March 31, 2009

Epic Fail

Let's say you hit a local coffee place every morning. At some point, their coffee started sucking. You thought it was a fluke because, you know, they'd made pretty good coffee since you started going there. But after a week, it didn't get any better. Would you keep going?

Let's say you hired a maid to clean your house. Now, she started strong but after a while, you noticed that the guest bathroom wasn't getting cleaned and there was still some left over residue from the chocolate milk your kid spilled on the kitchen floor. Eventually these oversights became the rule, not the exception. Would you continue to employ this person?

Let's say you've been a loyal shopper at a local grocery store. But lately the produce doesn't look so hot. The selection of products isn't what it used to be and the prices have gone up. Do you continue shopping there?

Let's say you're a football fan. You buy season tickets every year. The past couple of years, though, you notice that the ticket prices have gone up exponentially, parking is an additional expense and a nightmare, the hot dogs suck ass and instead of getting better, your seats have gotten worse. Worse than that, the team can't seem to manage a winning season. Do you hang in there or do you give up the season tickets?

The vast majority of you would probably walk away from any if not all of those situations. I know I would. But would it change your mind if you found out that the local coffee place, while part of a huge company, was teetering on the brink of closure and that the employees were in danger of being unemployed? Or that the maid was a mother of three and her husband had just been laid off? Or that the grocery store was hovering on the cusp of bankruptcy? Or that the football team employed thousands of individuals many of whom were in danger of being laid off as a result of poor attendance and lack of interest?

After being given months to come up with restructuring plans and over $17 billion to stay afloat, the Obama administration just gave failing grades to the plans submitted by Chrysler and General Motors. It's pretty pathetic but I guess we shouldn't be too surprised. After all, these companies continued to push gas guzzling behemoths in the pursuit of the widest profit margins possible even after gas prices notched into the stratosphere. And they were either too stupid or blissfully ignorant of the downstream fallout and the resulting dearth of business their model would eventually cause.

In that respect, I'm perfectly willing to let them fail. I honestly believe in the near-mythical American work ethic - that we work hard, we move forward, we reap the benefits of our labor and we don't ask for handouts. We are not just entitled to prosperity by virtue of the fact that we're Americans. So why should we reward bad behavior when the auto industry has a proven track record of not getting it right?

But the argument gets more complex when you start thinking about the 140,000 American workers employed by GM and Chrysler. And that's only the beginning. Because for each one of those workers, there are countless others in related industries directly hit by the failure of the American auto industry. Then add the other countless souls who work in unrelated industries but are nevertheless directly impacted - the waitress in the factory town who loses her job because the breakfast rush is now nonexistent, the hotel workers who find themselves in the unemployment line because their hotels no longer host automotive conferences or visitors to the local plant, the teachers now without students because everyone has fled the small factory town now that the sole employer has closed its doors.

Try noodling the options and impacts in your heads for a while then let me know what you'd do - let the manufacturers go under or intervene and save what can only be described as a broken industry. It's a tough question. Like Hugh Hefner's nightly quandary - Do I pop a couple Viagra and screw the real blond with fake boobs or the fake blond with real boobs that look fake?

Like I said - tough question. What would you do? About the auto industry, not the Hefner thing, though feel free to chime in on that one too.

Posted by Chris at March 31, 2009 6:25 AM
Comments

I thought epic fail was generally a gamer's term?

This is... hard. I thought that the companies should just be refused. But when you put it like that... ouch.

Won't they run out of money eventually when people don't have money to buy the cars, though? But people will have a bit more money because they're being employed in the first place. Gah... I don't envy the government right now.

Posted by: Hannah at March 31, 2009 6:53 AM

I still think they should be allowed to fail, absolutely. I feel sorry for the workers, but I can't forgive the CEOs for the mistakes they've made.

Posted by: Stephanie at March 31, 2009 7:12 AM

My dad worked in the auto industry for years, and maybe it's from hearing him talk about how cars have changed over the decades that I have come to this view.

The auto industry is very, very new compared to, say, the garment or housing industries. It was created almost within living memory, flourished, and started to die pretty quickly. By the 1960s people knew something had to give. Half a century is a long extra inning by any industry's standards.

