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Where Are The Leaders?

The thing that annoys me the most in this automaker crisis, is the question of leadership. Not the Obama style of leadership, where appearance is all that counts, but the real thing. I think the world of President Bush, but on this issue he's been sitting back and waiting for someone else to find the answer. Same for President-elect Obama; sure he can say it's not his problem right now, but considering that he will be at the helm in just a few weeks and therefore whatever is or is not done will bring him the consequences, you'd think he could motivate himself to get moving on a clearly important issue. Of course, the do-nothing Harry Reid and Nancy Pelosi have also been still and quiet in terms of productive suggestions - shrill accusations and rants may play for soundbites, but they don't move the issue ahead by even an inch. Then of course, we can also look at the recent performances of the automakers' executives, the UAW, and the many anointed 'experts' in the industry, which have amounted to 'help me and let the rest fend for themselves' - predictable but again not real leadership by any reasonable definition. The reason this problem, which most of us saw coming years ago, has not yet been resolved and may well be addressed in a distinctly foolish manner, is that no one - no one at all - has shown any leadership.

Some decades back, I used to chat with my employees about their long-term plans (still do, of course), and I was struck by how many thought that getting into management would make their lives easy. Just give the orders and make the others work, sweet. Of course the reality is much different. Some managers no doubt try to run their businesses in that way, but that is bad management. Any good manager can tell you, that effective management means you have to direct everyone's efforts to get the best results, and that responsibility, credibility, and accountability start with you. To my mind, that truth only increases in importance as the rank rises. Look at the top title for most businesses: Chief Executive Officer. It means that the CEO should be the one to state clear priorities, address the top needs, and take full responsibility. That does not mean the CEO is the fall guy for whatever goes wrong, but it does mean that the CEO must take clearly communicated, well-defined actions which protect and improve the company's long-term health. It's the same, to a lesser degree, with all of the other chief officers. And in this crisis it's painfully obvious that the chief officers have been trying to hide from the problems, not address them. It's also obvious that there are far too many "chief" officers at each of the three companies, for the real chief officers to get a hold of the matter.

The last couple days have shown indications that Congress means to bail out the automakers. As a result, everyone is talking about what conditions should be put in place. For me, it's obvious that the current set of top officers at each of these companies needs to be replaced, but there's more. The three automakers need a streamlined, shareholder-controlled leadership design, so here's what I think needs to be done, as part of any package:

GM - fire all top officers, have the SEC search for new top execs. Do not limit the pay on the new team, but tie it to performance, both short and long-term. Also, limit the number of top officers to ten. And limit ownership by any single person to no more than five percent, or fifteen percent by any family or consortium.

Ford - same as GM, but also change the two-tier system which allows the Ford family to control the company with a minority interest. Ford can turn down the aid if they insist on keeping their structure, but if the public is going to bail them out, it's overdue for Ford to become a publicly-owned company in every real sense.

Chrysler - same as GM, but require all significant shareholders to sell their ownership down to the 15% cap specified in the GM case, and sell them at the current stock price, not the later price resulting from the aid package. No government aid for a privately-owned company, especially one with a tear-down reputation like Cerberus.

I have a sneaking suspicion that most of the top officers and shareholders will resent and resist this move. But it should be non-negotiable and required prior to receiving any aid. If they need it, these companies should feel the same pain they are or will be inflicting on everyone else around them.


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Comments (3)

Allan Mulally of Ford does ... (Below threshold)
Macy:

Allan Mulally of Ford does not deserve to be canned or lumped in with the heads of GM and Chrysler. He turned Boeing around and was just brought in 2 years ago. He's made major changes that have Ford positioned much better with more cash on hand and superior products coming within the coming months. Any company that big with entrenched business practices needs a few years more to get their house in order.

D.J. Why is President Bush ... (Below threshold)
Allen:

D.J. Why is President Bush sitting on his ASS on this? Contrary to what you might think, he's been sitting on quite a few things.

Why didn't the finical companies have to submit a plan to congress, like the big 3? Every stop to wonder about that?

I agree with you on firing all management of GM and Chrysler, and some of Fords. Also, I agree with you about the stock. It is NOT, and has never been about the blue collar workers, MANAGEMENT has really screwed up.

But the question remains about the current condition of the economy, why hasn't President Bush started doing more. This economy, like 9-11, has happened on his watch. He is, like it or not, responsible for what happened on his watch. And if you disagree with that, then why does the Navy blame the Captain of the ship when something happens on his/her watch?

And you really can't blame Clinton for this economic mess we are in, as he hasn't been in office for the last 7 1/2 yrs. It doesn't matter if McCain or Obama won, they have a mess to fix from President Bush, right?

And is the GOP that's left in Congress going to make roadblocks for any economic solutions (that may or may not work) Obama wants to try? At least he will be trying, and that's more than what President Bush is doing, except Bush is spreading the wealth upwards.

The new word for that is wealth care. Just socialism spread a different way, right? Let's face it, GOP or Demo, we are all in this mess together, so what are we, the people, the taxpayers, going to do about this mess?

"D.J. Why is President Bush... (Below threshold)
JLawson:

"D.J. Why is President Bush sitting on his ASS on this? Contrary to what you might think, he's been sitting on quite a few things."

Well, at the risk of stealing DJs thunder on this... here's my take.

Bush has had enough of the Democrats stalling damn near everything he's tried or proposed for the last 7 YEARS. Pre-Bush, the Democrats were saying Social Security was in trouble - and they didn't do much to fix it. Bush tried to come up with some sort of plan, and the Democrats did everything they could to block any sort of consideration of it. Social Security WASN'T in trouble after all! It was amazing how it went from being something that needed fixing to something that damn well better not be touched!

NOW you want Bush to do 'something'?

If Bush tried to block the bailouts, he'd be accused of wanting to starve the middle class. If he offers alternatives to just handing out money, he'll be accused of wanting to help the evil rich business owners.

If Bush proposes or does ANYTHING, it'll be portrayed as the WRONG thing and idiots in the media would be lining up to scream insults at him. After 7 years of that crap, wouldn't YOU get fed up with it also? He's got a month left - why should he bother throwing a lifeline to Democrats who would just throw it aside and spit in his face for DARING to try to save their asses in the first place? It's not like they'd implement anything he suggested - that's simply laughable!

Now the Democrats have what they wanted. Obama's going to be in the hot seat, backed up by the House and Senate. Last time that happened, two years later the Democrats got pounded in the mid-term election. Let's see if that happens again.

"Let's face it, GOP or Demo, we are all in this mess together, so what are we, the people, the taxpayers, going to do about this mess."

Haven't a clue, man. The Dems had all the criticism, therefore they need to come up with workable answers. So far they've run up a $7 tril bill with promises and guarantees and bailouts. What the end bill will be, I don't even want to think.

So what are we, the people, the taxpayers going to do?

Get by as best we can. That's all we ever can do when Washington goes bugfuck crazy spending our money, whether times be good or bad.




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