I do not support the mentality of a free-for-all “bailout” as has been so commonly sought these days. This comes down to the old “if you give a man a fish, you feed him for a day” mentality. Whether a loan is appropriate, I do not know. I wish I had the right information and know-how to form a fact-based opinion on this. Maybe I am not that smart, and maybe it is above my pay scale. Read on and I will give you some opinion and insight to my opinion. Don’t get me wrong. I struggle right along witht the best of them. I lost millions of dollars in 2008.
I learned a long time ago that I have been able to perform much better with the understanding that when I fail to achieve my requirement of sustaining an income, there is nobody around to save me. I believe this to be among the most valuable business lessons I ever learned.
In my youth, I had parents with some money. They could have bailed me out and made life a lot easier for me on many occasions. I think this was in the back of my mind for a while as I grew my first couple companies. I never let those thoughts take over, but when I was 17 years old and off on my own and running a marketing company along with three to four jobs to support it, I suppose it was easier to think that if I failed, there would always be a warm bed and something to eat back at Mom and Dad’s place.
I have failed like GM, only worse. I remember some really hard times when I was all alone with nothing in the cupboard. I am not here to pluck your heart strings, so I will not get too far into the details, but I will say that there were times when I lost a lot of weight without trying.
I was not lucky, and I did not have huge windfalls. I took on as many as five jobs at a time and I developed my product better. This is the part that GM neglected. Jimmy Carter begged for cutting dependency on overseas oil 30 years ago, but GM had enough money back then to ignore the market. Over the following decades, there have been many indications of GM weakness, but they did not hear the call. It is not just about gasoline … it is about many other business and marketing strategies that have hurt them. They made a bed over decades, and allowed ignorance and arrogance lead them.
I believe that it is time for GM to do what I did in the face of catastrophic failure … work harder and work smarter. If their plans and ideas have failed, there is a reason.
As I write this, I would like to note that just in the past three years I have purchased two Hummer H2, three Corvettes, and one Escalade for a total of about $325,000. This makes the contents of my garage predominently GM in origin. I am certain some of you readers have sent some dollars their way, too. Yes, I am a fan of GM products, but what did they do with all of that money?
Author Mark Murnahan is the Chairman and CEO of YourNew.com, Inc. and provides SEO consulting services to companies and non-profit organizations. Mark Murnahan may be reached toll free at 866-A-Web-Guy (866-293-2489) for consultation.
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Hey Mark…
You’re right on. The bottom line is the car industry in this country cannot compete with foreign vehicle makers. Detroit can make big cars and trucks really well (like your Escalade and H2 and my husband’s F150), but we cannot make a small car and survive. In other words, the UAW has created a monster that cannot afford to pay its workers to make the vehicle that the consumer wants. So, we buy from Japan and Korea. Handouts from Bush and Obama aren’t going to help…they will line a CEO’s pockets, but they’ll be back in a few months begging for cash. Unless the union mentality in this country goes the way of the Dodo, we are screwed.
Have a good day!!
~Stephanie
Comment by Stephanie — December 17, 2008 @ 8:28 am
“I shall do less whenever I shall believe what I am doing hurts the cause and I shall do more whenever I shall believe doing more will help the cause. I shall try to correct errors when shown to be errors and I shall adopt new views so fast as they shall appear to be true views.”
Abraham Lincoln
Last week I stopped for some lunch at a nearby restaurant and there were a group of current auto works from GM asking people as they pass by to support the bail out and apply pressure to your local congress and senate members. My answer now is the same as it was then “sorry I can’t help you” and I went on to explain my reasoning to them. See, I believe that there is more to be gained from failure and mistakes than from success and in this case anything that is given to the big three in a bail out will only skew that process and create a longer learning curve. So by not supporting the bailout I believe I am actually doing them a favor by forcing there companies to work harder, be more creative and hopefully position themselves as leaders once again in the industry or not. That’s business!
Mark, great blog! Your views and comments have great merit and some real life lessons.
Comment by Troy — December 17, 2008 @ 5:09 pm
Is free enterprise dead? If a small business owner runs a business into the ground the government does not bail him out. Principals are principals. Our government was designed that individuals could have a voice and that it would not be because they had deep pockets. Corruption starts when influence shifts from average people to rich special interests.
There will be no reward for a well run company, paid off mortgage, and paying off credit cards. We have climbed to the top of the slide hang on its all down hill from here.
Look at Southwest vs any legacy carrier. Good business plan good service. Good company. The Government should have let the other bigger airlines go out of business and let the better models take their place. One company loses the general public wins, with a better replacement.
Comment by acesjet — December 18, 2008 @ 2:21 am
Mark, I have read your comments…. I agree with you in principal, but I also look historically at the bail out of Chrysler years ago… the government made a fare sum of money in interest paid by them for the loans that were issued in their behalf. The auto industry represents a huge sector of the national ecomomy…. letting it fail will have reprecussions that tricle down to everyone… my mind says let them fail, but us little fish will fall do to the ripple effect their failure will have on the national economy.
Comment by jarend — December 18, 2008 @ 9:10 am
Mark, Since when did American capitalism and/or the American dream include a “too big to fail” clause? Why do the American taxpayers have to bail out banks and corps who made stupid decisions at the cost of the financial stability of those who didn’t? I applaud your candor in recounting some of the same early struggles many of us have lived through and learned from. You are a stronger person today and Maggie, Simon, and Mattie are the better for it.
Comment by Coneydog — January 5, 2009 @ 4:12 pm
Correction: Peggy.
Comment by Coneydog — January 5, 2009 @ 4:15 pm