You know, Henry Ford and the other car and tractor manufacturers were largely responsible for the death of the carriage manufacturing industry, not to mention the decline in population of domestic horses. People's concepts of time, distance, wealth, and freedom changed dramatically because of the horseless carriage. North American cities are planned around cars, not people. That's a profound impact. Ever been to a medieval town? Some streets wouldn't even accommodate a donkey carrying panniers on its back. Compare that to the wide street plans you see in western North America.

So: 140,000 people, skilled in tasks relating to the manufacture of transportation machinery and comfortable with a factory setting need jobs. Think about what amazing things these people could help build.

Now who's got the guts to take the risk and get them to build something we can actually use into the future?

Posted by: Kat at March 31, 2009 7:14 AM

I spent 13 years working for Ford or one of its spinoffs. The supply chain is HUGE for the auto industry. We'd all like to let Ford/GM die because we all love to see the bad guys fail (especially when our car doesn't work), but it would send Michigan into a total free fall. Can you say 30% unemployment? Along with that, if the suppliers fail, other auto companies will be unable to get their parts/materials which would send them into failure as well.

I'm all for an orderly bankruptcy. Put the money in to allow them to come down slowly, giving suppliers a chance to shift gears to other companies. I know some will lose jobs, but I don't see an alternative that works.

And I'd totally do the fake blonde with real boobs.

Posted by: Jon (was) in Michigan at March 31, 2009 7:34 AM

From someone who has lived through 2 chapter 11's, (Pan Am and Delta) and watched the average worked and retiree get totally screwed, do I think that Obama should be calling the shots in Washington?
No.
Are you surprised?
Well, Chapter 11 did end Pan Am, but it helped Delta restructure it's debt, and did shake out the money grabbers, and helped get a good business minded CEO.
Watch out for government intervention into too many areas, lest we start looking like Russia.
PS:
The coffee place, the grocery store and the maid, all would have been spoken to. I have told a coffee place that the coffee sucked and they made a fresh pot and it was good. I told the Produce manager that his cucumbers (no laughing here) were terrible, and he switched dealers and got good ones in. And the maid, well, since I am the maid, I just yell at myself and I feel a little better.

Posted by: Maribeth at March 31, 2009 7:34 AM

Many companies come out of bankruptcy and still survive, and they don't technically "fail". The US Government and TaxPayers wallets need to close, GM and Chrysler are in trouble because they have huge union issues and make an inferior product. Let them go into bankruptcy like most companies, the "too big to fail" tagline is just ridiculous. The parts of GM/Chrysler that are still viable will be purchased by other companies and will still thrive (i.e. cadillac).

Sorry I feel the wallet needs to be closed. Maybe that makes me heartless but so be it. I'm not in favor of the government bailing out these companies, nor owning and having a say in private companies.

Posted by: Deirdre at March 31, 2009 7:35 AM

Living in Michigan, this is a real issue for us. If the auto companies fail, the state will probably fail as well. And, specifically with GM, if they even declare bankruptcy, at least thousands of people, including probably my husband, lose their jobs. This is because if they go bankrupt, they don't have to pay their suppliers, and if the suppliers don't get paid, they can't pay their suppliers - where my husband works.

Tangentally, if the state fails, my job, funded largely by state grants, also disappears because they'll pull that money faster than you can say boo.

So, no. I'd prefer if they didn't fail or go into bankruptcy actually. I can understand the frustration with all the bail-outs. I'm frustrated too, and have been for a long time. I don't think they're the perfect answer, but if they have a chance of preventing these larger problems I'm all for it.

Posted by: Jessie at March 31, 2009 7:41 AM

There are no real boobs at the Playboy Mansion.

(Not unless you count Hef himself.)

Posted by: Elise at March 31, 2009 8:49 AM

It occurred to me that while I don't like the government telling a business how to run its business, I certainly don't like handing over piles of my money to someone who clearly doesn't know how to use it properly without giving them some rules as to how/not to spend it.

If it weren't for so many people/retirees depending on the success of car companies, I'd let them fail.

