Taking Responsibility
This message says a lot about our need to stand up and be responsible.
This is one of the greatest responses to the requests for bailout money I have seen thus far.
As a supplier for the Big 3, this man received a letter from the President of GM North America requesting support for the bail out program. His response is well written, and has to make you proud of a local guy who tells it like it is.
According to Snopes (urban legend debunkers)This letter and Mr. Knox are real
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This is GM’s letter:
Dear Employees & Suppliers,
Congress and the current Administration will soon determine whether to provide immediate support to the domestic20auto industry to help it through one of the most difficult economic times in our nation’s history. Your elected officials must hear from all of us now on why this support is critical to our continuing the progress we began prior to the global financial crisis.
As an employee or supplier, you have a lot at stake and continue to be one of our most effective and passionate voices. I know GM can count on you to have your voice heard.
Thank you for your urgent action and ongoing support.
Troy Clarke
President,
General Motors North America
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Response from:
Gregory Knox, Pres.
Knox Machinery Company
Franklin, Ohio
Gentlemen:
In response to your request to contact legislators and ask for a bailout for the Big Three automakers please consider the following, and please pass my thoughts on to Troy Clarke, President of General Motors North America.
Politicians and Management of the Big 3 are both infected with the same entitlement mentality that has spread like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping this nation, awaiting our new “messiah,” Pres-elect Obama, to wave his magic wand and make all our problems go away, while at the same time allowing our once great nation to keep “living the dream.” Believe me folks, The dream is over!
This dream where we can ignore the consumer for years while management myopically focuses on its personal rewards packages at the same time that our factories have been filled with the worlds most overpaid, arrogant, ignorant and laziest entitlement minded “laborers” without paying the price for these atrocities. This dream where you still think the masses will line up to buy our products for ever and ever.
Don’t even think about telling me I’m wrong. Don’t accuse me of not knowing of what I speak. I have called on Ford, GM, Chrysler, TRW, Delphi, Kelsey Hayes, American Axle, and countless other automotive OEM’s throughout the Midwest, during the past 30 years and what I’ve seen over those years in these union shops can only be described as disgusting.
Troy Clarke, President of General Motors North America, states: “There is widespread sentiment throughout this country, and our government, and especially via the news media, that the current crisis is completely the result of bad management which it certainly is not.”
You’re right Mr. Clarke, it’s not JUST management. How about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass so they can come in on the weekend and make double and triple time for a job they easily could have done within their normal 40 hour work week. How about the line workers who threaten newbies with all kinds of scare tactics for putting out too many parts on a shift and for being too productive.
(We certainly must not expose those lazy bums who have been getting overpaid for decades for their horrific underproduction, must we?!?)
Do you folks really not know about this stuff?!? How about this great sentiment abridged from Mr. Clarke’s sad plea: “over the last few years we have closed the quality and efficiency gaps with our competitors.” What the hell has Detroit been doing for the last 40 years?!? Did we really JUST wake up to the gaps in quality and efficiency between us and them? The K car vs. the Accord? The Pinto vs. the Civic?!?
Do I need to go on? What a joke!
We are living through the inevitable outcome of the actions of the United States auto industry for decades. It’s time to pay for your sins, Detroit.
I attended an economic summit last week where brilliant economist, Alan Beaulieu, from the Institute of Trend Research , surprised the crowd when he said he would not have given the banks a penny of “bailout money.”
“Yes, he said, this would cause short term problems,” but despite what people like politicians and corporate magnates would have us believe, the sun would in fact rise the next day and the following very important thing would happen. Where there had been greedy and sloppy banks, new efficient ones would pop up. That is how a free marketsystem works. It does work if we would only let it work.”
But for some nondescript reason we are now deciding that the rest of the world is right and that capitalism doesn’t work – that we need the government to step in and “save us”. Save us my ass, Hell – we’re nationalizing and unfortunately too many of our once fine nation’s citizens don’t even have a clue that this is what is really happening.
But, they sure can tell you the stats on their favorite sports teams.
Yeah – THAT’S really important, isn’t it.
Does it ever occur to ANYONE that the “competition” has been producing vehicles, EXTREMELY PROFITABLY, for decades in this country? How can that be??? Let’s see. Fuel efficient. Listening to customers.Investing in the proper tooling and automation for the long haul.
