Tag Archives: Fast track out of this recession

Future Government Aid for the Auto Industry Needs to Focus on Creating Sales, not Cutting Costs and Closing Plants

After emerging from bankruptcy, the American auto industry is no doubt going to need more government help in the form of loans in order to succeed.  If the government truly wants to see the industry get back on its feet, it needs to focus on the revenue stream of these companies—bringing money into these companies through sales of their products.  Instead of putting more money into the hands of incompetent auto executives, the government needs to put this money into the hands of the consumers.  Two friends of mine came up with the following plan to make this happen:

 

            For example, let’s say the federal government decided to allocate an additional $20 Billion in loans to help the auto industry.  Instead of giving the money directly to the auto executives, the government could offer a $10,000  cash back rebate to every consumer who buys a new GM, Chrysler or Ford (Ford should not be penalized for refusing to accept government help) car within six months.  This would create immediate sales of 2,000,000 new cars and give the auto industry the jump start it needs to succeed.  The same amount of revenue would still flow into the auto industry, but they would have to earn it by doing what they’re in the business to do—building and selling cars.  It would also help speed our nation out of this recession.

 

            This program would be easy to monitor, easy to implement, provide instant results and it would create an instant cash flow for the industry.  The details of this program are listed below:

 

            Implementation

  • One cash back rebate per tax payer with a valid social security number.
  • Must purchase (or order) a new car within six months, free to choose between General Motors, Ford, and Chrysler.
  • An application for the rebate is made to the federal government after the purchase with proof of purchase, copy of registration, and basic documentation proving residency and tax-paying status.
  • Rebate check would be direct deposited within two weeks into designated checking/savings account.
  • The rebate of $10,000 could be used for ANY purpose including paying down the car loan, buy another car (even an import), buying Christmas presents, paying down bills, or paying down an upside down mortgage. Anything at all.

Results

  • Creates competition between General Motors, Ford, and Chrysler to offer even deeper deals
  • Ordinary citizens would benefit directly.  Consumers who decided to participate would also feel a sense of patriotism for helping out one of our most American of industries.
  • The incentive would be to buy smaller cars… it buys more of a car, but they are free to buy any size car they want.
  • The cash rebate would help fuel our economic recovery by also allowing this capital to move directly into our economy.
  • Fraud should be easily monitored. 


This would give the auto industry the shot in the arm that it so desperately needs and would provide a much needed jolt for our economy.  What’s there not to get here?

 

Why Not Take The Fast Track Out Of This Recession?

Right now there’s not a lot of excitement in America, and rightfully so, because there’s not a whole lot to get excited about—the economy is awful, people are still losing their jobs and homes continue to be foreclosed.  Everyone would like to see this recession end sooner than later, but all indications are that it will end later—much later.  When you think about it, this whole scenario is pretty depressing.

 

            This begs the question: is there anything that can be done to speed this process up so that we can begin to see light at the end of the tunnel?  The answer is yes and it’s really quite simple, but the executives running American businesses must abandon their century old practice of top-down management and replace it with company-wide collaboration.  The assumption behind top-down management is that the people at the top possess all the necessary knowledge to make decisions that are in the best interest of the business.  That assumption is no longer true.  It’s the employees on the front line—the people who do the work that the company gets paid for—who possess that knowledge.  They’re the ones who understand how the business works and they know what needs to be done to fix things.  So, why not take advantage of this wealth of knowledge. 

 

            For example, let’s take a look at a story that was reported in the New York Times on May 21.  According to the article, the economic downturn really hit the engine manufacturing business of SRC Holdings this past November to where the plant was faced with a six month gap in orders.  As Jack Stack, the chief executive of SRC put it, “the entire plant collaborated on how to schedule their workloads—they basically had to take eight hours out of their work week to save money until we could bet back on a full schedule.  Because everyone knew the numbers, they scrambled to find new products and clients…to fill the gap faster.  The result was that we lost money in December and January but we were back to full employment in February.  And we didn’t do this through the old command-and-control method (top-down management); everybody knew the gravity of the situation, and all the great ideas came from within.”  This is what company-wide collaboration can do for any company if senior management will just allow it to happen.

 

            If a company wants to jump onto the fast track to recovery like SRC Holdings, all its senior management needs to do are the following three things sincerely, consistently and well:

 

  • Ask the rest of the employees for their help.  Let them know that everyone is in this together and that they hold the key to getting the company on the fast track out of the doldrums.
  • Listen to their ideas.  These are the people who understand the nuts and bolts of the business.  They know what’s wrong and they know how to fix it.
  • Empower them to take action.  Give them the backing and support they need to put their ideas into action.

          If more businesses in America would abandon their top-down approach to managing and adopt this collaborative approach which is used by not only SRC, but  also by companies like Harley-Davidson, Southwest Airlines and Toyota, it would bring a sense of optimism, excitement and hope back to America and we truly would be on the fast track out of this recession.  For more details on how to make this happen, check out my latest book, Instant Turnaround!

 

 

Have American Business Executives Lost Their Compass?

          Far too many American business executives are using the state of the economy as an excuse for doing nothing to get us out of this recession.  They’re sitting back and waiting for something to happen rather than taking the initiative to make something happen—they’re waiting for the economy to get better, for economic stimulus money to be doled out, for credit to loosen up and for the federal government to do something. While they’re waiting, they’re hunkering down, tightening their belts, laying people off and looking for additional ways to cut costs.  The problem is that these are the very actions that will prolong the current recession rather than shortening it.

 

            There’s something grossly wrong with this picture.  This is not the business mindset that has made America the great country that it is.  It’s as if American business executives have lost their compass.  Now is the time when they should be demonstrating their leadership by putting American businesses on the fast track out of this recession.  They can do this by focusing their attention on the one resource available to their businesses whose behavior they can influence—their employees—the people who do the work that their companies get paid for.  The better these people are treated, the harder they’ll work and the harder they work, the quicker the company’s revenue stream begins to grow and that’s what the fast track out of this recession is all about.

 

            In our new book, Instant Turnaround! Harry Paul and I provide a detailed program for making this happen.  The beauty of this program is that anyone who chooses to implement it won’t have to wait a month, six weeks or a year to see results; things will start turning around on the very first day.  What’s more, this program is easy to execute, there’s absolutely no risk, it costs nothing it drives productivity and revenue through the roof and everybody wins.  Those executives who choose to implement this program will immediately put their companies on the fast track out of this recession and look like heroes.  Those who don’t will soon be wondering why they’re the only ones still in a slump.