With all of the national focus on the "Big 3" automakers and their insistence on a public bailout in order to keep their broken organization above water a few more days until they return to Washington to ask for even more money, and then repeat the process, this morning's news was a real head-scratcher.
GM has announced plans to trim their production of vehicles in the first quarter of 2009 by 250,000 units. While this sounds like an impressive number, it's just a 33% reduction from 750,000 to 500,000. Still, if cars aren't selling now, and the businesses can't meet their obligations, and they claim that they need public assistance (welfare) in order to survive, why did it take until today to reach this conclusion? Why continue to crank out cars that will just sit there?
In fact, maybe they need to suspend production altogether until they work through their inventory and figure out a way to be profitable again. They are temporarily closing 20 factories.
This impacts many people, but it also presents an unprecented economic opportunity for retooling, redirection, and new business formation.
In our small businesses, if our overhead was out-of-control, if our production was off, if we weren't making any sales, and our public image was suffering, would we continue with business as usual? I don't think so.
That's one of the beauties of free enterprise - you can adjust and adapt, gear up in the good times, tighten the belt in leaner times.
The Big 3 - if they are going to survive - need to get back to running businesses and forget about being institutions.
───
For more information on my coaching and educational programs and services, sales tips, insights, or strategies, visit my website stevehoffacker.com or my other blog homesalesinsights.com. © Steve Hoffacker, 2008. All Rights Reserved.
