Senator Shelby Recuse Thyself

Occasionally when consulting with Boards of Directors, especially on matters requiring a vote, it is necessary to recuse or withdraw a member from a position of judging so as to avoid any bias or appearance thereof. This past week as the Senate debated the automotive bridge loan, I watched with a tremendous amount of frustration as Senator Shelby of Alabama continued to unabashedly destroy the domestic automotive industry. The fate of our entire nation rests in the hands of a man that simply wants the Big 3 to fail.

Why would that be a priority to Shelby?

At the end of this entry, I have given you a link to see what automotive industry currently resides in Alabama. When you look at this list, it appears as though you might be reviewing an industry site in Japan. Here are some of the automotive companies in Alabama; Mercedes, Honda, Hyundai, Toyota, Yachiyo Manufacturing, Kwang-Sung, Hwashin and more. Not one General Motors, Ford or Chrysler. Now it is abundantly clear why Shelby has that continuous grin that looks strangely familiar to the one my cat gets when she has destroyed another Christmas ornament.

Admittedly, in the last ten years these, non-Big 3, companies have brought 35,000 new jobs to Alabama. Again, let me remind you that I talk to people about the need and importance of setting their personal and professional priorities and Shelby has his; protect 35,000 jobs in Alabama and kill 2-3 million automotive associated jobs elsewhere in the United States.

Then Senator Shelby makes a statement about how the Big 3 can’t design or build the cars that Americans want to drive. Rest assured the Senator hasn’t driven a CTS, Tahoe or a Corvette

My Corvette in the Garden of the Gods

My Corvette in the Garden of the Gods

lately. When he makes statements like that, it’s obvious he also hasn’t taken a test drive in the Malibu, G-6 or Mustang. The Big 3 also offer some of the best trucks in the world, and people want them!

Don’t get me wrong! Many American companies lack the true leadership to get through tough times. An old Economics Professor at U of M told us there are two ways to grow profit: Increase revenue or decrease cost. Many of today’s “leaders” take the ostensibly easy way and cut costs. Layoff people, cut quality and/or quantity, reduce programs and training…cut, cut, cutting their way to profitability. Significant changes in the leadership must be made and perhaps a strong “Car Czar” is a good idea.

Don’t get me started on greed! There is more than enough to go around. Company executives and the bonuses are merely out of control. The UAW has “United” itself out of working on autos. Both sides better get real, real quick. Everybody needs to cut back, but not just in automotive. Everything from Dockers to Doctors needs to reduce their pricing. Greed is aplenty and we will not survive if we allow it to cloud our vision as we set our priorities and make important decisions.

That brings me back to the Senator from Alabama.

This article might likely cost me a speaking gig or two because it will upset someone in a key decision making position. But, in difficult times, we ALL need to stand up for what we believe. Whenever we find ourselves entrusted with a leadership position, we cannot let greed and individual priorities get in the way of doing what is right and just for the greater good, not just for my business, or your industry, or the Senator Shelby’s state.

Another point must be made in this regard. If Carl Levin, D-MI were in a leadership role on this committee, I would also recommend he remove himself from facilitating the discussion on this topic. He too would have such a vested interest in the outcome that his judgment would be clouded and overly biased.

In closing, let me say it is apparent that Senator Shelby believes in doing what’s good for Alabama and has made that his priority. He certainly is not focused on what is necessarily good for the people of the entire United States.

Senator, shouldn’t you recuse yourself?

 

See The Alabama Industry Profile:   http://tinyurl.com/6mrpvx

 

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6 Comments

  1. I have to agree that the BIG 3 should not fall however, the UAW is the real problem. No UAW in Alabama! If the UAW would understand the world has changed and quit trying to fund the retirement accounts of former auto workers and negotiate a reasonable hourly wage, then the United States Government would have been to the rescue by now. Heck, they can just keep printing more cash to keep bailing out companies led by bad decision makers!

  2. thecpo

     /  December 16, 2008

    Ed,
    There is plenty of blame to go around and not enough “reasonableness.”
    Thanks for the comment!
    TJ

  3. Concerned Citizen

     /  December 17, 2008

    Although the American domestic auto industry’s current condition is the result of a multitude of interrelated causes, some contributing greater than others, there is no “silver bullet” that will resolve this. The UAW is not the cause. Legacy costs for GM are the greatest of any company in the world. However, everybody must also keep in mind that for 80 plus years, General Motors was the single largest employer in the world. Obviously, there are going to me more retirees from GM than any other company, Japanese or otherwise. UAW worker are not being hired at $14 per hour. Yes, labor in India, Korea, and Mexico is cheaper. But, do you want to live where it is commonplace for a family of 5 to ride around on a Vespa because automobiles are too expensive for their wages? Poor quality is not the cause. Buick has surpassed Toyota in many quality measurables. Poor fuel economy of American vehicles is not the cause. I owned a 4000 pound Buick Park Avenue that would get 30-32mpg on the highway and averaged 26-27 in all around driving. A Corvette will get 27mpg on the highway and put you back in your seat so hard it nearly hurts. A full size Chevrolet truck has more horsepower and torque than a Toyota Tundra, and gets better gas mileage. There are plenty of vehicles available that will get over 30mpg from the “big 3”.

