Reviewing a Corporation's Mission - Automakers need to bail

THEMSELVES out first!

FACT: U.S. Auto Sales fell 41% from last year. Take your vehicle, rip it into two pieces,  throw the other
piece away and you will have almost the same effect.
Except in this case, the corporations will not only be dealing with cars, but the government, the taxpayers
money, people’s careers and the existence of their organization which is losing billions,
yes $1000000000’s.

The American automaker’s strategy shouldn’t be “I hope consumer’s get more money with President
Obama’s plan so they can buy our cars”.

The question they need to ask is  “What does the customer want from our vehicles?”

Ponder This:

“Chrysler is under pressure to boost sales to make its case for more bailout loans from the U.S. government, and in February it cut

prices on many vehicles to below even those it normally offers its own employees.

In March, the company will extend the incentives and offer its Hemi V8 engine in Dodge Ram pickup trucks at no additional cost, a

value of up to $2,000, according to dealers briefed on the offer. Its Chrysler 300C sedan will be available with discounts of $3,000 —

$500 more than in February, the dealers said.”

- From Wall Street Journal – March 3rd, 2009

Here’s what Chrysler believes in realistic terms.

You the consumer think “Hey, let’s go buy a Dodge Ram for the family, we’re in a recession and need to
conserve money…but they’re offering a free upgrade to the HEMI powerhouse engine, that would be
awesome in eating up more of our gas money!” And then you go buy the Dodge RAM pickup for the typical
American city or town, because you need one with all the moving you need to do because the housing
market is booming in the United States.

Brilliant strategy. Not only is it a completely ineffective long term one (what is Chrysler’s plan when the
economy goes back up, congratulate their supporters by charging more for their vehicles? Nice job.) but it
is a terrible short term strategy.

Ponder Again:

By selling cars at discounts "they’re trying to show Congress they’re still a viable business," said Jesse Toprak, executive director of

industry analysis at Edmunds.com. "But you’ve got to do the math to see if it’s worth it."

- From Wall Street Journal – March 3rd, 2009 1

Selling products at discounts without a way to counter-balance the loss of profit is not a viable
business. Ever.

Jorrian.com – Central Hub for Management Knowledge | Jorrian Gelink

Here are three starting steps to get back on the “road to recovery”
1. What is our business and what should it be? A few years ago, it was
“Build or Acquire Everything under the Sun to gain Market Share”. General Motors
thought that was a fantastic idea, now they are pulling away from their Saturn, Pontiac,
Saab and Hummer brands. Does the consumer really need so many “brands” on the
road right now? “Making it easy to buy a vehicle” is a mission statement that would
point EVERYONE in a better direction.
2. Who is our customer? There are two types of customers, the primary
customer (American consumer) and the supporting customers (vendors, dealers, staff).
Is the American government the American Automaker’s customer? Right now it needs
to be until Ford, GM and Chrysler can get back on track.
3. What does the customer value? Profit only comes from an outside
source that sees value in the product or service you are providing. If a consumer wants
to purchase a fuel-efficient vehicle, lowering the price of the Chrysler 300 and power
horse trucks may be what YOU want to do, but not what the consumer wants, or even
cares about. Get feedback from the majority of your customers and build a vehicle
for them based on their feedback.

Corporate business is not the roulette table or the slot machine, it is effective systematic processes which
lead into results. Pulling the handle hoping to get more money from a bailout is not a business
strategy.

 What is out business and what should it be?

 Who is our customer?
 What does the customer value?

All steps to point the compass in the right direction.

Jorrian Gelink
Management Architect
http://www.jorrian.com

Jorrian.com – Central Hub for Management Knowledge | Jorrian Gelink