Posted by: Roses at March 31, 2009 8:54 AM

Ummm..if I were Hef I'd do both of them at once...he's got the Viagra ;-)

Posted by: Gabriella at March 31, 2009 9:07 AM

Go for the real boobs, Hef!

As for the auto industry, I have no idea. It is such a complicated question. This country needs the jobs the industry creates, but if their business model is broken (and it seems to be) then no amount of money is going to fix the problem.

Posted by: bad penguin at March 31, 2009 9:46 AM

Normally I try to be funny with my comments but on this one strikes a certain chord with me.

Why do we villainize the CEO's of corporations (Fail or succeed)? Yes they make good and bad decisions but in reality their decisions are based on Profit. That is what they are supposed to do. Making a profit is based on sales and cost. Sales are based on Supply and demand. Cost is based on overhead and what not. The people of the US demanded cars. GM made cars at a cost that made a profit. Then the people of the US demanded safer cars. Costs went up. Then the people of the US demanded bigger cars. The cost went up. Sure prices went up and some profits went up.

The in a very few short years, the people demanded fuel efficient hybrid super technology cars. The car makers didn't know how to make these cars and could not supply the demand. The demand went elsewhere. Profits dropped.

The same union worker who benefitted from years of plenty now is going to suffer the years of lean. Same thing with the CEOs and the suppliers. As well as the shareholders. They should all be the ones that now DEMAND better of those companies.

I despise the fact that the government is getting involved. I think the Car makers should have to file Chapter 11. Failure is great way to learn from mistakes and make a person or company better.

And like Hugh says...you have to suck before you can succeed.

Posted by: William at March 31, 2009 9:57 AM

I think that the government has made a reasonable effort to prop up the industry. Yes, it's going to suck a whole lot for a whole lot of people, and it's going to suck at least some for the rest of us who aren't directly impacted, but unless we're planning to make car manufacturing a governmental agency, I think we have to draw the line somewhere. To some degree, we all caused this mess, from the auto workers with their high demands to the car buyers who didn't insist soon enough or strongly enough that the company shape up and provide well made, fuel efficient vehicles.

I think it's time to let go and suffer the consequences.

Posted by: Becky at March 31, 2009 10:49 AM

Very tuff stuff, indeed. Is there really a correct answer? I don't think so. No matter which way we slice it and who does the slicing there will be undeserving people that suffer.

My gut reaction is to say if the coffee shop, the maid, the grocery store or the football team cared enought to keep me as a customer they would give me the type of service that I was sold originally. If they feel that they can make changes that result in poor performance then they should be able to accept the reprecussions.

I also feel though that we could stop making cars today, put the people in the factories making them in shops throughout the country repairing/recycling them. In my mind it would just be a re-arranging of sorts cutting the fatty CEOS. This would also help the enviroment. Then we take some of the monies planned to save the auto industries butt and we vamp up public transportaion throughout the country.

We have eliminated profit hungry auto industry types, put hard working individuals in jobs somewhat similar to what they are now, created new jobs through better public transportation and helped the enviroment.

Just my two cents though, and like I said I dont think anyone has the answer. Sadly.

Posted by: Kelly M. at March 31, 2009 10:54 AM

I've typed a few sentences and deleted them. Nothing sounds right. Nothing is right. It's too complex.

They have already failed. So, what makes more financial sense, helping them work their way out of it at taxpayers expense, or allowing them to go bankrupt and therefore directly impacting all of the people they owe and that have contracts with them? Either way, it's going to cost us. 14,000 American employees? No way, it's more like 1,400,000. And I'm one of them.

If we're going to get in bed with them, we NEED to stop handing wads of cash over without asking for accountability! If Obama wants fuel-efficient cars, he should say "Turn all of your Hummer plants into electric car plants with this money". Or something to that effect.

And then screw the fake blond with the real boobs.

Posted by: Brad at March 31, 2009 10:55 AM

I would help them out, but under the condition that they make real efforts to improve their fuel economy. Or something like that.

