Saturday, May 30, 2009
Friday, May 29, 2009
Wednesday, May 27, 2009
Saturday, May 23, 2009
Friday, May 22, 2009
I will give you a moment to scream and yell...
Tuesday, May 19, 2009
It seems every major company is crying for help now. And all claiming the death of them will be the death of our economy. I am going to call bullshit.
I get it, there is all this government money going around, you are bleeding money, and it is a lot easier to be handed bags of cash rather then solve your own problem. I want to avoid the rather trivial argument, is it more or less American to help these companies.
Instead, let us assume there is no stimulus at all, Uncle Sam is going to be our non-biased third-party observer. So, with none of this money being pumped into the system, where would we be? There would be fewer companies now, and the big ones would be bigger. Not drastically different from where we are now, the government shot of anabolic money isn't supposed to come to fruition for a while.
OK, so we have big companies that shrank, and big companies that got bigger from buying up all these dying ones at post-Thanksgiving sale prices. Eventually the big ones will sell off these new buys at a higher price after the economy balanced itself, or the government would step in and do it when they got to monopoly level.
How do these dying giants save themselves though? I am going to look at newspapers and automobile industry because I am most familiar with those two.
The one industry that is not crashing horribly, and is even prospering despite everything, is digital media. Obviously automobiles cannot go digital... yet. So I will come back to them later, let's look at newspapers.
Newspapers have been trying to succeed online for a while now. They just cannot get the sort of success they need to live though. There is hope though, New York Times made over $30 million in online revenue last quarter, which has been dropping along with all their revenue. A drop in the bucket for them, but shows there is money out there.
The Chicago Tribune is making a good first, new, move into online media. It is late, but better late then never right? Chicago Now is their concept. A Chicago based blogging community, with a goal of 80 bloggers at the end of 2009. Some big names like Steve Dahl are already involved. The site is all developed by the Trib and allows for some community interaction. The Trib wants to keep this theirs though, as I found out from a few sources. They won't let everyone blog, so the community will be forced to turn other places to have a voice.
Here is the problem with newspapers. They never learned how to share growing up.
Cory Doctorow in a piece I reference far too much, “Why I Copyfight”, said, “culture's imperative is to share information: culture is shared information.” Well this is an obvious issue when it comes to those that supply information are having trouble sharing.
There is hardly a person that does not share something online now. I get emails from my father everyday sharing something that someone else shared with him. We love to share and talk and it has made culture successful.
Google has done an amazing job sharing. They just call it open sourcing. Everything isn't given away though, to the point Google fights regularly with keeping their search algorithms very secret. Because through those, is how they make money with their advertisements. Their cell phone operating system, Google maps and Chrome, are all free and open to toy with. These are services that have created community based on their one money producing service.
So back to Chicago Now. The cash flow will come from the content created by their 80 or so bloggers and from their community of readers. So why not let everyone write. Out of their massive target audience they claim as their goal (which includes pulling traffic from Google which is just stupid) there has to be one blogger that has talent and can make them some money.
Newspapers can open source a lot, while keeping their hard news gathering and reporting private, so that they can still tell advertisers to pay them money. All this really takes for them is getting around the idea that community and interaction is good.
So, open sourcing can save a company Jonathan? Maybe, but doing what is going on now sure as hell isn't working. How does an automobile company open source though?
Well, this is where my theory crafting finally comes into play. Open source means, simply, that you share what you create freely. Well, automobile companies make money by creating a car that is unique compared to everything else out there. But when I see a car advertised there are four things that always stand out. The cost, miles per gallon, safety rating and how the car looks. There is a hell of a lot more that goes into a car, but I really don't care.
So, what makes a car company money are the top selling cars and the more expensive ones are really what separate one company from the next. So, American car companies that are getting stomped on by foreign competitors, share! Volkswagen is about to bring their 60 MPG diesel powered Jetta to the U.S. Ford, Chrysler, GM, you guys really think your shitty 30 MPG cars will hold up to that because you have nine cup-holders?
If the American car companies worked together to develop new engines, structures, breaks, and everything else that goes into making a car work that 90 percent of the population knows nothing about I predict they could beat out foreign competitors. Then each company goes back and designs their own cars around the new tech that was created. And when the super bowl commercials roll around, there will be 10 unique looking and sounding cars sold that were created because the dying giants teamed up to overcome their own short-comings.
