Comments

Hmm...maybe we should re-introduce the draft. This time for knowledgeable executives who can (and must) lead American companies out of the mess they are in.

P.S. If any of your suggested executives won't join the car companies, how about drafting Steve Jobs? If he can't help 'em...close 'em down!

Posted by Joel Heffner at November 21, 2008 11:18 AM

Funny, Joel, about the draft! Great idea! Or, perhaps one that includes fresh ideas from the younger generation too.

I wish that this issue included only Detroit and this industry, but it doesn't. The tentacles of the Big Three are far reaching.

Posted by Judith Ellis at November 21, 2008 11:41 AM

I live in Detroit and get to see and hear the auto-execs on a regular basis. I wish I could say their performances before congress were an anomaly but sadly they were not. They exist in the paradigm that caused the problem...and made them multi-millionaires. What is intuitively obvious to most is unthinkable to them.

I say bring in GeneralTommy Franks, let him clean up the mess, and then bring in any of the leaders mentioned earlier.

Posted by Jim Outland at November 21, 2008 12:53 PM

Like Jim, I also live in Michigan, just right outside of Detroit, and read and hear the daily news. I also have two very good friends who are senior executives with two of The Big Three. BOTH are brilliant and creative. While there may be a need for change at the very top, there are very good senior executives underneath these.

Posted by Judith Ellis at November 21, 2008 1:13 PM

Judith, you and I have talked about this...as Michiganders, many of my friends are execs as well..but....the culture is so entitlement based, I really find the level of talent at the top a step below the norm..Good people, bad system...mtn

Posted by Mike Neiss at November 21, 2008 1:19 PM

I agree, Mike.

Posted by Judith Ellis at November 21, 2008 1:26 PM

Rick Wagoner can go, let Maximum Bob Lutz run the place since he is about the only reason that GM is still in business. Allan Mullaly is doing a tremendous job @ Ford, that is a completely different company than it was 24 months ago.

As for Chrysler, time to have Tata or Nissan Renault just take it over. Minimum Bob Nardelli had no business running a lemonade stand, let alone a car company after what he did to Home Depot.

The last thing Detroit needs right now is bring in people who have no idea on how to run a labor and research intensive manufacturing company. It's all about the product, plain and simple

Posted by Eric Trytko at November 21, 2008 1:56 PM

Tom....

If Mickey Drexler (and his partner Margot Brunelle-Fooshee) ran Chrysler he would never have the time to go to Washington because he would be too busy "Managing By Walking About"... Mickey will tell you Tom, as I am sure you know, that he could not do the job because all he knows is clothes, cloth, sewing, and 'value for money' in fashion retailing... But to have Mickey's charm, character, warmth, openness, and humility even connected with a big three auto maker is a precious idea.

If Lee Scott ran Ford then he would go to the Senate to tell them stories about his excellent front line managers/employees, to inform them about his new health care plan, to shame them with his practical plans to contribute to a low carbon footprint across America with better cars, to tell them how energy efficient he has made Ford through his use of C21st thinking in the production and distribution of cars. Most of all Lee Scott would be able to tell the Senate the retail (and current discounted price) of every part in every car Ford makes... Now that would be a Senate appearance I would love to see...

I have no personal insights into Herb Kelleher but I gather you do and it must delight you to just sit, for a moment, and imagine his appearance before the Senate as head of GM...

The thing is none of these three would be going to Washington with a begging bowl....

Richard.

Posted by Richard Lipscombe at November 21, 2008 5:36 PM

Hope I don't offend. Apologies if I do...

Southwest isn't a small, affordable upstart anymore. The employees are hands-down the best among the airlines.
Wal-Mart? Ask small business owners (mom and pop stores) in America's small and mid-sized downtowns about Wal-Mart.
J Crew (to me) seems to be a necessary brand among the preppy set. Didn't we just witness/read about class-ism with a mix of privatized gain and socialized loss in Congress this week?
And, I'll go ahead and say it as one else ever does: Why are white men the only people who seem to be able to run (or run into the ground) company after company? I look at those profile photos in the paper/online. I mean really look at them.
I think people who look like me should have every opportunity to screw up and walk away with millions too ya know?

