outsized ideas

Should top posts at tech companies have term limits?

Posted by Alex on January 16, 2009

The president has term limits.  Even though it did not become a law until after FDR’s 3rd term, the founding fathers believed a little revolution – some new ideas – were a good thing.  Especially in the top spot.  Congress was wise to enact term limits. 

 

And yet CEOs and Senior VPs stick around for years and decades.   Often running Internet and tech businesses under the same logic and principles they believed in 10, 15 years ago.   But the world changes fast, especially in tech-oriented businesses.  And what got you phenomenal growth in 1996 may well “work” now, but not as well as a fresh batch of ideas.

 

So why are there no term limits for the top brass?  

 

For the same reason that the President has term limits but Congress doesn’t: they’re making all the rules.

Posted in Uncategorized | Leave a Comment »

Cronyism

Posted by Alex on December 30, 2008

Skip O’Neil points to something I missed:

Two people closely tied to Bush and his family are closely tied to Cerberus, the private equity firm that owns Chrysler, among many businesses, and boasts over $100B in annual revenues on their own site.  

The two people in question are former Bush Treasury Secretary John Snow, current serving as Chairman of Cerberus Capital Management, and former Vice President Dan Quayle, who also(?) serves as a Chairman (perhaps of a division of the company?). 

Before I just thought it was a bad idea motivated by politics and populism.  Not it’s starting to look fishy.

If it looks like a Duck, and quacks like a Duck..

Posted in Auto Bailout, Economy | Leave a Comment »

A picture is worth a thousand words

Posted by Alex on December 30, 2008

…or at least 2 blog posts.   Pulitzer-prize winning cartoonist Michael Ramirez neatly sums it all up (care of Slate.com)

 

Michael Ramirez cartoon - economy and auto bailout

Posted in Auto Bailout, Economy | Leave a Comment »

5 reasons the Auto Bailout will fail

Posted by Alex on December 29, 2008

1. Reorgs don’t work (especially this late in the game)

Just think about big strategic re-organizations you’ve been through.  The same people are still running the show at the very top.  The top brass’ favorites – the ones who’ve been in the trenches with them in the past and they can trust – get more responsibility or move to take over the troubled areas.  Undoubtedly, these will be folks who weren’t able to curtail these problems in the first place and have been entrenched in the bureaucracy for way too long.  But the bigger issue is that the “Big 3″ require more than good management (although that’s needed too. ) This situation requires outside thinkers who can cut through an outdated business model.   More Steve Jobs and less Rick Wagoner.

2. The brands are irreparably damaged 

If you’re buying a truck, Ford and Chevy are good brands.  But relying on trucks for too long is a big part of their current problem. A Chevy or Ford car though?  Forget about it.  Nobody wants to drive a Ford or Chevy car.  You drive a Ford Escort (like I did for 3 years, lime green, by the way) because you have to – because it’s a hand-me-down or cheap.  But certainly not because you think it’s a good car (it wasn’t for me) or because you’ll feel good driving it or because it looks cool.  Sure, some brands in their portfolios, like Cadillac, have had a resurgence.  Spin them off and let someone else run those brands. 

3. Unions

No matter how competitive the unions allow wages to get, they’ll always cause another layer of burecracy, headaches and distraction that takes away from the business of making a good product.  Bottom line.   Unions did a lot of good for workers rights in the wake of the industrial revolution, but their time passed decades ago. 

4. The dealer model is outdated

Did you ever think about why you can’t buy a new car online? Dealers have managed to put laws into every state preventing this.  Sure, buying cars online isn’t for everyone and many will still want a test drive.  But I bet shoe stores never thought Zappos would do so well.  Think about how much better inventory management would be if auto companies could sell direct.  Think about all of the cars sitting in lots now, unsold.  Think about how you could order exactly the car you want, with the options you want, without settling for whatever happens to be on the lot that day.   

5. The government is now a major stockholder

Bush bypassed the legislative branch and authorised dollars slated for financial services companies for the auto industry.  Well, I guess it makes sense since GM is conveniently, now technically a bank.  With luck, they’ll run it as well as the DMV or my local Post Office.  Or FEMA post-Katrina. 

 

Bottom line. Americans love cars and our whole lifestyle is built around driving every day.  Let these dinosaurs fail and I guarantee a hundred companies will spring up to take their place, hiring the skilled auto workers and putting them to better use building truly remarkable cars for this century.

Posted in Auto Bailout, Economy | Tagged: , | 2 Comments »

Forget Madoff. The US government (and us) are running the world’s largest Ponzi scheme.

Posted by Alex on December 23, 2008

The Ponzi scheme Bernard Madoff ran for decades – probably the biggest scam in history – is big news.

Coincidentally troubled automakers have also been in the news.  As have been Banks and Financial Services firms.  All of them asking for a handout.  All saying it’s all for the greater good of the country.

It shouldn’t be surprising that now commercial developers, greedy from decades of increasing property valuas, are getting in line for a handout. And why not? The slippery slope was greased when Bush overstepped congresses’ consitutional authority, and used funds originally slated for financial services firms to bail out the auto makers.

So what’s the connection with Madoff?

Everybody now knows what a Ponzi scheme is.   And yet without irony, the government is feeding into our own version of a Ponzi scheme, one we’ve been running for decades.

Here’s what I mean: As you probably know, our government is in deep, deep debt.  And we continue to run deficits, month ater month, year after year. So it has to borrow money, day after day, year after year, not only to stay in business, but to repay the earlier debts.

But now they’re getting into a new business: loaning money to failing business; business which are failing because they (and/or their customers) can’t borrow any more money.  Huh? So we’re now loaning money to auto companies, which are failing to a large extent becuase they make too many cars too many people don’t want, so they can continue to make too many cars during the recession, even though most people won’t be able to afford those cars during the recession.  Except that our government is also loaning money to banks in the hopes they’ll loan more money to consumers to buy those cars they can’t afford otherwise.

And where does that government bailout money come from?  Loans the government takes, largely from foreign investors.

Madoff’s scam finally collapsed because eventually his investors started to pull their money, and in a down economy, he coudn’t attract enough new investors.

What happens when the US government can’t attract enough new investors willing to loan us money?  Sounds like a Ponzi scheme to me.

Posted in Economy, Rant, Uncategorized | Tagged: , , | 2 Comments »

 
Follow

Get every new post delivered to your Inbox.