The title and the sports-bias prevalent in Yes MSG would lead you to believe that I am to speak about:
1) Plaxico Burress — he of the bling-showing, sweatpants-wearing, Glock-carrying fame. Or
2) PacMan Jones — who is lucky that Commish Goodell did not think that a drunken fight with your bodyguard warranted season-long suspension. Or
3) Stephon Marbury — self-proclaimed best point guard in the NBA despite never having won a playoff series in a 12 year career (but did earn $120M give or take)
But no; to some extent, we expect that type of behavior from our athletes. After all, these guys most likely have always been popular, the most athletically gifted kids in the class, and have been enabled by those around them. Which, instead, brings me to the perfecta of execs, who, if you presumably substitute “intellectually-gifted” for “athletically-gifted,” you end up with the 3 following beggars and their bogeyman:
Let me introduce:
- GM’s Rick (Off the) Wagoner
- Ford’s Alan (Mulligan) Mullaly
- Chrysler’s Bob Nards-delli
- UAW’s Ron Butterfinger (ok, Gettelfinger, but he should have changed his name as Gettelfinger is horrible)
These four and a bunch of others, have conspired to destroy billions in shareholder value, as well as burden the US-HQ’d auto industry with a cost disadvantage of approximately $2,000 per vehicle. Considering the history of the Big Three, I am not certain I want to pay, say, 5% more just for it to be American-made. And while we are on the topic of ‘buying American” consider if you will that Honda, Toyota, Mercedes and BMW all manufacture quality, elegant, desirable automobiles in the USA. The issue is not the factory worker, it’s the bozo leadership.
Toyota and Nissan also survive (unlike Mercedes and BMW) on mass market automobiles, and last I checked they had not asked the governments of interest — Japan and France (Nissan owns Renault) for handouts, and we know the French love to give money to crap companies. Come to think of it, maybe the Big 3 should all claim they are farming companies and Sarkozy will send some Euros their way.
Yet, while GM and others have lost 90+% of their value, Off the Wagoner has reportedly earned $100+M since 2000. What kind of bonus package was that? It is like giving A-Rod more millions for hitting above 0.150. Mulligan, as that is what he should take on his Ford leadership, got like $20M last year. And Nards, former GE protege of Jack, was once paid $200M to leave Home Depot. How the heck he got another job is beyond me, unless you adhere to the Major League Baseball history of just hiring the nearest White Guy Retread (OK, worked with Charlie Manuel, but not so many others).
Now let’s add in Butterfinger, which pains me as it is my favorite Candy Bar, who has to have earned millions as head of something as large as the UAW. One could probably consider him the second most powerful union boss in the world perhaps, right behind Lula Inacio da Silva, who parlayed a similar job into the Presidency of Brazil. Now I know that the Union boss’s job is to negotiate the best package possible for his members, but part of the equation should be the actual survival of the industry you are in. $60 per hour and healthcare is not worth quite as much if the company fails. D’Oh.
So where does this leave us? Well, these 4-in-a-box toolset, who all recently got $25B to assist with building fuel efficient vehicles, and who have already asked for extensions to meet the standards, are now asking for $34B. The funny thing is that they came to DC two weeks ago asking for $25B. However, having flown in three corporate jets, yet with no business plan, they are returning this week in hybrid cars and with business plans in presumably target recyclable carrying cases, but asking for an additional $9B. How does that work?
(Speaking of corporate jets, here is a quick note – I am writing this in Coach on Continental Airlines at 35,000 feet where they are now playing the Mary Tyler Moore show. Huh? Low royalties? This show was on before most passengers were born. And to compound matters, the woman next to me, who reeks of cigarette smoke and feels very ill, is asking for Sprite and Apple Juice, and just SPIKED her soda with Vodka — Good Times! Where is my corporate jet?)
These Bozos went back to Dearborn, actually did a biz plan, and said, “wait, we don’t need $25B, that was just back of envelope. Now that we are using Excel, we need $34B.” Regardless, they now have a business plan, but this brings to mind another few concerns:
- Yes MSG is a great fan of “Recovery Plans.” Effectively, what you are saying is that there are all these things we can do to be successful, and we were going to do NONE OF THEM. However, now that times are tough and expectations are not being met, like company survival, here are all the cool things we can do. Should the Big Three and Mr. Candy Bar have thought of this before?
