoa, what a great & thoughtful response. I need to think about your points a little more and I want to read Romney’s piece. Honestly, there are no easy solutions and it will be ugly no matter what happens. I’m not worried about my house as much as I’m worried about people in Michigan who depend on pensions, health care, employment, etc. There is plenty of blame to go around. More on this SOON.
@Patrick Your comment originally went to spam. Thanks for the comment. You are so awesome to link HR to Obama!
i love all things laurs — your house, your michigan roots, and your passion. i am in nyc and work for a major media company whose biggest advertisers (and main source of revenue) are (or were) located in detroit.
indeed, millions of jobs and livelihoods are tied up in this thing, yet i am not so sure i want it to go through in a big way.
risk taking is fundamental to innovation and innovation is fundamental to successful enterprises. generous government subsidies would inhibit and even prevent the process of innovation in the very way that the UAW (and the complacent execs and politicians who laid down with them) have prevented the big 3 from innovating over the past two decades.
@cols I can’t disagree with you in principle. As the old saying goes, “Give a man a fish, and he eats a decent meal. Teach a man to fish, and he turns around General Motors.” I’m not pro-handout, but I hate seeing the banking industry get a welfare check while the auto industry (and its suppliers, employees, etc.) gets the shaft.
The US Carmakers have been in crisis for over 12 years. Cumbersome processes and technologie from the stoneage. This is not a new crisis because of the general recession. I would not bail them out, or only with strict trings attached.
if I buy an american brand suv, it is made in nuevo laredo, mexico. if i by a japanese brand suv, it is made in the us. that explains the problem.