I'm glad that I don't have to make that sort of decision. ;)

Posted by: Hope at March 31, 2009 11:17 AM

There comes a time when a patient on life support either improves or is taken off life support. Chrysler's suck, they should be allowed to die. GM's are slightly better but still not on any list of vehicles I'd consider buying. Let them die and build something smarter and better in their place.

But, on the other hand, the car makers got something like $30 billion and tons of oversight. We gave $700 billion to Wall Street without any oversight at all, I'm much, much more concerned with dropping more than twenty times the cash on overly risky jackasses in expensive suits.

Posted by: Erik at March 31, 2009 11:20 AM

**disclaimer: I know absolutely nothing about world economy (but I'd also guess that few pundits really do)**

What if the coffee shop is in the wrong business and by allowing them to fail, you free them (force them) to make creative choices and get into the right business? I realize it's WAY more complicated than that, but isn't this kind of like feeding a drug addict? Or maybe feeding your 27 year old kid who still lives in your basement and plays x-box and eats your cheetoes all day? S/HE'LL NEVER LEAVE. (trying to be equal opportunity here)

And your Hef/boob analogy totally doesn't work because (I would -ahem- imagine anyway) those are win-win choices. Make it "one of these buxom bimbos will be so good my heart will explode and one will perform shiatzu and cure my sciatica, but I don't know which one is which."

Further, I saw a vid of Hef recently and I'm not sure there isn't a whole other "proping up an icon" situation there too. It didn't look to me like he was making a whole lot of choices that weren't "oatmeal or cream of wheat?" Ruf shape...

Posted by: harmzie at March 31, 2009 11:23 AM

and also (don't know if anyone has already said this but...) by allowing GM and Chrysler to "fail" they'd be able to declare bankruptcy and actually SAVE a ton of jobs. "Allowing" these companies to go into bankruptcy was probably the only legitimate way to save an industry.

I hate hate HATE that the government is involved in private enterprise now. This is going nowhere but south.

Posted by: chatty cricket at March 31, 2009 12:22 PM

we used to have a locally owned coffee shop in our neighborhood just a few blocks away from my house. the coffee was never that good. the food was even worse. but i went there multiple times out of neighborhood optimism and solidarity. every time i hated it. now, i walk a few more blocks out of my neighborhood to a much better coffee shop. eventually, the bad one went out of business. emotionally, i was sad to see it go. but realistically, it needed to fall prey to capitalistic darwinism. survival of the fittest. and i sleep easy knowing i did what i could and gave it a chance.

i think that's a good analogy to the current auto industry situation.

Posted by: kati at March 31, 2009 12:22 PM

Perhaps it's because I'm a crazy Canadian and hail from a land where we have a strong social safety-net, but I think these obviously un-viable companies can be allowed to fail without abandoning the workers.

Turn that bailout money into incentives to start new businesses, re-training programs for displaced auto workers, and yes, handouts for the unemployed to keep them fed and in their homes while they navigate this huge life change.

I've seen that happen, and work, when resource-based sectors fail (forestry, mining, fishing). Why not apply it to other industries whose practical utility has been exhausted (no pun intended).

Posted by: Jen at March 31, 2009 12:25 PM

I don't know.

How is that for an answer?

My family hales from the Elkhart, Indiana area, where almost everyone living there has a job that is somehow connected to the auto industry. Let the industry fail, and Elkhart will become a ghost town.

But I'm vehemently opposed to big gov't. And I think that is what is happening.

I'm sick to my stomach, literally, thinking about it. And I'm thankful that I don't have to make the call.

Posted by: Mindy at March 31, 2009 12:55 PM

From the business side, I'm all for letting them fail. Totally messed up business model that should fail. There's no way we should keep it going, supporting it. Free market economics.

But. BUT. There are so many American jobs on the line, that it's hard to look at it as just a business. We're talking lots of people who are only trained to do that one thing, and will have a very hard time finding new employment. It takes a community decades to recover from their sole/major employer closing (like mining towns), if they ever do. Do we really need more deserted towns in America? (I lived in the Detroit area for a while, and it's already pretty crappy. No need to add further crappiness to it.)

