Why GM, Ford, and Chrysler shouldn’t get a bailout

From the desk of Roy Furr, Wednesday, 3:30 pm

There are three areas a business has to succeed to be healthy in the long term.

1. Managing people.
2. Managing product lines.
3. Marketing/sales/business development.

Managing people means keeping workers happy without letting them control the business decisions. Especially when it could be detrimental to the business. Organized labor has too much control over Detroit’s big three and have developed non-sustainable demands — they are literally choking to death the companies they rely on.

Toyota and Honda have fended off union control so far. (Keeping employees happy goes a long way.) That’s one reason they’re not in the same mess the others are.

If your business is good at managing people, you’ve succeeded at one of the three pillars of business success and are unlikely to need a bailout like Detroit’s big three.

Managing product lines means finding out what flush, hungry mobs want and giving it to them. In this green, energy-conscious world with gas prices spiraling out of control, there’s a new Hummer. Enough said there.

VW won with the ugly, cramped little Beetle when the cars of the 50s and 60s were mostly gas-guzzlers and people were looking for something different. And Honda and Toyota are mostly on target with their high gas mileage, environmentally friendlier cars. Small is big now, and if Detroit is slow to recognize that and react to the market it’s not taxpayer’s responsibility to bail them out for their poor product choices.

When’s the last time you looked at what flush, hungry mobs were asking for, and gave it to them? It’s a valuable thing to do…

Marketing, sales, and business development means taking a product that was created for a specific market, and introducing the market to that product. Then asking for the order. Not a fancy commercial produced to win advertising awards with pop-ish music and fancy graphics.

Sure, it makes you feel good when your ad agency takes you out for a $1,000 steak dinner because they won an award on your dime (and then charges it to your company in a transaction you’ll never see), but is this really growing your business?

How about a few commercials with a reason why I should prefer your product over every other one available in the marketplace, tied with benefits of buying your product and doing business with you, and finally tying in the commercial with something going on at the local dealership right now, such as an event I can go to? It’d be a start in the right direction.

I don’t have much sympathy for failing automakers. I feel sorry for people who feel they have no control, and who may lose their jobs when those companies go under. But we can’t get into the habit of propping up companies who fail on so many levels, just because the company is big. Then nobody learns and the cycle continues.

This entry is filed under Business, Entrepreneurship, Marketing, Sales. You can follow any responses to this entry through the RSS 2.0 feed.You can leave a response, or trackback from your own site.