Pygmies of Industry

It was almost painful watching the CEOs of the big three automakers testify before Congress. These former titans of industry unconvincingly blamed the crisis in the financial markets for their imminent collapse, a reverse Deus ex Machina that is undoing years and years of thoughtful, forward-thinking corporate leadership. Hold on to that thought next time you see a Hummer. They produced no plan for turning their industry around on its own terms and, even more galling, no real sense of how a different future for their companies might lead to a different future for the country, warranting such a large infusion of taxpayer cash.

The carmakers are not alone. Last month it was the testimony of the former head of Lehman Brothers who made the nation wonder what was going on in Business Schools if this was the best they could produce. Of course, our President touted his being the first candidate for chief magistrate to hold an MBA the value of which was demonstrated in the days and weeks after Hurricane Katrina.

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How did these pygmies come to their high stations in our society? The short answer is that our culture was not doing its work. The "laws of the market" became false gods that we were called to worship. If you questioned whether the economy reflected even minimal standards of social justice you were told there was no arguing with the laws of the market. It is no secret that the business model in place for the past twenty years has been to throw workers under the bus as fast as possible while increasing the pay of CEOs and their ilk.

We captured a glimpse of this corporate culture on MSNBC’s "Hardball" the other day. Republican Congressman Phil Gingrey unintentionally showed the vacuity of America’s corporate elite. He was arguing against government interference in large companies and asked whom we should trust to come up with a good business plan, either the government or the best corporate consultants? This is the other part of being a CEO in America: You have to be able to hire the best consultants possible. In the old days, being a CEO meant that you knew how to re-tool your industry, that you did not need to find someone outside your shop to tell you how to run your shop. Not anymore. Now, retired CEOs become consultants and they get hired by other CEOs who aspire to becoming consultants. All of them make lots and lots of money and issue reports that find nifty ways to state the obvious, in this instance: Detroit, please start building cars people want to buy. As for Mr. Gingrey’s question, I will take my chances with someone in the government thank you very much.

In the end, some kind of government support for the auto industry will be forthcoming. The workers themselves deserve not to see their pensions go down the tubes because they worked for a company with CEOs that did not think it would send a bad impression if they flew on the corporate jet to Washington for their mendicant routine. But, a condition of the bailout should be the heads of the CEOs and the future of industry must be to find CEOs who do not need consultants to tell them how to run their business, nor private jets to fly them to Washington, nor corporate retreats to pat themselves on the back. If average Americans are cutting back, and we are, it is time for the corporate culture to change and to change drastically.

 

 

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10 years 1 month ago
>> [consultants] state the obvious, in this instance: Detroit please start building cars people want to buy. << But, the cars people want to buy are called SUVs, or pickups. The advice will not help.
10 years 1 month ago
Might part of the problem be that the CEO of GM is the same person as the Chairman of the Board? i.e., the fox guarding the hen-house. For explanation see THE MIKADO.

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