GM has been a sinking ship for decades – a company that stopped moving with the times and found it more and more difficult to adapt to the shifting landscape. The failure of management to adjust to change and a broken financial business model has ended up costing the taxpayer billions.
They had their eye off the ball, thinking that they could make money through their financing rather than building more competitive and innovative vehicles. Today, the GM website’s home page parades the words “RE: INVENTION” – a day late and $50 billion dollars short, don’t you think?
Why do we have to come face to face with disaster before we get the message and take action? GM's failure is an indictment of American mismanagement – a mismanagement that has been tolerated for far too long. It highlights the damage to our economy and demonstrates what happens when we refuse to move with the world around us.
The parallels within the government at the Federal, state and local levels are bloodcurdling. I have been on the inside of the hallowed walls of government and observed first hand the enormous misuse of taxpayer’s funds. California is a prime example of failures in management – both at State and local level. I have seen first hand hundreds of millions of dollars literally thrown down the drain, because Government departments fail to execute cost-effective, premptive business models.
There is unprecedented growth in government entitlements, unemployment benefits, housing subsidies, health care, etc. Legacy costs, exhaustive project cost overruns, no focus and clear set of priorities. To top it off, there is little if any accountability by government to get things done.
Governor Schwarzenegger has gone to Washington to ask for government assistance. At the same time he’s making a public statement that California is spending more money than it is taking in. The Governor has an eye for the obvious.
The question is what we are prepared to do to rectify the problem, and keep it from happening again. Sadly drastic measures like layoffs and closing parks does not solve the problem. This is not unlike taking an obese person and amputating his leg, instead of putting them on a strict diet and exercise program.
We need a plan of action not rhetoric to solve these problems in the form of a “New American Business Model” for both the private and public sector. One that mandates three basic tenants:
1) Don’t spend more than you make.
2) Increase productivity and efficiency equal to any increase in spending.
3) Refresh and modernize your business model and strategic plan every two years.
It really couldn’t be simpler. If the Governor of California is serious about getting back on the right track, he can always can give me a call.
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Jay,
ReplyDeleteYou are right about California being a sinking state. Is the Governor losing the battle with the other powers in the state? I think the
Federal government needs to say a big NO to any bailout money for the state of Calif. Let California fix it's problems internally.
Families that survive are taught to spend no more than they earn. The same philosophy should apply to all sectors of government.
Tom
I agree that everyone should never spend more than they make. The problem is, California got caught up in the increasing tax revenues from the flipping of properties and hired and spent based upon its projected income stream.
ReplyDeleteIf you lost your job, you're entitled to unemployment compensation. California has come upon hard times. Shouldn't the Fed help rescue it the same way you'd be rescued?
If we're bailing out Wall Street, homeowners and auto manufacturers, why not California? If GM is too big to fail, isn't California?
How do we compete with slave labor in China. The only way is either with tariffs or subsidies. Tariffs will create a trade war and cause China to call in their chips. Unacceptable. Bailouts and subsidies will help re-vitalize our manufacturing base. But it robs the taxpayer or by printing money, it robs the the holders of US currency.
Maybe the Fed should be printing money to help all failing industries compete. Eventually, a lower value dollar will eliminate the need and our exports will be able to compete at a lower price.
Seems pretty clear to me that if we’re giving out billions of dollars to save banks and lets not forget our beleaguered automaker GM it should be obvious to give some of that money to California, who’s in much worse shape than some of these banks. It’s not some giant corporation we’re dealing with…Its Our STATE
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