It is a shame that a few CEO's (quite a few actually) ruin the image of all others. There are a lot of CEO's that took risk, founded companies and built them up. These CEO's not only took huge risks but very often "bet the farm" in terms of investing in their own startups. These CEO's hire the most people in the world as most companies (90%) have 500 or less employees. These CEO's should be able to reap the fruits of their labor.
The problem is CEO's who get hired to run large companies that drive them to the ground, they never felt the pressure of starting from scratch and they get compensated through the roof even when their respective companies loose billions - that's wrong. This coupled with a very corrupt political system is the root of the evil.
We cannot survive without entrepreneurs and we certainly need a system that motivates them. That said, stockholders control the BOD and the BOD controls the CEO. In my house I sweep the stairs from the top while these guys sweep the stairs in the middle and at the bottom so the dirt stays on top and eventually gets dragged down again.
If you run a company to the ground and there's no private equity available then do not come and take money out of my pocket (tax-payer pocket), if my company fails I will not ask for a bailout from the public at large. If the GM stock tumbles that means there are more sellers than buyers, why should I then be forced to buy this stock by the folks on the hill?
We need a serious cleanup that inspires entrepreneurs while still keeps government at a minimum and taxes low - now our taxes are being used to bail out failed companies.
To Lee Iaccoca: yes, change the coach/quarterback when your team is losing, what in the world makes you think they can turn it around after having failed so miserably.
Friday, December 12, 2008
Friday, December 5, 2008
The Detroit Solution - give the cars away
Traditionally run companies such as GM, Ford and Chrysler need to "think outside the box" to survive in the future. A lesson can be learned from the internet where for example newspapers deliver the content for free to the "subscriber" but making the revenue up in banner ads.
The Detroit Solution:
Step 1: Let people lease cars priced at $30,000 or less for $0.00 per month for 3 years.
Revenue ideas: a. Wrap the cars in advertising from 3rd parties be it national brands or local advertisers. b. All cars should have GPS installed and then sell auto-ads to retailers so that the ad is displayed on the nav system and heard over the speakers when you approach a participating (and paying) retailer. For example: as you approach McDonald's an ad for McD is displayed on the Nav system and over the speakers you hear: 2nd right up ahead, get your $2.50 happy meal. I'm sure there are many other revenue avenues but all we need to make is about $400.00 per month for a $30K car.
Step 2: After 3 years the car comes back to the manufacturer who now leases it out as used for 3 new years at $0.00 and includes gas for the 3 years for 10K miles per year. The revenue stream will come from the same sources as those for the brand new cars.
Think people would lease cars for $0.00 per month? Think that would clear the lots? Think the dealers can be set up to do the wrapping etc? Think you could have local advertisers BID on ads each month (and of course the advertisers pay the wrapping cost to the dealer that does the work)?
Too simple? I think not. The companies that will survive in the uncertain economic times will be the companies that think way outside the box and if customers get products for free I believe they will all "sell" AND people will accept the ads/GPS.
Now, as these cars blow out the doors and Detroit turns into advertising-driven revenue companies they can use this to make BETTER cars.
Why should we bail out the non-inventive? Why can't these very highly paid executives think outside the box?
I am willing to bet that the first company to put such a plan into action will sell all inventory almost overnight!
Comments always welcome.
The Detroit Solution:
Step 1: Let people lease cars priced at $30,000 or less for $0.00 per month for 3 years.
Revenue ideas: a. Wrap the cars in advertising from 3rd parties be it national brands or local advertisers. b. All cars should have GPS installed and then sell auto-ads to retailers so that the ad is displayed on the nav system and heard over the speakers when you approach a participating (and paying) retailer. For example: as you approach McDonald's an ad for McD is displayed on the Nav system and over the speakers you hear: 2nd right up ahead, get your $2.50 happy meal. I'm sure there are many other revenue avenues but all we need to make is about $400.00 per month for a $30K car.
Step 2: After 3 years the car comes back to the manufacturer who now leases it out as used for 3 new years at $0.00 and includes gas for the 3 years for 10K miles per year. The revenue stream will come from the same sources as those for the brand new cars.
Think people would lease cars for $0.00 per month? Think that would clear the lots? Think the dealers can be set up to do the wrapping etc? Think you could have local advertisers BID on ads each month (and of course the advertisers pay the wrapping cost to the dealer that does the work)?
Too simple? I think not. The companies that will survive in the uncertain economic times will be the companies that think way outside the box and if customers get products for free I believe they will all "sell" AND people will accept the ads/GPS.
Now, as these cars blow out the doors and Detroit turns into advertising-driven revenue companies they can use this to make BETTER cars.
Why should we bail out the non-inventive? Why can't these very highly paid executives think outside the box?
I am willing to bet that the first company to put such a plan into action will sell all inventory almost overnight!
Comments always welcome.
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