Posted by nextgenradio at November 21, 2008 7:48 PM

Thanks, nextgenradio. Your points are received. But two words: Stanley O'Neal. Look at what a great raving success he was, right up there with the rest of "the White men," some would say. Some might also say that his practices were as unethical as the rest. Greed and the lack of ethics have no race or gender bias some might also say.

However, as I read TP’s list I did wonder if there were any women, say Carly Fiorina or Meg Whitman, who might also be able to lead these companies. Regarding marketing, I do not think that it needs to be marketed to everybody; there are such things as niche markets, no? But I must admit that American popular culture, especially its music and style, presently transcends all markets and all nationalities. Popular culture generally seems to have this kind of impact.

Your comment reminded me of a book I read years ago by brilliant businessman, Reginald F. Lewis entitled, "Why Should White Guys Have All the Fun?" If you haven't read it, it's a good read. Lewis' TLC Beatrice reported revenue of $1.8 billion in 1987. In 1997 Beatrice Holdings International had $2.2 billion in sales and was Fortune's #512 of 1,100 companies. Lewis was "who was one of the most successful business leaders during the 1980s." (Wikipedia.)

I remember carrying that book around with me for weeks when I lived in New York, even after I had finished it to whip it out on the subway or in a cab. I even wrote a letter to his wife of the impact it had on me. She responded in kind more than a few times with advice. At the time, I was studying opera and the book had a major impact on me. His story is awe-inspiring no matter your profession, race, or gender.

Best nextgenradio in all of your efforts.

Posted by Judith Ellis at November 21, 2008 9:10 PM

What do Kelleher, Scott and Drexler have in common?
They are from service industries. That's one of the problems. America has become a nation of shop keepers with no industrial base. This is a result of the "capitalist pig" philospophy where the bottom line is profit. This philosophy does not take into account what might actually be good for a nation. If the automobile companies were forced (by government regulation) to make energy efficient products back in the early 1980's and then given finiantial help to achieve the goals, they would be better off today. But of course this goes against free market dogma of people like Ronald Reagan. Regulation would have strengthened the auto industry. Also, if health care could have been moved from a responsibility of employers to a responsibility of the government, the auto companies would be better off. The problems the auto companies are having is not only due to bad management within the industry. Government also shares responsibility. Also,for more than 20 years, pundits have been selling the idea that workers in the future will not be working in factories - they will all be 'liberated' in some way - the problem is that there are people who just want a good job that pays well - they are people who do not need to be 'self actualized' - they just want a job so they can raise a family. Work is not the center of these people's lives. Silicon Valley is 'sexy' and automobile companies are not. The blame for the problems of the American Automobile industry cannot be put solely on the management - and it has nothing to do with how the executives move themselves aroubd the coutry. The main reason the whole corporate jet thing is being discussed is because people in congress knew they were on TV and knew that mentioning it would make great sound bites for cable news.

Posted by zed at November 22, 2008 9:20 AM

Thank you, zed, for that. Much of your comment echoes that of Jack Bogle and my newly found hero, John Maynard Keynes.

Posted by Judith Ellis at November 22, 2008 10:06 AM

Judith - What I believe is that we are all in this together. That's the way people in a nation are supposed to think. That is the reason I voted for Obama. He was the first seroius Presidential contender that I can rememeber who talked about the United States being a single nation.

Posted by zed at November 22, 2008 10:40 AM

Zed - We are indeed a nation, singular. Thank you. I distinctly remember your comments here about the President-elect, as well as your cultural criticism. I'm appreciative of your wit, balance, inclusiveness, breadth, and brevity-something I often lack :-) Continued blessings...

Posted by Judith Ellis at November 22, 2008 11:08 AM

I live in the Flint area, have a background in industrial relations, and know the people and issues well. The fact is, the auto executives work for the UAW. Kelleher, Scott, Drexler, these people would do nothing for the auto companies because the UAW is the big man on Detroit's campus. A company can't survive if half its employees refuse to accept responsibilty for making a profit. Bankruptcy will be absolutely devestating, but it's inevitable because the UAW has a fortress mentality that can't be shattered without a traumatic event. When GM desperately needed sales over the summer, the UAW authorized local strikes in support of American Axle. They've been doing this for decades. The UAW forced GM to take on Delphi's liabilities, and now the UAW is demanding the waitress at Bob Evans, the party store owner, Joe the Plumber to subsidize the difference in compensation costs between the UAW and its competitors. The UAW is collapsing like the Twin Towers. I suggest you move out of danger so as not to let them fall on your head.

