GM and UAW Demonstrated Leaders in Incompetency
The demise of GM as a major automobile company is an example of fear and greed running amok. As the curtain fell on the future of a giant free enterprise company it signals the end of an era and the beginning of another.
In a previous article titled, Magic, Pixie Dust and the Mirror or Truth, I extolled the failure of GM management being strong enough to resist unrealistic demands of the UAW. They failed to demonstrate the backbone to address excess with firmness and leadership. This repetitive failure occurred over decades cumulating in the bankruptcy now faced.
The UAW attempts to escape responsibility for contributing to the death of GM with excessive demands for wages, benefits, and featherbedding jobs banks by pointing the finger of blame on weak management at GM. While they intimate the leadership of GM had a responsibility to avoid agreeing to demands that were unrealistic they placed threats of strikes at the top of negotiating tactics. The weak GM management feared losing market share in a prolonged strike and they caved. It was a matter of avoiding a bill due today hoping they would be able to pay it tomorrow.
Tomorrow never came for GM or the UAW. Both now lose more than they would have gained if acting responsibility by stepping forward without fear on the part of GM and greed on the part of the UAW.
The Missing Steps
GM management needed to tell shareholder we might lose market share for a while but as a company, we will emerge stronger. UAW needed to tell the members that obtaining a contract that placed GM in a losing financial posture was not good for the union, its members, or any supplier that relied on GM for product sales.
We must examine if GM and the UAW recognized the extreme nature of the doom they created for the future. Did they know where this course would lead or were they just ignorant? If ignorant, we need to learn from this and never be so ignorant again. If they ignored this information, we need to learn that ignoring a loss will not keep it from happening. The course both followed either ignored the truth or was ignorant of this basic truth; you cannot spend more than you have coming in the door.
Even a lemonade stand operator knows that if you are paying more for products, services than you make as profit on sales the business will dissolve, you will be bankrupt and the lemonade stand will cease to exist.
Both GM and the UAW should have known this. Unfortunately, that is a philosophy starting to pervade America. Those who earn more should give it to those who earn less. As with the UAW contract demands, this current perversion has no limits for constraint to assure it does not exceed income from any source.
The Current Steps
We currently see political drumbeating promoting programs costing staggering sums of money. This question does not advocate a discussion of the right and wrong of the programs but a discussion of how it is paid. The same discussion should have been present in the UAW, GM contract meetings when discussing the demands of the union and the position of GM. Just as current discussions ignore this subject in meetings, the former discussions ignored the simple formula that if you want to continue to operate expenses cannot exceed income.
There are many proposals that continue to drain resources from a future America in excess of its ability to provide. One single expense that is also staggering proposes to provide benefits for illegal aliens as if they were legal US citizens. Like all proposals who pays for this?
The Mirror of Truth: Past, Present, and Future
Now it is time to place GM and the UAW in front of the Mirror of Truth to see if any truths arise from their history. History teaches us that events occur based on a series of steps leading to a result. We have discussed the events allowed to exist leading to the GM bankruptcy.
The US Congress should serve as Management for the shareholders of the US, its citizens. Their role is to assure we do not spend more than we have as income. The management of the country makes sure we meet current obligations of today and of tomorrow. Our Management must serve as check and balance against excessive spending.
Currently the Presidential Administration assumes the role of the UAW, putting forth contracts, and then negotiating terms to expand benefits for its members. The reasoning stated uses the same logic of the UAW in its contract negotiations with GM. “The people just want their fair share. It is only right to increase all the programs set forth to benefit the members regardless of the cost, regardless of the deficit hole it leaves the country for years in the future. It’s only right; it’s only fair that all share in the wealth of the country and that all are provided equal benefits.”
It is time to place Congress and the Administration in front of the Mirror of Truth to see if any truths arise from their acts and plans. The Mirror of Truth brings forth many items couched in verbiage reportedly for the good of the people, which really tend to solidify a political base.
What Made America Great?
Maybe we need to stop a moment and ask what made the United States the leading world power. Was it through handouts, by social programs that distributed wealth from the few to the many? Was it by attempt to promote mediocrity as the benchmark or norm for success? Was it instilling in all children that to excel over other children in school or in accomplishments is negative? Was it because we did not keep score in children’s games to remove an idea of losing? Was it when we felt that winning is bad?
One of the ironies found in children’s games where no score’s are kept so they will not feel bad if they lose is the children know the reality. They know they lost, they know by how much they lost and they feel like they lost. At least our children understand the importance of winning and knowing you won. They know that when they lose they feel bad and they do not want to feel that way again.
Maybe they practice harder, maybe they still lose but they are not letting it go as they will still try to win until some well meaning but clueless adult tells them don’t worry, it’s not so bad to lose. Oh yeah, it is bad to lose. We do not want loser children; we do not want a loser Country. We learn how to win, we learn how to lose in our games as children and we learn that to succeed you must try harder. It builds character, which builds the future of any country.
The Mirror of Truth Revisited
It is time to place all parties, GM and UAW and Congress and the President in front of the Mirror of Truth one more time. Maybe this time the lesson learned by GM and the UAW would inspire Congress to act as good Managers and the President not to repeat the history lesson of the UAW leadership in contributing to the bankruptcy of a company that once led the world in auto sales. No country or company is too large to escape the penalty resulting from intentional decisions that violate basic principles of money handling or social reform.