The Auto Bailout by SaltCay Enterprises Inc.

As I think about the all the bailouts that have happened this year I began to wonder why AIG and not Lehman Brothers? Why were the banks rescued but not the borrowers? Why the car companies but not the consumers? Why do executives get bonuses for poor performance and workers get layoffs? Since when is it the fault of "labor" when a companies performance fails and not management? When did this become generally accepted thinking?
I'm not saying that any one class of stakeholder should be immune from taking responsibility. I just noticed that the plan makers (management) are rewarded for a failed plan and the plan executors (labor) are punished.
This article is about the auto industry. It seems that management sees fit to close production plants to save money. Even though real cost cutting and the return to profitability will come from consolidation, convergence and building a product the world wants to buy. That's right! I said the world. We are competing in a world economy and USA made goods can be sold all over the world. So it would logically seem that management needs to stop putting a huge burden on their respective company(s) by taking these ridiculous compensation packages. I say ridiculous because there is no right of ownership from these top managers and CEO's. They didn't build the company; they just had the privilege of attending the right schools, subsequently make the right contacts and the luck of becoming a highly paid custodian. In reality a huge compensation package levies a burden on the company’s bottom line; much in the same way building a product with a low market appeal impacts the bottom line.
The model used by foreign car makers was developed by an American and exported to Japan. The Japanese’s manufactures retooled the idea of Total Quality Management to fit their culture. The model was ignored by American Management because the culture here is greed and a lack of ownership. The quick buck culture makes for bad business practices. Practices that are short sighted and do not build a brand recognized by worldwide consumers. This is management’s responsibility and now its subsequent failure. Come on; if the George W. Bush administration can figure it out and demand reform from the Auto makers, the deficiencies are blatant and glaring.

Don't be fooled, it has always been the responsibility of management to steer the proverbial ship. Management’s responsibility is; to provide the plan, develop the product line, engage the development of the product, engage supply, gauge the demand, plan the marketing, bring it to production, review the output, make corrections, review the demand, etc. I probably forgot a few key elements but you get the idea. Essentially it's management’s duty to provide the tools necessary to get the job done! It seems like a lot but don't forget this is why they get paid the ginormous buck! I see no downside to being in management because you get a Teflon suit and golden parachute. Labor gets a trickle down effect and all the demoralization the top can heap on them. The real owners being the stockholders get a loss and excuses. Great model! How long can this continue?

Labors responsibilities; Execute the plan, provide the product for market, report production successes and failures, retool the proletariat's’ skills in order to remain productive, overcome light design flaws(not redesign) etc. And you get the idea. Essentially it's labors job to “get the job done”.
Now that we have arrived in the 21st century, labor needs to rethink how they fit into the stakeholder paradigm. Labor needs to rethink its priorities and get more involved in the ownership of a company. Maybe the answer is to get a voting majority of common stock and force the Board of Directors to rethink its position when hiring a fat cat. Would someone please tell me how many people would be put to work for the cost of one unproductive CEO? Remember the burden I talked about above. The Board of directors in all publicly traded companies have an obligation to address this issue before Washington imposes their will upon the free market system.
Labor has three key elements to deal with; Retirement, current wages/benefits and job security. The American auto worker (and much to the detriment of its reputation) has done a decent job. They now suffer the backlash of their own success. Make no mistake labor has to address the issues or the politicians will make these choices for them. Probably the last thing anyone needs.
The third and most overlooked stakeholder are the common stock holders. They are the so called owners of the companies in which they invest. Shareholders have become a joke. They seldom hold on to a companies stock for more than an hour. Who is going to listen to them? Shareholders, management and labor must cooperate to a common goal. Somehow the thought seems like a foreign concept now and a quaint unattainable idea. How would you otherwise correct the deficiencies unless you solicit cooperation from all stakeholders? I admit it; I have just as many questions, as I have comments.
I know this; in order to "get it right" sometimes you need to ask the right questions.

to download and print this artical: click here