Media Curmudgeon

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March 19, 2006

A General Motors Parable

Judd Franklin, a student in my New School Media Management and Leadership class, sent me the following parable about the General Motors style of management. I'm posting it because it fits perfectly with the earlier post by Bill Grimes.

A Japanese company (Toyota) and an American company (General Motors)
decided to have a canoe race on the Missouri River. Both teams
practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese team won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat.

A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese team had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. So American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised that too many people were steering the boat, while not enough people were rowing. To prevent another loss to the Japanese, the American's rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the "Rowing Team Quality First Program", with meetings, dinners and free pens for the rower. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was outsourced to India.

Posted by Charles Warner at 11:39 PM | Comments (0) | Print |

General Motors: More Bad News

Bill Grimes writes:

"This past week General Motors, the beleaguered auto maker which employs 337,000 people and is steadily underperforming itself towards bankrutancy, revealed more bad news. Lo and behold, with but one quarter remaining in its fiscal year the company announced that “accounting irregularities” discovered this past week would increase its 2006 loss to $10 billion up from previous estimates of an $8 billion loss.

The business media has covered this latest management blunder in some detail the last couple of days. But something else has been bothering me about the company’s management decisions and its communications to the public. Something that is very visible to all the company’s constituencies: customers, employees, and shareholders. That something has to do with the advertising messages that GM communicates to hundreds of millions of television viewers.

During the last couple of weeks I have watched many college basketball games as we move to the NCAA Final Four. Any casual viewer of these college basketball games knows that GM’s Chevrolet division is a large sponsor of these games on ESPN and CBS. Three different messages Chevy presents to this large viewing audience with great frequency are inimical to GM’s consumer credibility, to its business operations, and to the value of its equity share price. GM management obviously approves of this communication or are they watching anything anymore?

The first destructive message is that Chevrolet tags each commercial with the line, “Join the Chevy Revolution.” Chevy Revolution! I wonder: how dumb is this? What revolution? Is there a good revolution happening with or to Chevy that is a secret to the public? Or do they mean the revolution of car buyers who no longer buy Chevrolets? What could this possibly mean? Everyone who has read a newspaper or been to an online news site in the last year or two knows that the company and its Chevrolet brand continue to lose market share. How could GM management possibly believe that a claim of a “Chevy Revolution” mean anything positive to the audience of their commercials? Worse, the claim emphasizes to me that GM management is completely out of touch with not just the reality of the claim of some supposedly positive “revolution” but with its potential car buyers who are watching a lot of college basketball on television wondering, like me, “What the hell are those poor people in Detroit saying?”.

The next wrong-headed decision GM management has made in its basketball commercials is to have in one commercial Duke University’s “Coach K” state with a less than confident gaze into the camera that “Nothing is more powerful than the truth. And the truth is more Americans buy Chevy than any other brand.” Well, I think, after seeing this ad for the umpteenth time, so what? Does that make it a car I should buy? Does that give me any reason to buy a Chevy? I know that fewer Americans buy Chevies each month and each year than in previous periods. Wouldn’t it have been so much more credible and effective to have Coach K say that he owns one or two or three Chevies and that he loves the comfort, the style, and the price (of these great American-made cars, would be the implied message)?

I also know, although I doubt that millions of others do, that GM’s CEO played basketball at Duke and that fact further diminishes the otherwise credible Coach K’s claim, in my mind. Does anyone who follows GM’s demise think that management and its Board ever questions the meaning of the commercial messages in which that the company spends hundreds of millions of shareholder dollars?

Finally, for years now Chevy has awarded $1000 scholarship in the name of the game’s most valuable player to the general fund of each school competing in the NCAA Tournament. It is not necessarily the over half million dollars over the course of the basketball season that the company donates to universities that irritates me. This practice sounds worthy and seems to be a modest expenditure. But it is neither immodest to a company that will lose $10 billion this year, has closed four plants, and laid of thousands of employees nor worthy or fair to the millions of shareholders who have watched in dismay as the value of their shares has speedily diminished by management mistakes and inattention. I highly doubt that shareholders have voted to make this GM donation to basketball colleges. And I also highly doubt that if asked today shareholders would approve this payment of their money to colleges that are generating enormous revenues from the television networks' license fees--fees that are large mainly because of increasing advertising revenues from companies like GM. I would also venture a guess that every other company which spends hundreds of millions in television advertising on college basketball games is making a profit for its shareholders.

Can General Motors’ management arrest its decline and save itself, the jobs, and the pensions of its million employees and retirees? Can it reverse its declining share of cars sold in the U.S. and the world? And, can it avoid bankruptcy and thus prevent the elimination of the value of the equity its shareholders still cling to? The answers to those questions are anyone’s guess, but GM management does not seem to have a clue as to how it is addressing those questions or how to relate its advertising, especially in the NCAA Basketball Tournament, credibly to its business objectives. Incidentally, these company failures are in sharp contrast to the passion and commitment to excellence that the student athletes in the tournament are demonstrating.

Posted by Charles Warner at 06:38 PM | Comments (0) | Print |

March 10, 2006

NBC Universal Buys Love Boat

NBC Universal announced this week that it was buying iVillage ("the internet site for women") for $600 million, or $8.50 per share--a 6.5 percent premium. I'm sure the vaunted NBC and GE financial people thoroughly vetted all the numbers before they paid $600 million. But did they look at the content?

