So Much for Plan “B”

Another day over and another day closer to once mighty General Motors® declaring bankruptcy. All the king’s horses and all the king’s men, along with billions of our bailout dollars, can't seem to put GM® together again.

 

In 1953, at the peak of its dominance, GM president, Charles Wilson, declared before Congress that “what was good for the country was good for GM”. By contrast it’s not a stretch to say what’s bad for GM is bad for the country.

 

Uh-oh.

 

Bankruptcy could come as soon as June 1. Maybe earlier. Maybe tomorrow.

 

So what you say? In a GM bankruptcy everyone feels the economic pinch. A federal agency, the Pension Benefit Guarantee Corporation, will take over responsibility for the pension money.  $16.5 Billion. Retired employees could end up with far less than what they’re owed. Perhaps pennies on the dollar.

 

Denver auto dealer, John Medved, told me that the average life expectancy was around 75 when those agreements were struck years ago. It’s well beyond that age now. Those retired autoworkers are living longer, and we’ll be paying even longer.

 

A bankruptcy doesn’t last a few weeks. It’s anything but neat and tidy. It doesn’t create jobs. It’s quite the opposite.

 

Dealers, to their credit, are trying everything they can to survive. The government is offering to guarantee your warranty. Wow.

 

Have you bought a new car yet? Didn’t think so.

 

Plan “B”, aka bailouts, isn’t working.

 

My idea still stands. A $10,000 tax credit when you buy a new car. Car dealers need to sell cars. This sort of incentive will get people back to showrooms. Buy today, claim that $10,000 tax credit when you file next year. John Medved told me straight out that it will work. He’s listening. The government isn’t.

 

Meanwhile, GM, in business for 101 years, is heading toward bankruptcy.

 

This helps the economy how? It’s a question I keep asking the government. So far, they have no answer; their hands remain firmly over their ears.

 

It’s not too late. This doesn’t have to happen.

 

John

John W. Scherer

John Scherer is CEO & Founder of Video Professor, Inc.

You can reach him at ceo@videoprofessor.com.

It's too late for this year; let’s focus on 2010.

Another tax day has come and gone. Regardless of whether you paid in, or got a refund, ask yourself this question:

 

“How would my taxes have been different if I received a $10,000 tax credit for buying a new American car?”

 

Then, call or e-mail your elected representatives and ask them why, despite the billions of dollars sent to Detroit, companies like GM are seriously considering bankruptcy. Why are we junking more cars than buying new ones? Why are car sales half of what they were just two years ago?

 

For my regular readers, you know the tax incentive plan is something I continue to believe in. I also realize that change, especially when it comes to the government, moves at a glacial pace. It’s like jogging through peanut butter.

 

The plan is simple: Buy a new American-built car and receive a $10,000 tax credit when you file your taxes next year.

 

You, as a taxpayer, would finally get a break, people would start buying cars, jobs would be created and the domestic automobile industry would get back to being a thriving business rather than a welfare case.

 

The idea, as I said, is SLOWLY catching on. I was honored to be a keynote speaker at this year’s Colorado Auto Summit where it was agreed that my plan would get customers buying again.

 

You can watch excerpts by clicking here for Part 1 and here for Part 2.

 

The Detroit Free Press, The Denver Business Journal, CNN Money, KUSA-TV, KCNC-TV, KMGH-TV, FOX 31, WB2 in Denver, KPHO-TV in Phoenix and WJBK-TV in Detroit have all done stories about my idea.

 

More importantly, no one has come up with an argument for why it won’t work.

 

More and more people are listening. Look for me on more media outlets and Op-Eds in the future. Sadly, just one entity isn’t listening: our government.

 

You’re expected to pay for the solution, but not benefit from it. That is simply not fair.

 

Join me in this fight for what’s right.

 

-John

John W. Scherer

John is CEO & Founder of Video Professor, Inc.

You can reach him at ceo@videoprofessor.com.

Jay Cutler: Lessons learned and not learned.

Jay Cutler is now a Chicago Bear.

So, how does this pass the “So what?” test beyond wins and losses and the whole “football thing.”