    Too many people are saying that the US Auto Industry should “take a lesson” from their Asian counterparts. However, one can only wonder how familiar those who make this claim are with the true status of the Asian auto manufacturers, and how they became what they are, and are where they are today.

    Hyundai is the 7th largest automaker in the world. They are based in a country that exercises protectionist trade policies, and promotes the only means of true growth and survival, export. The Korean Government is building infrastructure to support development of their automotive parts industry. Literally hundreds of millions of dollars of government money spent every year supporting research and development, infrastructure, training, etc. For development of technology to support “futuristic automobiles” (read – hybrid and alternative fuels), the Korean government is providing $614 million through 2014 in one grant. There are many more that I simply don’t have the time or inclination to cite. That’s a lot of money in Korea where some people earn as much in a month as we do in a day. In order to become a presence in the global market, their governments support was necessary. They could not gain sufficient capital resources to develop competitive products on the scale that they have without the support of their government. They did not have the ability to do it as all American automobile manufacturers have, through true innovation and a free market economy where consumers made the choices.

    China (Most favored trading nation status, yet still a Communist country) has been doing a fantastic job of attracting foreign capital for investment in their manufacturing sector. The only down side, a vast majority of the capital gains remain in that country as the government owns the most significant portion of their manufacturing sector. Without the US, our technology, our human capital, and our money, China would not be where it is today. Sub standard living conditions, sub standard working environments, and nearly no government regulation allowed such low wages that it was impossible for anybody else in the world to compete with their manufacturing sector.

    Before the Korean War, Toyota was restructuring with support from the Bank of Japan – the government. OK, ancient history. How about recently? The Japanese government has done a wonderful job manipulating the value of the yen to maintain artificially low prices in the global market. This can be easily researched and very easily supported by anybody who cares to take the time to do so.

    Today, as you read this, the Japanese government is considering a $22 billion proposal that will greatly benefit the Japanese auto industry. According to a recent story on Bloomberg.com by Keiko Ujikane, “A panel from the ruling Liberal Democratic Party and New Komeito last week said the government should subsidize companies that hire temporary employees and make more people eligible for unemployment benefits. Companies should receive 1 million yen for each contract employee they hire.”

    Did you know that in Europe up until 2002 it was illegal for a domestic auto dealer franchise to take on a Japanese auto dealer franchise? Dual franchising has been commonplace here in the US for decades and provided the Japanese auto industry an economical way to enter our market.

    Does the senator from Alabama still believe that our domestic auto manufacturing industry should not rely on government assistance, while local governments in his state provide significant

  4. Concerned Citizen

     /  December 17, 2008

    Although the American domestic auto industry’s current condition is the result of a multitude of interrelated causes, some contributing greater than others, there is no “silver bullet” that will resolve this. The UAW is not the cause. Legacy costs for GM are the greatest of any company in the world. However, everybody must also keep in mind that for 80 plus years, General Motors was the single largest employer in the world. Obviously, there are going to me more retirees from GM than any other company, Japanese or otherwise. UAW worker are now being hired at $14 per hour. Yes, labor in India, Korea, and Mexico is cheaper. But, do you want to live where it is commonplace for a family of 5 to ride around on a Vespa because automobiles are too expensive for their wages? Poor quality is not the cause. Buick has surpassed Toyota in many quality measurables. Poor fuel economy of American vehicles is not the cause. I owned a 4000 pound Buick Park Avenue that would get 30-32mpg on the highway and averaged 26-27 in all around driving. A Corvette will get 27mpg on the highway and put you back in your seat so hard it nearly hurts. A full size Chevrolet truck has more horsepower and torque than a Toyota Tundra, and gets better gas mileage. There are plenty of vehicles available that will get over 30mpg from the “big 3”.

    Too many people are saying that the US Auto Industry should “take a lesson” from their Asian counterparts. However, one can only wonder how familiar those who make this claim are with the true status of the Asian auto manufacturers, and how they became what they are, and are where they are today.

    Hyundai is the 7th largest automaker in the world. They are based in a country that exercises protectionist trade policies, and promotes the only means of true growth and survival, export. The Korean Government is building infrastructure to support development of their automotive parts industry. Literally hundreds of millions of dollars of government money spent every year supporting research and development, infrastructure, training, etc. For development of technology to support “futuristic automobiles” (read – hybrid and alternative fuels), the Korean government is providing $614 million through 2014 in one grant. There are many more that I simply don’t have the time or inclination to cite. That’s a lot of money in Korea where some people earn as much in a month as we do in a day. In order to become a presence in the global market, their governments support was necessary. They could not gain sufficient capital resources to develop competitive products on the scale that they have without the support of their government. They did not have the ability to do it as all American automobile manufacturers have, through true innovation and a free market economy where consumers made the choices.