Posted by Michigan and Me at November 22, 2008 11:17 AM

Tom - The only problem with your UAW and Twin Towers analogy is that such a calamity is felt throughout the country and indeed the world. There is no getting out of dodge. However, I do agree with some of your points about unions generally, though they were most needed in a crucial time in our history and perhaps still much needed today. What becomes most necessary, though, is not to negotiate right out of a job. The UAW, by the way, have made concessions and continue to do so.

Posted by Judith Ellis at November 22, 2008 3:22 PM

Great commands that I would like to add to:

I do not believe in Unions, but feel that some industries/companies need them because the execs running the companies do not know how to treat their associates. However, many unions have grown too big and they only think about dues and growing their union size, instead of doing what is right for the company and the associates.

If many companies in the past and present, ran their companies with integrity and ethics. Unions would not have gotten so big and the UAW would not have been a problem for the Big 3.

Companies need to think about their associates & customers as much as they do about turning a profit.

Posted by Sean Arnold at November 22, 2008 6:05 PM

All three of them are also in situations where they have control of their retail distribution channels. Wonder what they would make of the situation in which their distribution is via franchisees who are so densely packed that they mainly compete with each other and who they can't get rid of because of preexisting contracts combined with state laws?

Posted by david foster at November 22, 2008 10:02 PM

Shoshana Zuboff makes a good point in her Business Week "Viewpoint" column: GM doesn't need life support, it needs lifeboats.

http://www.businessweek.com/managing/content/nov2008/ca20081117_996444.htm

What if we forget about bailing out the companies, and instead focused on bailing out the employees? Take the billions that GM, Ford, and Chrysler were asking for, and create safety nets targeted to the employees (and those of suppliers) who will lose their jobs if these companies fold. A pool of unemployment benefits, job training, insurance extension, and placement counseling. Then let the companies die, and release their resources for the market to use.

The harsh truth is that there are other companies in the world that can make cars, and they make better ones. Nobody will go without a car if these companies go away. Zuboff makes the point that GM in particular seems inherently unable to change. So, let's protect the people who would be hurt most by GM's passing, and get on with building something new and great with their talents.

Posted by Bob Watkins at November 23, 2008 10:49 AM

Thank you, Bob, for that. Lois made a similar point on another post and I wondered about its efficacy. The government already has Work First job training programs in many states. While they can be helpful, my work and research with these groups do not give great cause for elation. Many are ineffective with those running the show as ill-equipped as those in training.

Here are some questions:

*How will such a program be implemented?
*What will a roll out plan look like?
*When will it be implemented?
*Who will take care of these families in the interim?
*Who would lead the effort?
*Do we trust the biggest bureaucracy which is the government to do so efficiently and effectively?
*How can we be assured that the funds will go toward the workers and not more and more bureaucracy? (Think healthcare and public schools.)
*What kind of job training are we talking about? *Will we produce products of any kind?
*Is there a national security component here?

For me, private industry would be the way to go for such considerations.

Posted by Judith Ellis at November 23, 2008 12:01 PM

Here is the President-elect's bold initiative:

http://www.youtube.com/watch?v=m17pz0R_qZo

Posted by Judith Ellis at November 23, 2008 12:21 PM

I grew up in the Detroit area and as many in my family worked for one of the Big Three. Back in the early and mid 1970's I saw the UAW as the major problem and even said then that unless the company was allowed to use the latest technology and was able to maximize their employee's skills to reduce costs than nothing else would matter.

I remember seeing a large group sitting and waiting because they couldn't do anything beyond their specific job description. I found it crazy that a maintenance person couldn't do a custodians or janitoral job if needed. Don't get me wrong I support unions, I just think that they have got to understand that if the company goes under so do they.