I know I am not an expert. But I am an observer, and trained to watch, digest and think. This just seems like common sense to me. Your business model sucks, so look at one that isn't sucking and is newer. And steal from them.
Over at BigBadToyStore.com a brand-spanking new flash drive has popped up for pre-order. Yea, I know, new USB drives are a dime a dozen. And each one is just some pretty, or ugly, skin on a $2 one you get at Costco.
Friday, May 8, 2009
Wednesday, May 6, 2009
Hat Tip: YAL
Friday, May 1, 2009
Company Creditors (Including the US Government) - 10%
Fiat - 35%
United Auto Workers - 55%
In agreeing to this situation, the UAW would be making a few concessions that seem to make sense. According to the Wall Street Journal
Among the cost-cutting measures that the UAW leaders have accepted are a suspension of cost-of-living-adjustments and new limits on overtime pay. Workers will only be paid for overtime after they have worked at least 40 hours in a week. Chrysler workers will also lose their Easter Monday holiday in 2010 and 2011, according to the union summary.I think this gives us a pretty good insight into the overreaching that the union had been doing in terms of employee benefits. I'm fairly sure the actual definition of overtime is that point at which one exceeds 40 hours worked in a week. This makes me wonder just what the "overtime" structure had been all this time, not to mention just what other little goodies the UAW had leveraged out of the Big Three over the years, that has ultimately brought these once shining beacons of success to their knees.
The ownership in Chrysler has been referred to by many as Obama's payback to the UAW for the massive amount of support he received from them during the election. This would seem to fit with Obama's general stance on worker's rights and his overall anti-corporate attitude. On the surface this looks like a monstrous payback to the unions. But is it really?
Fearing a complete loss of their agreement altogether should Chrysler go to bankruptcy court, and a judge throw the agreement out, the UAW agreed to the aforementioned ownership structure. Ron Gettelfinger, and others before him, have lived out a mission to extract higher pay and greater benefits from these three companies each time a new labor agreement came around. The UAW under Gettelfinger has been particularly anti-corporate in its message, critical of companies for "the corporate global chase for the lowest wage which creates a race to the bottom that no workers, in any country, can win." This kind of fantasy statement may have been a great motivator for garnering support while things were sunshine and roses in the economy, but now this is no longer the case.
The UAW is now a potential owner in Chrysler, and has given up a great deal in its labor agreement with Chrysler to attain that role. As a matter of simple economics, this necessarily means that its other labor agreements with Ford and GM will be substantially weakened as well when renegotiation time rolls around with them. The ownership in Chrysler also necessarily removes one of the UAW's bargaining chips. No longer can the UAW use a good agreement from Chrysler to leverage one just a tad better out of Ford or GM. In the marketplace, any agreement the UAW now makes with Chrysler is essentially meaningless, since they will have shaken hands with themselves.
The general loss of leverage and subsequent loss of political and coercive power seems to me a major blow to the UAW. And I'm not the only one who thinks so. From the previously linked WSJ article:
"This is the eclipse of the UAW. It's going to be a shadow of what it once was, I'm afraid," predicted Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass., who was interviewed prior to the disclosure of all details.
"This will make it more difficult to do the things that the union is known for: organizing, political action, bargaining and community development," said John Russo of the Center for Working-Class Studies at Youngstown University
In short, the mission now needs to change for the UAW. Ironically, it is now the UAW's job to become an evil, greedy corporation, searching for an ever lower wage. In order to maintain its own existence, the UAW is now required to generate a company level profit. It must now make decisions as an owner responsible for both its employees, and the health and welfare of the company, but always putting the company first, for without the company, there can be no employees.
The question is now, after a long history of extorting the Big Three, playing one contract agreement off another off another to generate ever higher payouts for ever lessening production, will the UAW be able to do it? Will an organization that has always fought ownership, be able to act as a responsible owner? If they can, then Obama's arrangement of this situation will indeed have been a gift in payback. If the UAW continues to be the UAW, however, history will look back on this as Obama's deathblow to the UAW.
Of course, all of this is to say that Chrysler is able to emerge from its bankruptcy reorganization, rather than, as seems possible, filing for Chapter 7 and going under altogether.