Not being too complacent or arrogant to listen to Dr.. W Edwards Deming four decades ago when he taught that by adopting appropriate principles of management, organizations could increase quality and simultaneously reduce costs. Ever increased productivity through quality and intelligent planning. Treating vendors like strategic partners, rather than like “the enemy.” Efficient front and back offices. Non union environment.
Again, I could go on and on, but I really wouldn’t be telling anyone anything they really don’t already know down deep in their hearts.
I have six children, so I am not unfamiliar with the concept of wanting someone to bail you out of a mess that you have gotten yourself into – my children do this on a weekly, if not daily basis, as I did when I was their age. I do for them what my parents did for me (one of their greatest gifts, by the way) – I make them stand on their own two feet and accept the consequences of their actions and work through it.
Radical concept, huh. Am I there for them in the wings? Of course – but only until such time as they need to be fully on their own as adults.
I don’t want to oversimplify a complex situation, but there certainly are unmistakable parallels here between the proper role of parenting and government. Detroit and the United States need to pay for theirsins.
Bad news people – it’s coming whether we like it or not The newly elected Messiah really doesn’t have a magic wand big enough to “make it all go away.” I laughed as I heard Obama “reeling it back in” almost immediately after the final vote count was tallied. “We really might not do20it in a year or in four.” Where the Hell was that kind of talkwhen he was RUNNING for office.
Stop trying to put off the inevitable folks. That house in Florida really isn’t worth $750,000. People who jump across a border really don’t deserve free health care benefits. That job driving that forklift for the Big 3 really isn’t worth $85,000 a year. We really shouldn’t allow Wal-Mart to stock their shelves with products acquired from a country that unfairly manipulates their currency and has the most atrocious human rights infractions on the face of the globe. That couple whose combined income is less than $50,000 really shouldn’t be living in that $485,000 home.
Let the market correct itself folks – it will.. Yes it will be painful, but it’s gonna’ be painful either way, and the bright side of my proposal is that on the other side of it all, is a nation that appreciates what it has and doesn’t live beyond its means and gets back to basics and redevelops the patriotic work ethic that made it the greatest nation in the history of the world.
Sorry – don’t cut my head off, I’m just the messenger sharing with you the “bad news”. I hope you take it to heart.
Gregory J. Knox, President
Knox Machinery, Inc.
Franklin, Ohio 45005
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May 30th, 2009 at 8:56 am
Looking at all three posts this morning Barry, this one fairly sums it up.
I look here far away from Detroit, or New York, or the mess that is California, and I don’t think this mess will be over in 2010. Why do we expect a recovery early next year? This is the great global reset, and it will take time…lots of it.
If the population was living off the FIRE economy…what makes us think this will be re-established anytime soon? The only country the MSM is giving any props too over the last few months is China, and they are the anti-FIRE economy…it would seem to me that folks like us and the British will be in for the longest recovery times…
May 30th, 2009 at 10:34 am
I believe in the concept of “taking responsibility” as well, however Mr. Knox wrote a multitude of falsehoods in his diatribe. He uses dollar figures pulled out of thin air and rants about personal interactions with lazy union workers that may or may not be the result of UAW entitlement culture, which I am sure exists.
The UAW has long been blamed for unaffordable retiree benefits which were negotiated and agreed upon at the height of the Detroit automaker’s hubris. In a nutshell, Detroit automakers failed business 101 by failing to adapt to changing economic conditions, recently concentrating on SUV production to boost profits in the short term and, for decades, ignoring the developing competitive marketplace which resulted in a drastic reduction in market share.
A business failed and it is the union’s fault ? Wow. I thought businesses failed when they could not produce a profit- period. If you believe the latest meme, the lack of profit was all UAW’s fault. The UAW has routinely agreed to reductions in benefits, salary and changes in work rules for at least a decade. What has the management done in the same time period to assure profitability ? If 10% of an automobile’s price is worker’s salaries and benefits, what did the automaker’s do to reduce costs on the other 90%? I have no doubt that those negotiated contracts were too costly for the automaker to maintain a competitive footing, however there is never any acknowledgment that the UAW has made concessions year after year.