Posted by Gregg at December 1, 2008 4:15 PM

As an American "raised by a pack of Japanese managers", and working in the US transplant automotive industry for over 20 years as a cross-cultural management consultant, my perspective has a strong Confucian flavor. Interestingly, I find that many Confucian values appeal to Americans as well. Of course the values are hollow if leaders don't walk the talk. The irony is that even though Japan is a hierarchical society, Japanese companies take great pains to offset elitist tendencies that the hierarchy invites, by putting the onus on its leaders to be moral, ethical models of behavior. Proof? Note these key differences in patterns of behavior between Japanese and American managers in the automotive industry:

1) Most American managers began their careers at a desk and many consider production-line work beneath them; Japanese managers in the same industry all started on the production line and for this reason have a high level of empathy toward and respect for the production line worker.

2) American managers do the bulk of their work at a desk; Japanese managers spend more time on the factory floor supporting production and even work on the production line when necessary.

3) American executives are rewarded for achieving cost-cutting targets that almost always involve downsizing; Japanese executives view lay-offs as a failure and loss of face by leadership, and employ it only as a last resort option; when lay-offs are unavoidable, the Japanese president accepts responsibility, and in many instances resigns.

4) Many American managers wear neckties to distinguish themselves from the laborers, have private offices, and park in reserved spaces near the front door; Japanese leaders wear the same uniforms as production-line workers, sit in open offices and fight for the same parking spaces regardless of rank.

5) When a line-worker in a U.S. manufacturer passes a defect to the customer, the American supervisor often employs punitive measures; faced with the same situation, the Japanese supervisor takes responsibility for developing a process that failed, then requests the operator’s cooperation in developing an improved process that prevents repeat of the same error.

To this list we can add that executives of the major Japanese automotive companies don’t fly around in private corporate jets-even when their companies are wildly profitable. Yes, the bigwigs at Toyota and Honda fly commercial like the rest of us. (There may be exceptions, but I’ve never heard of it.)

The common thread here is obvious: American management behavior not only lacks a healthy grounding in humility, it is downright elitist.

Isn’t it ironic? Americans, who profess to cherish equality, battle the same demons of elitism that haunt the Japanese. Japanese elitism happens to have roots in a social hierarchy where individual merit is less important than age and experience; America’s version is an outgrowth of a hyper-competitive meritocracy.

Business leaders in Japan’s best companies acknowledge the threat elitism poses to morale, and have found surprisingly effective ways to counter it. In contrast, American business leaders are in denial (at least publicly). The result? Elitism continues to run rampant at the upper echelons of corporate America.

The Big Three executives have been trying for years to create “lean” cultures in their organizations, but just can’t seem to figure out where they’re falling short. Here’s a hint: how about taking a cue from leaders of Japanese competitors who work hard at staying humble?

If leaders of our domestic automakers could do just one thing to address their dire circumstances, it should be to squash elitism in the ranks. Starting with themselves. The alternative is to continue blatantly disrespecting the most important and valuable assets they have: the hard-working employees who actually create value for the organization.

Call me old fashioned, but what better way to keep leaders humble than by asking them to set an example for the people they are supposed to be leading? Coming from a blue-collar family certainly colors my view of the world. (Dad was a pipefitter.) But I think my personal disdain for elitism also reflects the values of mainstream America. If it didn’t, why would Americans be so outraged about the Big Three fat cats flying to Washington on private jets to ask for OUR tax dollars to bail them out?

Again, it’s not that the Japanese aren’t prone to the same elitist tendencies. But the best Japanese companies have found effective ways to offset these tendencies by demanding of their leaders, practices that keep all employees humble—like requiring all employees to start careers on the factory floor regardless of rank, sharing a common uniform, eating in the same cafeteria, and requiring all employees to fly commercial.

The challenge for corporate America then, is finding culturally compatible strategies that counter these destructive elitist tendencies, and in the process connect their organizations to the power of humility.

These are the kinds of issues I write about in my blog. If the spirit moves you, check it out at:

http://japaninsight.wordpress.com/

"Excellent" blog here, but what else would you expect from TP?

Aloha,

Tim Sullivan

Posted by Tim Sullivan at December 30, 2008 1:54 PM