So I'm all for majorly hard-handed forced restructuring. Obviously it's broke. Let's attempt to fix it, since so many jobs are on the line.

Posted by: Kelly at March 31, 2009 1:04 PM

It's a tough call. When I think about it on a personal level, I most certainly want all the commenters above who are affected to be ok.

But I think the only real way out of the mess is an orderly bankruptcy. Let's bring in some inventive thinkers and put them in charge! It's time to re-invent the American auto industry. I, myself, have a '02 Jeep and I used to be proud of that. But now that it's falling apart left and right, my new mantra is "next car's gonna be foreign, Honda, here I come". If we keep producing the same inferior products, customers will flee. The American Auto industry has lost my entire family as customers. My parents have switched over to toyotas. My brother has an '02 Ford that has been a money pit. We're all going foreign.

Let's reimagine the auto industry, make a shift to quality products... I'll come back, I promise. I want to support my country. Just not with thousands of dollars to fix stupid, plastic pieces that break behind the dashboard, and heater cores that corrode, and power steering that fails, and bearings that break.

Posted by: Erin at March 31, 2009 1:20 PM

HEY PEOPLE, the auto industries will affect hundreds of thousands of REAl people. Not just CEOS et al. But putting that aside, you all should be even more angry about the bank and insurance bail outs than the auto bail outs. The autos have been trying to restructure to rationalize their money. What have those others done to rationaloize theirs? Why ir was to oblige former contracts to give performance bonosus to top employees who made the companies fail. It was a contractural obligation. And I don't see everyone up at arms for getting these people to change in order to recieve more money. Yes they will impact economies, but not the welfare of so many middle class people. The auto industry is trying to change, just give it time. A GM retiree.

Posted by: mary at March 31, 2009 1:40 PM

Wow, you really kind of nailed it on the head for what would happen. Honestly, while I don't think that they at all deserve a helping hand I can't imagine GM, the "Heartbeat of America" going under and people letting that happen. Yes, the have screwed up big time, but there has got to be a way to come back from that. And I don't have the answers and I doubt anyone else does either, but if they want to continue badly enough they are going to have to pull their heads out of their asses and get things back on track.

Posted by: Dianna at March 31, 2009 2:47 PM

I agree with what you have said, it is hard to make that decision to pull the plug on the undeserving company because of the fall out effect on all those bystanders.

Another reason why I fear our biggest car manufacturers failing: yet another resource we will be dependent upon from other countries. What if something occured where shipping vehicles in from other countries became unavailable. What would we do, where would we build war vehicles? Vehicles to move people around? I am all for open trade, but I would really like to have at least one American car company still standing.

Posted by: Jen at March 31, 2009 5:58 PM

Ok if I just had to be Hef I would do both of them at the same time ;), stamina not being a factor since he probably takes a ton of Viagra...

Posted by: Gabriella at March 31, 2009 7:33 PM

What I'd like to see is someone, somewhere, help the auto industry come up with a better plan. The one they came up with isn't good enough? Fine. What needs to change? What *is* a good enough plan? Isn't there some sort of general rule in business and leadership that if you're going to shoot someone's idea down, you should have a better one?

(I think the money-greedy executives definitely need to learn a lesson somewhere, and I wouldn't cry if they were suddenly jobless. But, man, you can't let the auto industry collapse in on itself. Detroit is already in horrible economic shape and I can't even think about what this would do to the city. Having grown up there, I really don't want to see my "home" local economy go through that when it already has enough problems. No one in my family works for the auto industry, but they'll still be affected by wider impacts of it (plummeting property values, etc).)

Posted by: Dawn at March 31, 2009 7:38 PM

Trying to think about it just makes me glad I don't have to make those sorts of decisions!

Posted by: Heather at March 31, 2009 8:03 PM

Chris, I don't usually comment but feel compelled to do so on this issue. There are many, many factors involved in the making and breaking of the U.S. auto industry and to so quickly and simply pass judgment that it should just fail is irresponsible. I urge you to read both the the articles written on the subject over at Sweet Juniper (http://www.sweet-juniper.com/search/label/automobile%20history) as well as an op/ed piece from yesterday's Detroit Free Press http://detroitfreepress.mi.ussrv06.newsmemory.com/demo.php? -- page A12) to help give you a bit of the perspective of "the other side."

