Perspectives on the US Government Bail-Out of the Auto Industry

The US government is still struggling with the issue of what to do with the big car manufacturers (whose CEOs flew to Washington on separate private jets to ask for billions of dollars of government money to help their companies survive). Yesterday, Congress set a deadline of December 2nd for the car makers to present a plan to show how they would become financially viable.

Should the government be bailing out these companies?

Wall St Journal:

"Big companies. Big numbers. It is hard for any politician to say, “So what, let them go bankrupt.” But the sad reality is that to save Detroit, Washington will have to destroy Detroit. A merger of GM and Chrysler won’t do away with Detroit’s ever-expanding pension and health-care liabilities or its onerous UAW contracts. And it won’t fix the Big Three’s issues with poor product design or quality control. The Big Three needs a radical restructuring dictated by the bankruptcy process–or some variation on it–and not a government plan that tinkers with the status quo. So here is a proposal: Let each of the Big Three do what is in the interest of its shareholders and creditors. Let them try and merge with each other–if they can. Let them each file for bankruptcy-law protection–when or if necessary. When Chrysler goes bankrupt, let GM or Ford or a foreign rival pick up Chrysler’s assets on the cheap. If GM or Ford head into bankruptcy, let the government step in–but only on punitive terms.

Punitive terms? Reduce all management, worker and retiree pension and health-care benefits. Remove all union contracts. Replace senior management and the boards. Haircut the creditors and recapitalize the companies."

BusinessWeek:

"Washington would impose conditions and promise strict oversight, but it simply can't push through the kind of transformative change the industry needs. There would be too much political opposition, and regardless, the bailout sums being bandied about—$25 billion of taxpayer dollars, for starters—would only keep the Big Three heaving along, basically as they are. It's a life-support solution, not a cure.

That's why the boards of the automakers should take the courageous step of putting their companies into bankruptcy."

Harvard Business Publishing:

"The same people who want GM to live or die on its own will often use Darwinian concepts of "survival of the fittest." But evolution is about life or death, eat or be eaten.

If you see a dog about to be hit by a car, you don't say, "that dog deserves to be weeded out," or "What about the other dogs that are competing for kibble?"

No; you save the dog. Business isn't about evolution, it's about existing lives. If we can spare some suffering, why wouldn't we?"

New York Times:

"If G.M. or Chrysler were to go under, tens of thousands of people would be thrown out of work. Pensions would be in danger, potentially putting taxpayers on the hook for the bill. Auto suppliers would start defaulting on their debts. Dealers would close. But if General Motors and Chrysler were to merge, with some sort of government assistance, the story might end pretty much the same. The combined company would probably limp along, laying off thousands of people every few years. Then — bet on it — G.M.-Chrysler would come back and ask for another bailout. It has happened before: Chrysler was rescued by the government over two decades ago. Now here it is again, cup in hand.To make a combined General Motors-Chrysler work — let alone flourish — the company would need to do everything that is impolitic. It would have to virtually win big concessions from the U.A.W., cut salaries and benefits, and lay off a lot of people, fast. Oh: and it would also have to make cars that people actually want to buy. Washington cannot help there."

Indian Social Networks Survey Results

Business Today recently published a survey on Indian social media use. Some highlights:

• India has an estimated 17 million people who use social networks like Orkut, Facebook, Linkedin etc. (Yes, this is almost the population of Australia, but considering India's billion residents there is obviously scope for significant growth in the future.)

• Contrary to the belief that these sites are only used by younger people, 78% of working executives above the age of 35 use social networks, as so 70% of senior managers (VP and above).

• Companies are starting to look towards these networks. During the IPL competition, the Mohali team successfully used Facebook to connect with fans.

• Ad spends on social networks are between 4.4% and 9% (depending on whose numbers you believe) of total ad spends on digital media, which in itself is only about 1% of India's total ad spends.

Brilliant (and free) website tools

Great compilation of free website tools for anyone who is working on a website, whether personal or business.

I find that so often in India, websites suffer from one of the following:

- someone has let a designer loose on the site, resulting in a heavy flashy site with no consideration for search engine optimisation.

- No one has performed any sort of usability testing. Outside India, any company I have worked with, even small organizations, has done some sort of testing before putting a website online. This can just be sending a link to a small group of customers and asking for their feedback, or visiting them at their offices and asking them to use the site while you watch. Within India, the structure and design of a site are often a management decision, perhaps made by just one manager based on what they 'feel' is best.

- As companies have grown in the booming economy, their websites have sprawled. New pages and sections have been added without anyone stepping back to look at the overall site.

This set of tools can help you get an idea of your site, from the readers viewpoint. You can see how fast your site loads, simulate how the readers eys will move over your page, survey your site visitors and test out different page designs. And thats just for starters!

Enjoy the tools here at grokdotcom.

Professionalize your Twitter profile and crazy up your Facebook status.

If you are just using Twitter to chat with friends, then it doesn't really matter what you put on your profile. But, if you are using it for your company or to build your reputation, it can pay off to put a little bit of effort into changing the default avatar and spicing up your profile page.

Socialdesire has a video with tips on this here.

And just for fun, if you want ideas for unusual and funny ideas for facebook status updates, try
generatus.com. As the name suggests, it is an status generator. If you use it before everyone else discovers it, then people might think you are original and clever. Time is running out.

Microblogging: if you don't use it yet, you probably will soon!

Microblogging is quickly becoming a popular way to disseminate information, be it news, gossip, sales announcements, product updates or corporate conversations.

How does it work? You use your computer or mobile phone to write a short message (140 characters), which is passed on to anyone who has elected to ‘follow’ your messages. Sort of like sending an sms to a group of people, who can then see other people responses. Similar also to facebook etc 'status updates'.

So who do you choose to ‘follow’?

It could be your group of friends, for planning social events. It could be your favourite shops, to hear about last minute sales. It could be news agencies like CNN, so that you always have the latest news updates. Or, it could be thought leaders in your industry so that you can learn about their latest opinions on events, strategies, software and tools.

The most popular software for microblogging is twitter (www.twitter.com) , and there are dozens of good websites that will help a completely new user get up and running quickly.

On several occasions, such as the Mexico City and Chinese earthquakes, news of the disasters was spreading via microblogging up to an hour before major news networks had reports up. People who were actually at the locations were sending warnings, descriptions of what was happening and letting their friends know that they were ok, using Twitter within minutes of the quakes striking. As their friends replied, the original messages were passed on to new groups of friends, and so word spreads.

The obvious warning in all this, is not to write anything that really shouldn’t be distributed or that you would be later embarrassed by, should a future employer choose to have a look at your online presence.

Microblogging is also becoming common in the workplace. Imagine being able to send an instant message to your colleagues: “we are looking at dealing with company XYZ, has anyone worked with them before?” or “our team just found a solution to problem ABC, contact us for info”. Many large technology companies are already using internal microblogging programs that allow employees to tap into each other’s knowledge on an ongoing basis.

Companies can also follow the microblogging world for customer service, by constantly searching for references to their companies name. A message from a ranting customer will be instantly noticed and the company can quickly respond. Dell Computers has multiple employees who monitor twitter posts and respond directly to problems. Dutch Railways uses twitter to announce delays in real time.

If you want to get started, or are already using twitter and want to look at add on programs, check out: here, here and here