Tuesday, November 25, 2008

Tuesday, November 18, 2008

Chairman Fights for G.M.’s Future and His Reputation - NYTimes.com:

"The lanky, 6-foot-4-inch Mr. Wagoner, a 55-year-old former Duke University basketball player and Harvard Business School graduate, has refused to consider resigning even if it would help G.M.’s chances of getting emergency aid.

G.M. has declined to make Mr. Wagoner available for interviews. In a Nov. 10 interview with the trade journal Automotive News, however, he said that a change in management at G.M. would not be wise at such a crucial time for the company. “I don’t think it’d be a very smart move,” he said. “I think our job is to make sure we have the best management team to run G.M. It’s not clear to me what purpose would be served.”

A spokesman for G.M., Tony Cervone, said Monday that the G.M. board remains supportive of Mr. Wagoner, who became G.M. chief in 2000 and added the chairman’s title three years later. Mr. Wagoner was paid about $24 million a year in 2006 and 2007 from a combination of salary, stock option grants and other forms of compensation. His 2008 base salary is $2.2 million."

Well that explains GM's problems .... Duke, $24 Million/year, bull-headedness, but most importantly Duke.
Dealbook - A Bridge Loan? U.S. Should Guide G.M. in a Chapter 11 - NYTimes.com

What about Ford? I agree with everything Sorkin writes.
Clout Has Plunged for Automakers and Union, Too - NYTimes.com

Detroit has not made a good case for a bailout. One of America's pillars is that we reward and glorify winners. Detoit auto companies are losing badly. There seems to be a lack of urgency. If they are serious about it, they need to cut their limos and salaries ($1/year anyone). There also needs to be a serious rehauling of the management. It seems like the bailout would be rewarding failure and we don't like to do that.

One other thing is that their argument of Wall Street's Crisis coming to Main Street is totally bogus. It's not like the Detroit automakers turned a corner recently. This has been going on for decades. Union contracts, selling profitable assets, executive perks and compensation, mediocre cars, quality isssues: have all led to the decline of the U.S. Auto industry. And how have they adjusted? Still selling cars that no one wants to buy (quality, styling, fuel economy), still have terrible contracts (although the last contract has some serious cost benefits for mangement), Executive perks and pay way out of line for the performance (Rick Wagoner's long tenure and salary at GM as it disintegrates is unexplainable).

Do we want to fix these things? How do we fix these things? Chapter 11 is the best solution. If not that then a modified "bankruptcy" where the same things happen under Chapter 11, but you don't call it that. If we do everything: Ditch management, renegotiate with the unions and creditors, get rid of brands and dealerships, there's still a good chance that at least one of the Big three will be gone. Not to say that the brands won't be around, but they will not be viable "American" companies.

This is not a bad thing. It's unsustainable to sell 16 million cars a year in the foreseeable future. It's unsustainable to have so many brands for cars that no one wants. It's unsustainable to have so many more dealerships relative to marketshare. This is going to be painful. Michigan and Ohio are going to take it on the chin and hurt for years. However, this creative destruction needs to happen. If the government wants to bailout folks, why not hand over checks to every
American. Or bailout the workers with a safety net (unemployment benefits, training, education). It is in that next new thing that we must have faith in and beleive that will make things better.

Monday, November 17, 2008

Bill Clinton's Global Reach Would Have Pluses and Minuses for a Secretary of State Hillary Clinton

I'm curious to know why they think Hillary would be a good Secretary of State? Wouldn't she be better at DoJ? She doesn't seem to bring much to the table Diplomacy wise and then also seems to have a lot of other problems starting with her husband. Also in Chicago last week was John Kerry who has also been mentioned in the Secretary of State running. If I were advising Obama, I'd reward Sen. Lugar. Even though he's on the other side of the aisle, he has been good to Obama. Also he's got some experience, connections, and would be more of a straight shooter.

Wednesday, November 05, 2008

And Now He's Dead: Michael Crichton, 1942-2008

Wow. I didn't know he was even sick. I always found his books to be well researched and smart. I admired his skepticism and rigorous thought, while not always agreeing with his conclusions.
Obama Makes History - washingtonpost.com

Woo hoo! I'm very happy about yesterday's results. The fact that the Bush years are fast drawing to a close and Obama is starting anew is great news for us. The Senate is good, but did not come as strong as expected. Although I'm not sure what happens if Stevens (R-AK) wins. I beleive that he will be expelled and replaced by someone of Palin's choosing?

Anyways, this is great stuff. I want to warn folks that the victory is not all Obama's. He ran a as flawless a campaign as anyone has. He also had a best tailwind since Nixon's pardon: with Bush's unpopularity, 8 years of GOP mismanagemet, and a cratering economy. If the economy had not had its slow motion collapse, Obama would have had a much tougher road. That being said, I beleive he would have won anyways only it would have been much a much later night. My point is take the victory as a mandate for change, not Democratic strong arm tactics. Obama's temperment will make him succesful and that's good for everyone.

BTW, Oh crap! Now he's got to clean up the mess Bush and the GOP has made. He's got to figure out Iraq, Afghanistan, the economy, credit crisis, global warming, etc. Good luck and God bless!