Anyone who’s been to a Department of Motor Vehicles office knows that bureaucracy has the power to suck the momentum, life force, and money out of any individual, family, or business.
Yet, we may be entering a time when government influence can potentially speed up innovation and progress.
Our country’s car companies are asking to be bailed out. Some argue that we should simply allocate money and give it to these critically wounded companies.
But some economists argue that bankruptcy will be good for the industry, forcing the companies to reorganize and restructure their debt, and reworking their antequated product line and dealership systems.
Sounds like progress—unless you’re a union member, one of the remaining autoworkers whose job wasn’t exported to Mexico or elsewhere; or a former employee with benefits still in effect.
But what if we got some sort of equity in the company in exchange for the bailout? No, we wouldn’t have to nationalize the industry—but we would be treated as an important member of the board.
If Warren Buffett owned 20% of your company’s stock, that wouldn’t make him a majority stockholder, but that’s a lot of voting shares. If you were planning a major move, you’d be checking in with Warren before making them.
If, for the time being, the federal government had a boardroom seat at the “Big 3” car makers, sure, there’d be cries of “socialism.” But these companies would be quicker to respond to the human and technological demands of our time.
For over fifty years, Ford, GM and Chrysler have repeated the same cyclical dance with the government:
1. The government sets a new standard, like higher gas mileage, seat belts or air bags, then sets a date, five ten or fifteen years in the future, when the new models must comply.
Yet, we may be entering a time when government influence can potentially speed up innovation and progress.
Our country’s car companies are asking to be bailed out. Some argue that we should simply allocate money and give it to these critically wounded companies.
But some economists argue that bankruptcy will be good for the industry, forcing the companies to reorganize and restructure their debt, and reworking their antequated product line and dealership systems.
Sounds like progress—unless you’re a union member, one of the remaining autoworkers whose job wasn’t exported to Mexico or elsewhere; or a former employee with benefits still in effect.
But what if we got some sort of equity in the company in exchange for the bailout? No, we wouldn’t have to nationalize the industry—but we would be treated as an important member of the board.
If Warren Buffett owned 20% of your company’s stock, that wouldn’t make him a majority stockholder, but that’s a lot of voting shares. If you were planning a major move, you’d be checking in with Warren before making them.
If, for the time being, the federal government had a boardroom seat at the “Big 3” car makers, sure, there’d be cries of “socialism.” But these companies would be quicker to respond to the human and technological demands of our time.
For over fifty years, Ford, GM and Chrysler have repeated the same cyclical dance with the government:
1. The government sets a new standard, like higher gas mileage, seat belts or air bags, then sets a date, five ten or fifteen years in the future, when the new models must comply.
2. The car companies announce that the new regulation will make it impossible for them to stay in business.
3. There are hearings, court battles, and intense lobbying efforts, sometimes involving suddenly massive campaign contributions. Perhaps timelines are adjusted, or slightly easier-to-meet standards are set.
4. Eventually, the car companies end up complying.
5. Back to step 1, with another innovation that the industry will fight tooth and nail.
Every step of the way, America’s automakers have fought every possible innovation, until it was forced on them.
But, suppose a prominent member of the board of directors was pushing for higher fuel economy, and more alternative technology? Wouldn’t that make the industry more responsive to innovation? Wouldn’t the process be less cumbersome?
This way, it becomes a partnership. That way, GM, Ford and Chrysler have a strong incentive to move forward, and Americans have a strong incentive to demand better cars, and then to buy them.
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