Why Do They Hate Us?

Not a post about OBL but a word to the boardrooms of America. The general public consensus regarding the health (or lack there-of) of various corporations so far has been a resounding "let 'em fail." The public's ire is not just confined to the auto industry but a broad range of retailers in general. This should be doubly worrying to the captains of industry who should be asking themselves, why do our customers hate us so much? Sites such as the Consumerist are full of first hand horror stories from the full range of businesses.

Of course there are the standout corporations, the one's that customers do love and would fight to protect (and are the subject of endless books on branding) but they are a tiny minority in a sea of blah. For the others, it seems as if years of treating churn as business as usual is finally coming back to haunt them. Their list of crimes is long but outsourcing technical support, byzantine rules and policies and products that fail to deliver the marketer's promises rate high on the list. The American consumer is completely fed up with their treatment at the hands of these operations which does not bode well for those looking for a bailout to continue in business. The list of teetering companies is long, nevertheless you do not see groups campaigning to keep Gap, Circuit City or Linens n' Things alive. Quite the reverse seems to be true, customers are almost reveling in these corporate failures in a kind of "well they finally got theirs" way.

Although the symptoms are myriad, I think the public perception of a company can be directly traced to the way that company treats their own employees. Outsourcing, benefit cuts and endless rounds of layoffs have all contributed to create soulless organizations whose bottom line may look good on paper but is no stronger than the paper itself. Conversely, companies that are known for their fair treatment of workers are seeming to be able to hold on much better when the times get tough. Perhaps decisions made with the human factor in mind turn out to be better long term strategies. Or maybe it's just Karma?

Thanksgiving with...Yorkshire Pud?

One of the best things about living in a multi-cultural country is the opportunity to mix favorites from many traditions. Thanksgiving's my favorite holiday and I enjoy my turkey with both candied yams and Yorkshire pudding. This British staple seems to fascinate Americans and is incredibly easy to make. So for those who would like to try some at the table this month the Guardian has posted a recipe from the austere crowd at the Royal Society of Chemistry. Now just imagine dropping that into the conversation mid-meal! A dish with a Royal Warrant no less.

One caveat; the Guardian's picture shows pompous little "restuarant" puddings, but as any fule kno, the best ones are exactly as pictured above, in a roasting pan happily cooking alongside the meat and absorbing all the good stuff floating around in the oven.

As they would say in Yorkshire, "aye, that looks grand pet,"

Branding

Today KERA's consistently excellent Think! featured Y&R Chief Insights Officer John Gerzema discussing the "brand bubble" (downloadable mp3 is here). He believes that many renowned brands are over valued in the eyes of the consumer and a brand crash is looming. This seems especially pertinent as cash wary consumers start to truly question the elevated cost associated with a name brand versus a generic.

He also briefly touches on the folly of marketing to a demographic rather than an interest group, citing the case of advertising directed at seniors falling into a trap of assumptions. Be sure to check out his Brand Asset Valuator.

Neil Young - Truth or Cover Up?

Citing an unwillingness to cross IATSE picket lines, Neil Young canceled his show at the Los Angeles Forum, October 30th. Insiders are now asking if the less than stellar 6,000 tickets sold (The Forum seats 17,000) had more to do with the decision?

Bailout? Schmailout!

The mortgage bailout programs being touted by both the public & private sectors are all fine in theory but miss the point in one huge way.

So many of the homes currently under threat of foreclosure were bought by speculators looking to either flip the home or sell out and profit in a year or two. They, and even people who bought a place to call home, can not be expected to have much interest in deals that give them 40 years of low interest to pay for a home that's worth a fraction of it's original value. In areas like California, Florida and Las Vegas most would have to wait decades to see their value return. Even with affordable payments I believe most will do the math and walk away at their earliest opportunity.

Stop The Madness

Recent news has shown that once again, the American people are right & our elected representatives are wrong. The multi-trillion dollar bailout of our financial system has done nothing to alleviate or correct the underlying problems facing our economy & now the financial institutions are calling out for further cash injections. All the while they are using taxpayer's money with little or no transparency or accountability.

Next on the table is a bailout for the US auto industry. What next? Surely the airlines deserve some relief? What about the credit card companies, hotel chains and home builders? The list is endless. During the good years many US companies grew lazy. They built high risk accounting schemes, signed unworkable labor agreements, produced substandard products & paid their executives fat bonuses. These times are gone & it is not the job of the US taxpayer to wipe their noses, pat their bottoms & send them back out to play again.

The auto industry does not have the management structure or R&D pipeline to make our investment sensible. They are years away from producing the type of vehicles already available from Asian plants. They ignored long term trends in the energy markets for short term, easy credit fueled profits. I see no reason why they would be able to compete any more effectively with our money than without.

Update : Apparently CBS agrees with me.

Obama flickr Set

The Obama campaign has uploaded a complete flickr set from Chicago. The photos are brutally honest and capture the evening beautifully from the dour backstage rooms to the triumphant stage call. The comments make interesting reading too as so many congratulations pour in from around the world.

Worth Saving?

The news for the US automakers gets worse and worse. Sales dropped 30% in October and with the continuing crisis on Wall Street, lack of consumer credit, lots full of unwanted vehicles and an approaching tsunami of default auto loans, things don't look like they're getting better anytime soon.

Detroit is continuing to lobby Washington for bailout cash and although President-Elect Obama has offered assistance for the development of fuel efficient vehicles, those funds may be too late to save the industry today. So is it time to give up on the US Big 3 Automakers? Painful as that sounds it may be the best path since, even with large cash injections, Detroit cannot exist in it's current form. A glut of dealers, products no one wants to buy, bad loans and hugely complex and restrictive labor practices are not going to be fixed cheaply or fast and the clock is running out. Both publicly traded brands are currently worth less than their physical infrastructure.

I can envisage a scenario where Tata Motors (Mkt Cap: 81.52B) buys Ford (Mkt Cap: 4.73B) but a combined GM (Mkt Cap: 3.15B) and Chrysler looks to be best left on the curb to be picked over by the parts pullers.

The Bifecta Pt. 2 - Check

In the late 1980s I was working at a studio located in a federal building originally constructed in the early 1960s. My wife (then girlfriend ) was visiting the US for the first time and accompanied me to work one day. She noticed the two identical water fountains side by side outside the bathrooms and commented on the needless redundancy of such a design.

To quote the Grateful Dead once again, "what a long strange trip it's been."

The Bifecta Part One - Check

After a race which nearly required use of the defibrillator paddles on your truly, Lewis Hamilton was crowned Formula One World Champion. After 18 Grands Prix it all came down to the last corner of the last lap of the last race. If a Hollywood script writer had written this he'd have been laughed out of town, proof again that truth is stranger than fiction. Anyway this post is a reference to my June writings.

Read the full race report here. Hope for the Bifecta Part 2 at around 11pm EST tonight.

Not Election, Not Economy!

National Geographic have just released their Best Wild Animal Photographs of 2008 and they are stunning.

1st Horseman Arrives?

Spotted in East Plano. You know you're a redneck over-leveraged when you're selling your $200K Bentley Continental with a piece of day-glo card & a sharpie in a store parking lot.