The answer is pretty simple. Yes, football is a game. But it’s also big business.

Broncos’ owner Pat Bowlen, is the guy who signs the checks. It’s an easy system. You always listen to the guy who signs the checks.

New coach, Josh McDaniels, does. When Pat Bowlen calls him, McDaniels answers. In return, he gets a paycheck. Bowlen is also smart enough to listen to his coach.

Mr. Bowlen made several calls to Jay Cutler. Cutler ignored them. If Cutler had returned the calls, Bowlen would have listened to him as well.

It’s called communication. But it takes two to communicate.

You can’t run an organization when the employee ignores the employer. When discipline breaks down, the organization fails. Always.

Pat Bowlen is the successful owner of one of football’s most respected franchises. Jay Cutler remains petulant to the point that he felt he didn’t need to respect the organization that paid him a multi-million dollar salary, and despite a 17-20 record as a starter, was still willing to believe in him.

The boss called. The employee didn’t answer.

Pat Bowlen needed to make a point. He did. Good for him.

-John
John W. Scherer
John is CEO & Founder of Video Professor, Inc.
You can reach him at ceo@videoprofessor.com.

Government is wasting its most precious resource. Ideas.

I had the privilege to be the keynote speaker last week at the 2009 Auto Summit, which kicks off the annual Denver Auto Show. They asked to speak about my idea for a $10,000 tax credit for all buyers of cars manufactured by GM, Ford and Chrysler.

Joining me on stage was Mr. John Medved, President and CEO of Medved Autoplex, a long established chain of car dealerships here in Colorado. Medved is the Colorado Automobile Dealers Association Dealer of the Year and simply put; one great guy.

The timing could not have been more opportune. About an hour prior to our presentation, President Obama announced his plans for both GM and Chrysler, essentially keeping them on a very tight leash.

President Obama officially announced the termination of GM CEO Rick Wagoner plus giving GM 60 days; and Chrysler 30 days to come up with restructuring plans before anymore bailout money would be made available to either company. The President also announced that Chrysler must merge with Fiat.

When did they add CEO to the POTUS job description?

The President didn’t mention about asking Detroit what government could do to actually help them sell cars. He did say the government would “back-up” warranties if you buy a car. Bet that will get you to a showroom.

Not.

President Obama is getting all his advice from people who know nothing about business or the American Automobile industry. After spending quality time talking on stage with John Medved, it struck me just what government is missing out on when it listens to bureaucrats instead of people like John Medved.

John’s dad worked on an assembly line back in Michigan for 37 years. John himself started out working the line before coming west to start his car business. His background is pure blue collar. He built up his business with grit, determination and plain old hard work. He’s an incredible businessman, who despite all the challenges facing the industry somehow is keeping the doors of his business open.

He agrees with me that the solution to getting the car business and our economy going again is sales. People aren’t buying because there is no incentive for them to buy. No sales mean no business.

Sales on the other hand mean business. It means creating more jobs. It means getting the economic blood flowing again.

John shared some staggering numbers. The industry is selling about half the cars it did compared to just two years ago. America is actually junking more cars than buying them!

I’ve blogged numerous times, and opined in numerous Op-Ed’s that the issue isn’t quality. Detroit makes great cars. Consumers simply need an incentive to buy. John Medved agrees. Give people a good reason to buy, and they’ll do just that.

John’s been to Washington. He’s a smart man. His ideas however, are falling on deaf ears. He’s just one of hundreds of “Main Street CEO’s” government isn’t listening to. I’m going to Washington next month to give it a try. Wish me luck.

I know, you see the photo-ops of business leaders supposedly meeting with government leaders. It’s all just “grip and grins,” But it’s the bureaucrats who call the shots. Not the people who live and breathe free enterprise. Or what’s left of it.

Until government realizes the tremendous resource it has in people like John Medved, we’re going to be stuck in neutral for a long time.

Washington. Listen. Please.

-John
John W. Scherer
John is CEO and Founder of Video Professor, Inc.You can reach him at ceo@videoprofessor.com