Archive for December 15th, 2008

Bush bends, UAW wins big … automakers still bankrupt.

December 15, 2008

Excerpted from IBD, “Rewarding Failure”, December 12, 2008

The proposed $15 billion bailout of the Big Three failed in the Senate for one major reason: Some lawmakers stood up to the unions. But their stand may be moot, since automakers may get the money anyway, even though the idea is wildly unpopular among voters

In addition to major restructuring by the automakers, GOP senators insisted on givebacks by the United Auto Workers. The UAW responded with a resolute “No.” 

Gold-plated union contracts are a big reason for U.S. automakers’ woes (though managerial incompetence at the Big Three also played a role). The average Big Three worker made $73.26 an hour in 2006; the average worker at a foreign transplant, $44.20.

Last year, Toyota made 9.37 million vehicles. GM, virtually the same number. Yet, Toyota made a profit of $38.7 billion on its global operations, or $1,874 per car, while GM lost $38.7 billion, or $4,055 a car, almost entirely due to its operations in the U.S.

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Full article:
http://www.ibdeditorials.com/IBDArticles.aspx?id=313977740860863

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Posted in Autos - Travel, Financial Crisis | 1 Comment »

Bold idea for the Detroit automakers: Leave Detroit (and, maybe, the country)

December 15, 2008

Jagdish Sheth, a professor of marketing at Emory University’s Goizueta Business School says:

“The car companies should legally separate their international divisions from their domestic operations, so they no longer subsidize the U.S. operations. Many of the automakers are actually doing well overseas, especially in emerging economies like China, India, Russia and Brazil, where demand for vehicles is still relatively strong”.

Excerpted from Knowledge @ Emory
http://knowledge.emory.edu/article.cfm?articleid=1201

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Ken’s Take

Sheth may be onto something. So, why not take his idea a step further? 

Perhaps the Detroiters (at least Ford & GM) should legally separate the international operations, then enter bankruptcy proceedings in the U.S.  Then, either a real restructuring would happen, or the companies would become profitable entities without a U.S. presence.

Aren’t corporate strategists taught to exit unprofitable markets? 

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"Car czar" must have sound judgement … which disqualifies anybody who would take the job.

December 15, 2008

Car czar “is an undesirable job. Managing bailout funds in an industry resistant to change won’t be easy. It’s also a government job. Taken together, that means a high risk of waste, fraud, and more bailouts afterward. Nobody wants to sign on to failure.”

Excerpted from IBD, “Romney For Car Czar”, December 11, 2008
http://www.ibdeditorials.com/IBDArticles.aspx?id=313892314464564

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Ken’s Take: AMEN !

Mitt and Volcker are smart enough to stay away from this one, right ?

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To continue in English, please enter your credit card number … a new low in customer service courtesy of Dell

December 15, 2008

Excerpted from Wash. Post,”The Bangalore Backlash: Call Centers Return to U.S.; Some Firms See Value in Familiar Voices”, December 11, 2008

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If you prefer a customer service agent who speaks “American,” then computer maker Dell has a deal for you.

Catering to consumers put off by the accents of Bangalore, Manila and other call-center hubs around the globe, Dell will guarantee — for a price — that the person who picks up the phone on a support call will speak “American”.

The Your Tech Team service, with agents in the United States, costs $12.95 a month.  It also promises that wait times will average two minutes or less. Without the upgrade, a customer is likely to get technical help from someone in India, the Philippines or the other places where Dell has operators.

Occasionally, “we’ve heard from customers that it’s hard to understand a particular accent and that they couldn’t understand the instructions they were getting,” said Dell. “This illustrates Dell’s commitment to customer choice.”

“Most people in the customer service world believe that if you have sold me a product, then support for that product should be free,” the managing director of  a call-center consultancy.

Full article:
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/10/AR2008121003574.html 

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