I have no doubt that the long-standing UAW rule in the auto industry produced a culture of entitlement workers, however what gets lost in the translation is the historical adversarial nature of the original American business model that has been challenged by the Japanese automaker’s partnership model of management. If you treat your vendors, workers, and customers as the enemy, or “those to be conquered” this is what it will breed. You “reap what you sow” and the American auto industry is now getting exactly what it grew. In this, Mr Knox was dead on.
May 30th, 2009 at 12:13 pm
[...] [Hat tip The Big Picture] [...]
May 30th, 2009 at 1:14 pm
Mr. Knox is guilty of lazy thinking. It’s a good diatribe, but better left to talk radio instead of the real world where people have to work.
Has he thought about the effect on the general economy to have 1+ million workers — union or not — suddenly losing their job by letting the car manufacturers take a dive? Does he know that TOYOTA is also now losing money as well and they’re one of the best examples of how to run a car company? Has he thought that maybe protectionism and forcing WalMart to purchase (and sell) higher-priced non-Chinese goods is somehow not exactly what the average person wants when they don’t have the money to afford much of anything right now?
Somehow I thought not. Anger doesn’t usually trigger smarter thinking.
May 30th, 2009 at 1:52 pm
Not sure he realizes what would have really happened had we left the markets to work things out on their own. The tsunami from the Lehman bankruptcy would have been a minor event compared to the domino effect of multiple bank failures. Many of his points are valid and are applicable to other unions like Railroads etc. Unions on to themselves are not bad for business however. UPS is the biggest teamster employer in the wold and they have done well by managing the unions. It was Jim Casey himself who said that UPS would not have been able to grow without the teamsters. They certainly got a kick in the ass when FedEx came on the scene but they adapted. They offered all unions people discounted stock purchase plan for example. The confrontational aspects of the union/management relationship is what needs to change.
May 30th, 2009 at 5:44 pm
“responsibility” is simply not part of the american cultural landscape. “scapegoating” certainly is, but that’s because it has a political utility that responsibility does not.
in fact, “responsibility” is often a code word for “scapegoating” in america’s adversarial politics. “who’s responsible?” is the mob cry for blood, and the politician’s pretext for political maneuvering and political advantage. the answer is always “somebody else! — not me! not us!”
“responsibility”, at its core, means acting with the best interests of *other people* in mind. it means sticking to facts, adult discussion, the long view, the hard choice, the courageous stand, the right thing to do, even (!) a significant amount of self sacrifice. americans simply don’t believe in any of those things except as symbolic choices in ritual situations.
“responsibility” is simply not part of the american cultural landscape.
May 30th, 2009 at 10:53 pm
ByteMe
You could write a check to each and everyone of the “workers” for their annual salary cheaper than go through this fiasco.
GM will not survive whether owned by the government or not. The business model does not work and it never will. It does not turn a profit.
Just another Ponzi scheme, do you remember Berney Madoff? A fraud is a fraud even if you call it by a different name.
May 31st, 2009 at 1:05 am
[...] Tags: $GM | No Comments This morning, the ordinarily coherent and insightful Barry Ritholtz featured a letter from $GM supplier Gregory Knox in reply to the $GM mother ship’s request for “support” and “urgent [...]
May 31st, 2009 at 8:57 pm
rch: the only part of the “fiasco” as you call it is why we gave them 6 extra months of running GM into the ground. That money was stooooopid money all the way around and was basically to delay handing off the problem from Bush to Obama and also to delay adding all those jobs to the unemployment lines until the stimulus package was passed.
Taking it over and funding it to sell back to private investors still has the chance to recoup much of the money spent going forward (just like the banks want to pay off their loans now, private investors will eventually want a car company that doesn’t have the huge debt overhang that GM had). But the money from the last six months is just gone.
Toyota made a profit before the latest recession; Honda did as well. They manufacture over here and their manufacturing is awesome and can be replicated. UPS uses the Teamsters and has no problem with them, so it’s not about union workers, but about the relationship between the unions and management.
I think the only real loser will be the industrial midwest, since many of the plants up there will never reopen.
Anyway, Knox is still full of misguided crap and his “messiah” comments just makes him sound like a sore McCain supporter.