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Showing posts from November, 2008

So why not Chapter 11?

I agree with my good and respected friend, Don, who kindly left a comment. We need to accelerate the pace of de-consolidation or break-up of the parts of the Big 3 Automakers. How fast we can move is limited by socio-political structures. The key here is the UAW. Either they exist in a radically modified sense or they may not exist at all. Clearly the import manufacturers in the USA are not unionized, and they are much better off. I believe politics (especially for the Democrats) will necessitate that the UAW must exist, but with concessions and modifications. Hence, I think we evolve to Don's vision of a new approach to auto manufacturing through either Chapter 11, or a government guaranteed loan program with concessions.

Why do I favor a 1979-type of approach? The answer is two-fold:

Chapter 11 will kill consumer demand. I was riding in a cab in San Franciso, and the driver, an African immigrant, said, "Hey, I'll ride in a plane of a company in bandruptcy, but I …

Big Three Rescue Part 2 -- Let's learn from Chrysler 1979

I am hopeful that my proposal for government-guaranteed loans and credit lines for the Big Three, in exchange for the meaningful structural changes, will soon become reality.

Without knowing it, I was in some ways recounting what happened under President Jimmy Carter in 1979 with Chrysler. Check out this wonderful article from Time Magazine’s archives:

http://www.time.com/time/magazine/article/0,9171,947356-1,00.html

To summarize,
The government guaranteed loans to Chrysler totaling up to $1.5 billionChrysler had to secure another $1.43 billion in private financing at reduced rates from banksChrysler had to gain concessions from suppliers on cost and financingChrysler committed to $462.5 million in concessions from the company’s union employees, plus another $125 million from salaried workers. Chrysler shed unattractive assets (wholly owned parts and components factories), cut the workforce.The US government also extended the deadline by two years for Chrysler to meet C.A.F.E. requirement…

Everybody wants to know what I think about the Big 3!

Well, because I spent 17 years in the auto industry, I am getting a great number of inquiries about "what should we do with the Big 3?"

What I share here are my own opinions. I do not suffer from naivete about how hard this will be. But I do wish for a sustainable resolution, and not just another short-term fix, which inevitably leads to more pain and hardship in the near future.

Here are my thoughts for beginning to truly address the Big 3 issues. I believe that there should be no "free lunch." I do not support a "no strings attached" plan for the Big 3. They need support and encouragement to make the changes they have discussed for decades.

If our government supports the domestic-owned industry with loans or grants, then in exchange, it must seek to create a viable business for employees, and a return for investors. The only way to guarantee employment is to create an ongoing and viable business model that can compete and win. To survive, and in the future…

Another Trend -- Nostaglia

What do Glen Campbell, Seal and James Taylor have in common? They have all put out cover albums in the past month. Is it co-incidence? Maybe, but mark my words, as the economy continues to suffer, people are going to be going for nostalgia. We will see it in music, in movies and TV shows. We will see it in fashion. People will want to reflect and reminisce about the past as they struggle in the present.

My thoughts for Our President, Barack Obama

While I have posted on what I think the country must do to succeed (see below..."8 points"), I would like to continue with a humble open letter to our President, who is facing a very difficult environment. But he is the leader who can indeed make the right things happen for all of us.

So what should President Obama do? Perhaps two recent articles provide a little guidance. The first was in Businessweek by Michael Porter:

http://www.businessweek.com/magazine/content/08_45/b4107038217112.htm

In it, he outlines what has made America successful. The second piece appeared in the Wall Street Journal. It is an editorial by Henry Olsen published yesterday called "What would Reagan do?" In it, the key theme was "focus on freedom."

httphttp://online.wsj.com/article/SB122637470965416637.html://

Both Porter and Olsen have as a foundational element this theme of freedom. Let's reflect and explore upon where our great nation must go to continue to be great. What makes u…

Why I love the Lex Column

For the past 20 years, I have told anyone who will indulge me, that if they could only read one thing each day, that one thing should be the Lex Column in the Financial Times of London.

Why do I love the Lex?
It uses case studies to teach
It is not afraid to use an advanced technical and financial lexicon.
It makes me feel smart
It has a sense of humor
Let's look at each in turn. First it goes without saying that case studies, when done well, are very effective tools of instruction. Granted, Lex keeps the words to a minimum, but everything that is written is tied to a company, industry or goverment. The Lex column rarely invokes theory without a specific example. While it is true that the majority of comments are negative, I would argue that Lex uses the concept of criticism in its true Latin intent; "kritikos" means "able to make judgments." Yes, the English use tends to have an overtone of "faultfinder," but Lex always discusses what SHOULD be done. It is…

Evidence that Social Publishing is Next

Check out a very enlightening article on Financial Times online:

http://http://www.ft.com/cms/s/0/ee324904-a940-11dd-a19a-000077b07658.html?nclick_check=1

The quick summary is that young people -- 11 to 29 -- are using technology, both at work and at school, in very unique ways versus their older brothers and sisters, let alone parents.

Employers are finding, according to an Accenture Survey, that younger workers are not using email systems. They are relying upon social networks, instant messaging and blogs.

What is next? Check out my entries below on Social Publishing. I predict that universities and businesses will increasingly use WIKI platforms for communication and collaboration. Here we go!

What the 2008 Election Means to Me

I remember seeing Barack Obama speak at the 2004 Democratic National Convention. I was impressed. I also recall seeing him again in 2006, and can proudly say that on my birthday, professed a belief that he would be a bonafide candidate for the U.S. Presidency. My brother did not agree with me, and I respect his opinion as a teacher of civics, political science and history. As it turns out, I was right.

For the past eight years, I have been very disappointed in George W. Bush. I thought he would be a consensus builder, maybe even a healer, after the eight years of bickering during the Clinton Administration. I must admit that I was very bothered by the scandals (Monica, Jennifer, etc.) because I believe in the honor of the Presidency and that beyond what any single administration can do, it must represent the ideals of our society. I was also bothered, however, by the viciousness of the politics during Clinton's two terms. I have to believe in hindsight that this was caused by the z…

Will the Semantic Web be Next? Will it be Web 3.0?

Web 3.0 – hither and yon

Let’s turn our attention to what is next for the World Wide Web. It would appear that most commentators are focused upon something called “The Semantic Web.” The goal of Semantic Web is to enable automatic machine generation and processing of content. Semantic Web demands rich machine recognizable semantics in web pages so that machines can understand web content. The aim of the Semantic Web is to build a world of intelligent and inter-communicable web pages. In plain language, to achieve this objective everyone and everything on the Web needs to use the same approach to content. People understand statements because of syntax rules. For the Semantic Web to work, then there will need to be a common syntax that computers will all understand. The syntax of any language defines the rules for building the language statements. The work towards a Semantic Web is trying to describe all things in a way that computer applications can understand. This is where the controv…

The Cutting edge of the Web: Social Publishing

As we know, the Internet has evolved from a crude communication tool to its current role as the backbone for global information publishing and acquisition, communication and commercial transactions. When we quickly review the changing World Wide Web, we see that we started with static web pages. They were basically brochures online. We have see from there several interesting developments in communication on the web, moving well beyond emails and instant messaging. These all fall into the category of publishing, and represent the democratization of information, and the formation of community.

The first trend in publishing to consider is “Micro-blogging” (the most famous of which is Twitter). This content is highly perishable, and only relevant in fleeting moments in time. People literally share their moment by moment experiences; their reactions to events and the actions of others. It is social small talk with a wide range of subjects. This type of information and its frequent updates i…