- Yes MSG is also a fan of accuracy, not precision. I am sure that the Business Plan is very precise, right down to the day and dollar when Detroit returns to the black. However, the accuracy of that number and date might as well have been provided by a monkey with a calculator and a calendar. Perhaps it was. I have some faith that the cost items could be achieved, however, the $34B question is why should I believe that after three decades of the K-car, the Mercury Marquis and anything Oldsmobile, that these guys will design anything that ANYONE WANTS TO BUY? The revenue line gives me pause, and while precise, I am equally certain, totally inaccurate.
- Yes MSG is also a fan of fables, and this seems to be “Boys who Cried Wolf.” These three have been bleeding market share for decades, with no discernible urgency. Yet now I am supposed to believe that the economic crisis, which started in September, is why they are on the verge of bankruptcy. Save me the “perfect storm” argument. Sure, sales will be way down in Q4, which has not even ended, but that is the fine line between survival and failure? If these businesses are so susceptible to a single down quarter, then I think I can find another place to spend $34B
- Yes MSG is also a fan of expertise. I already have questioned the expertise of these execs, who have failed during their tenures, doing a business plan for companies that have 30 years of poor performance, but lovely executive dining rooms I hear; but to compound matters, these plans are going to be evaluated by Barney Frank? Christopher Dodd? Members of Congress? People whose expertise is at best law, and at worst, a$$-kissing.
Shouldn’t these plans be evaluated by seasoned professionals? I don’t know, hmmm, perhaps people from the business community who have a specialty in evaluating business plans? Maybe a combination of Private Equity firms, Venture Capitalists and Business School professors? Heck, I would even be satisfied with my local 7-11 franchisee, who knows profit and loss, and gets NO bailout when the local construction crew’s site is closed down and they stop buying taquitos at 7am. Or even outsource it to India, like everything else, as there is absolutely no shortage of brilliant MBAs there who would evaluate the plans objectively.
Now my loyal reader P-Dub has reminded me that Chrysler is already owned by a Private Equity firm, Cerberus Capital (cannot check as in the air). So perhaps we should say an elite Private Equity firm, like KKR or Thomas H Lee. For VC, Kleiner or Sequoia; not one of the valley one hit wonders. Of course, the realization that Chrysler is owned by a Private Equity firm leads me to the following recommendation:
1) Chrysler: as a prize for needing government intervention twice in a generation, and for having been bought by, supposedly, shrewd investors, you get to go bankrupt. No reason my tax dollars should give Nards or Cerberus ANY of my money. Plus, everyone says that bankruptcy would be the death knell for the company. Hey, I am a trained scientist, we have three candidates, let’s find out.
2) Ford: since you are the solvent one for the time being, you get your line of credit. Personally, I would like you to go out of business just so that you have to sell the Detroit Lions and put us out of our Thanksgiving Day game misery, but that would be unfair, maybe.
3) GM: not sure what to do here. Maybe you get the funds, to complete the trifecta — one failure, one line of credit to be accessed if needed, and one investment. Seems fair.
Actually, I would prefer to force a merger of the three or a takeover by Nissan or Toyota, but that would be more challenging.
Now I know what you are all thinking? What about the workers? You, Yes MSG, admitted they are just as productive as their Asian-employed counterparts. Perhaps, since we just saved BILLIONS by letting Chrysler go under and not investing (yet) in Ford, we use the excess monies to retrain workers. That would be more effective and would help the little guy, not the boardroom. My own back of the envelope calculation says that we could have $5-10,000 per worker. That, my friends, is a lot or schooling.
Cool — 2 hour flight from Houston (George Bush Intercontinental Airport, which should be renamed George Herbert Walker Bush Intercontinental, just to avoid, you know, confusion) to Fort Lauderdale and Yes MSG, with a great assist from P-Dub and my Midwest correspondent, Jad-wurst, have solved the auto crisis.
Someone forward this to W and Obama.
