The Bailout of the Auto Industry Should Focus on Creating Sales, not Cutting Jobs and Closing Plants

I see where GM and Chrysler are seeking an additional $21.6 billion in loans from the federal government.  In return, GM is cutting 47,000 jobs and closing 14 plants while Chrysler is cutting an additional 3,000 on top of the 32,000 they’ve cut since 2007.  Something is wrong with this picture–I thought the government’s bailout of the US auto industry was supposed to save jobs, not destroy them.   It seems like the only things auto executives know how to do is cut costs, cut jobs and close plants.  If the government truly wants to save the American auto industry, it needs to focus on the revenue stream–bringing money into these companies through sales of their products.  Instead of putting this $21.6 billion into the hands of incompetent auto executives, the federal government should put all of it into the hands of consumers.   For example, it could give each American household a $10,000 voucher that’s good only for the purchase of  a new car from any GM, Ford or Chrysler dealer.  This would create immediate sales of 2,160,000 new automobiles and give the auto industry the shot in the arm it needs.  The same amount of revenue would still flow into the US auto companies, but they would have to earn it by doing what they’re in business to do–building and selling cars.

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About Ross Reck

Who am I? I am the author of The Engagement Formula, Turning Your Customers into Your Sales Force, The X-Factor and my popular weekly newsletter: Ross Reck’s Weekly Reminder. I'm also the coauthor of Instant Turnaround!, REVVED! and the best selling The Win-Win Negotiator. I've also spoken at hundreds of meetings, conferences and conventions throughout the United States, Canada, Latin America, Europe and Asia. My consulting clients include Hewlett-Packard, John Deere, American Express, Janssen-Ortho, Inc., Shire Pharmaceuticals, Philip Morris International, the Chicago Cubs, Rolls-Royce and Xerox. I received my Ph.D. from Michigan State University in 1977. From 1975 to 1985 I served a Professor of Management at Arizona State University. During my career at ASU I was the only two-time recipient of the prestigious “Teaching Excellence in Continuing Education” award and was identified by the university as an “Outstanding Teacher.” In 1985 I left my position at ASU to search full-time for a new "Management Model" to replace the current model with it's emphasis on authority, control and formal communication channels. Last February, I found it (it's actually a leadership model) and it's featured in my new book, The Engagement Formula: Three Simple Steps that Guarantee Full Employee Engagement.

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