It's important to remember that there is not much left that the U.S. still manufactures. If we allow all of our manufacturing fail, what are we left with? Intellectual property only goes so far in a global economy. Also keep in mind that many other countries subsidize their manufacturing (autos, airplanes, steel products, etc.) while we do not; nor do we push hard for international trade or environmental laws that might help our manufacturers and workers.

Ask yourself: how many financial institutions have been forced to remove their CEOs? How much more money have they been given without strings attached? What is the related and peripheral job loss impact and at what class level are those most likely to be affected?

It is a lot more complicated than "the local coffee shop" scenario, as you mentioned. I hope that those who read your blog will realize that before passing snap judgments on one of the oldest industries in the U.S.

Posted by: Tara at March 31, 2009 8:11 PM

I am so NOT savvy when it comes to the larger economic picture- I think many people who are experts in the field probably saw the warning signs...but greed can have a powerful hold on people and they just stop thinking logically. I'd like to say- let them sink or swim on their own...but then when you consider the ripple effect, how is that a viable option? I am not necessarily in favor of big government- but everyone is just floundering right now.
On a completely unrelated note- I am happy to see that U2 is on your play list :)

Posted by: Jane in Pa at March 31, 2009 10:04 PM

Uhm. I'm from Michigan. Which would pretty much collapse in on itself without the auto industry. Like you said, not just those employed directly, but indirectly.

I'm all for everyone working hard and getting theirs. But sometimes, people need help. Sometimes no matter how hard someone works, it's not enough. Maybe companies deserve something of the same...

Also, I would do them both. I'm Hugh Hefner. I can do that.

Posted by: Caleal at March 31, 2009 11:24 PM

Except that the car companies aren't given bailouts, they are given loans. They aren't pushing gas guzzlers, market economics are. They are just making what consumers want. Besides, I challenge anyone to drive a small car in a few feet of snow on a regular basis. I read your blog but your leftest crap gets on my nerves. So is Obama going to force feed what everyone drives now too??

Posted by: andrea at April 1, 2009 9:31 PM

Gotta say...NO even with the background details to the small-scale scenarios.

Why? Because feeling sorry or having compassion for someone isn't a go-ahead to do a shitty job.

The auto industry has known for years that it needs to change and it simply never wanted to. The problem is that it's on such a huge scale. The workforce didn't make the company decisions- that was accomplished by a few. Unfortunately everyone is impacted. The difference in the small-scale scanarios is the individual personal responsibility- the maid is responsible for her quality, as is the store manager and the people who make the coffe. If they need the business so badly they need to make their service/product worth buying. There are plenty of others who would take the job in a heartbeat.

So I don't really think the scenarios and the auto industry woes are parallel enough to be compared.

Also, you and Beth are both quite conscious of hiding your surname...did you mean to spill it?
:)

Posted by: jessica at April 2, 2009 4:09 PM

I need to stop commenting on blogs today. multi-tasking and reading/commenting on blogs doesnt work. I missed the entire paragraph about Hugh Hefner.

HAHA

I wouldnt screw anything with boobs, blonde or not. ;)

Posted by: jessica at April 2, 2009 4:15 PM

Here's another facet to the auto thing: My dad is retired from GM (he was a machine repairman, not a rich big-wig) and if the industry tanks, he risks losing ALL of his retirement -- that he worked 43+ years to earn. My parents will literally be SCREWED if that happens, especially in today's economy. And no one in our family is independently wealthy enough to be able to help support them.

Yet, I know that SOMETHING needs to happen to reel in all the fucking-up that is going on. I think Obama is on the right track, but I hope that my parents (and so many other people) don't have to pay the price themselves while the CEO's go on living their luxurious lives. It is just so wrong, in SO many ways...

There has to be some sort of middle compromise area, where the industry is forced to straighten up its shit and where the people caught in the middle don't suffer. GAH!

Posted by: ironic1 at April 3, 2009 12:28 PM


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