    China (Most favored trading nation status, yet still a Communist country) has been doing a fantastic job of attracting foreign capital for investment in their manufacturing sector. The only down side, a vast majority of the capital gains remain in that country as the government owns the most significant portion of their manufacturing sector. Without the US, our technology, our human capital, and our money, China would not be where it is today. Sub standard living conditions, sub standard working environments, and nearly no government regulation allowed such low wages that it was impossible for anybody else in the world to compete with their manufacturing sector.

    Before the Korean War, Toyota was restructuring with support from the Bank of Japan – the government. OK, ancient history. How about recently? The Japanese government has done a wonderful job manipulating the value of the yen to maintain artificially low prices in the global market. This can be easily researched and very easily supported by anybody who cares to take the time to do so.

    Today, as you read this, the Japanese government is considering a $22 billion proposal that will greatly benefit the Japanese auto industry. According to a recent story on Bloomberg.com by Keiko Ujikane, “A panel from the ruling Liberal Democratic Party and New Komeito last week said the government should subsidize companies that hire temporary employees and make more people eligible for unemployment benefits. Companies should receive 1 million yen for each contract employee they hire.”

    Did you know that in Europe up until 2002 it was illegal for a domestic auto dealer franchise to take on a Japanese auto dealer franchise? Dual franchising has been commonplace here in the US for decades and provided the Japanese auto industry an economical way to enter our market.

    Does the senator from Alabama still believe that our domestic auto manufacturing industry should not rely on government assistance, while local governments in his state provide significant incentives to build the manufacturing base in his state, primarily Asian companies?

    OK – so does everybody still believe the Big 3 should be more like their Asian counter parts? Anybody who truly believes that must also believe that perhaps we should not only allow this “bridge loan”, but make it a “gift”, and put money towards research and development, infrastructure for technology, and put protectionist trade policies in place here in the US that make it impossible for Asian auto manufacturers to do business as profitably as they have been over the past 30 years. That certainly would be taking some lessons from our Asian counter parts………

  5. thecpo

     /  December 18, 2008

    Concerned,
    Thanks for the comment. You have really done your home work and made some very good points. Thank you for your input and perspective on this very important topic. The great thing about blog’s is that they help people think and allows them to see topics that are not filtered by main street media.
    This should make us all Concerned.
    TJ

  6. Amy Davis

     /  December 20, 2008

    Saw this on MSN and thought your readers might enjoy.
    —————————————————————-
    Saving Detroit

    Regardless of what you’re hearing these days, America’s Big Three automakers build some quality vehicles. Here are 10-plus-1 rides worth a second chance.

    By Lawrence Ulrich of MSN autos

    If anyone could use a hug right now, it’s the three automakers from Detroit. Thankfully, it just came from outgoing President George W. Bush in the form of a $13.4 billion loan, drawn from the $700-billion financial rescue fund. Of the sanctioned amount, General Motors will get $9.4 billion while $4 billion will be given to Chrysler LLC, according to the U.S. government. Another $4 billion will be made available to Chrysler and GM in February as well. Now, the Big Three have until March 31 to get their acts together, or else.

    Sounds a little harsh, well tough love is about all the automakers can expect — and should expect — from the American people and lawmakers in Washington, D.C. these days. When you’ve been leaking market share for decades, your business model is cracked like an old engine block, and you’re asking taxpayers to bail you out with billions they can’t spare right now, some skepticism is in order.

    But the question still remains: Do they deserve this reprieve?

    And then I slip behind the wheel of the 2009 Corvette ZR1 and blast down the Las Vegas Strip. This $105,000 land rocket is fast and formidable enough to make most Ferraris and Porsches quiver like schoolgirls; it has a top speed of 205 mph and is as nimble as a gazelle. And as I leave the glitzy hotels behind for the speedy straight-aways of the desert outside Las Vegas, I realize if Detroit’s tormentors spent even five minutes in this magnificent machine they’d know the truth: The Big Three can still build a world-class car — at least when they put their minds to it.

    Click picture to enlarge 2009 Chevrolet Corvette CoupeNow before you scoff and say, “What’s a 638-horsepower sports car got to do with anything?” consider this: The point is not that the Corvette is the solution to GM’s problems. The point is that if Detroit can build a sports car that’s a sales sensation and acclaimed the world over, there’s no reason it can’t do the same with economy cars, luxury cars, hybrids, you name it. That is, if they survive long enough to get their collective acts together.

    The ‘Vette isn’t the only car that runs roughshod over the notion that nobody wants the Big Three’s wares. If that were true, then GM wouldn’t have outsold Toyota by 1.2 million cars in the U.S. in 2007. Yet, if one or more of these companies does fade away, America will miss out on some worthwhile machines.

    We’ve assembled a list of the Detroit cars most worth saving. The list is revealing, spotlighting the strengths and weaknesses of the Big Three. Our terrific 10 includes a pickup truck, a minivan and two crossover utility vehicles. Yes, Detroit still knows how to build a great truck.

    Read the rest of this article and view photos of the highlighted vehicles from the Big 3:

    http://editorial.autos.msn.com/listarticle.aspx?cp-documentid=786706

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