According to Jim Carnegie's March 7, 2006, Television Business Report, NBC Universal CEO Bob Wright announced the deal by saying, "Acquiring iVillage will enable us to bring our programming to a large and passionate online community. We look forward to building on the considerable brand strength iVillage has developed over the past 10 years and to giving our advertising clients new and exciting ways to reach a valuable demographic." Wright certainly chose his words correctly -- "passionate online community" and "new and exciting ways to reach a valuable demographic."

To show how right-on Wright was, check out this iVillage Web page, where you will find links to the following articles: "Oral Sex: A Step-by-Step Guide," "A Guy's Guide to Gals on Giving Amazing Oral Sex," my favorite, "Mouth Magic," "Oral Sex: Tips for Her and Him," and the multi-cultural "The Japanese Art of Sex: 5 Mind-Blowing Oral Sex Techniques" (note the subtle double entendre).

Only out of journalistic curiosity, I clicked on the first article about oral sex and read: "Where do I start? The basic technique: Cover your teeth with your lips, with your mouth in an 'O' shape ‑- don't stretch your lips, though; keep them loose and soft. With one hand gripping the base of the shaft, make one smooth movement by sliding your (very wet) mouth over his erection, taking him as far into your mouth as is comfortable." Talk about new, exciting ways to reach a valuable demographic. By the way, you'll never guess who the author of the article was -- Tracey Cox. Swear to God, I'm not kidding.

Or how about this page about "10 Hot New Sex Positions," illustrated with drawings (darn it, just drawings--but NBC will surely correct that). The 10 positions are: The Diamond, The Side Slide, The Thigh Master, The Booty Bridge, The Carnal Clench, Randy Rider, Up, Up and Away, Niagara Falls, Bed Spread, Tilt-a-Girl, and Tantric Turn-ons. As you can see I linked to one of the more exotic positions just so you would know I'm not making this stuff up. Yes, this certainly is a passionate online community.

Another tab on the iVillage nav bar is "Magazines." Guess what, all the magazines are Hearst magazines, and the above 10 hot positions article came from just one Hearst magazine, Cosmopolitan.

So, what this deal looks like is NBC Universal is bringing Cosmopolitan to television. If the FCC didn't like Howard Stern's fart jokes, wait till they see five ways to give oral sex and 10 hot positions for having genital sex.

I wonder if Bob Wright is going to recommend iVillage to his wife and, if he has any, daughters? I wonder if GE CEO Jeff Immelt thinks I iVillage is OK for his family or for the image of GE? But maybe content doesn't matter if the bean counters say the numbers work.

Posted by Charles Warner at 12:15 AM | Comments (2) | Print |

ray ellin at March 11, 2006 04:42 AM writes:

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Steve Silberberg at March 10, 2006 03:04 PM writes:

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March 06, 2006

The UAW at the New School

In a recent email, Carol Wilder, Associate Dean of the Media Studies and Film department of the New School, where I enjoy teaching four classes each year, sent out the following clarification about faculty having to join the New School's new union, the UAW -- yes, the United Auto Workers.

"1. (The New School) is a closed union shop, meaning all employees covered by the bargaining agreement are required to join the Union as a condition of employment.
A. Employees who have joined the union as of March 9th (the day before they will send us the list for dues deductions), will have the
Union initiation fee waived.
B. The Union has advised us that dues are retroactive to Sept.
2005. The plan is to apply these retroactive dues to the March payroll, when we anticipate paying retroactive pay along with March pay.
C. Employees who do not join the union by March 9th, will
experience a greater retroactive deduction the longer they put off
joining. And, will most likely be subject to the initiation fee.

2. What are Beck Rights? Beck was a decision by the National Labor Relations Board (NLRB,) allowing an employee in a closed union shop, to elect to not join the union. However, he/she must declare him/herself, under Beck ruling to the Union. A fee will be applied to all wages, lower than the dues. This fee represents the costs to the union of representation without the added costs of organizing and other activities not related to representation. Anyone who wishes to declare Beck rights, must contact the UAW representative, (name and telephone number given).

3. Employees can decide to not have their dues deducted from their pay,and therefore pay the union directly. We would discourage this, as it will be much less complicated for the University, the Union, and the employee if they agree on the membership card to have the dues automatically deducted.

4. Employees should see their Union Rep, call the union at the above number or go to the website: http://www.newschooluaw.org/ to get more information about joining and the membership card to complete. Beck Rights documents have to be completed through (union representative).

5. What happens if employees don't join the union or apply their Beck
Rights? The Union would eventually send us a list of employees to be
terminated because they have not met this condition of employment. We would be required to put these terminations into effect."

My dear friend and colleague at the New School, Bill Grimes, sent me an email indicating that he would rather be terminated than join the union and sent a virulent anti-union screed that I will spare you from reading. The essential points he made were that unions are corrupt and that forcing university employees to join a union they didn't like or want to represent them was, in essence, taxation without representation. Bill also accused me, because of my progressive politics (primarily anti-Bush/Cheney, and anti-Iraq War, which, of course, puts me in the majority now) of being pro-union.

As regular readers of this blog know, Bill is pal of mine, so rather than take offense, I wrote back to him the following:

You err. I hate the union and all unions. I had to deal with them at CBS and NBC and hate all that they stand for: seniority instead of performance, forcing unnecessary jobs (and, thus, unnecessary costs) on organizations, and job security in a global economy when CEOs have no job security, among other things. The unions put US Steel out of business and will soon put GM out of business with their short-term, greedy thinking (the UAW did GM in and will eventually do the same to the New School).

Unions are outmoded and are based on socialistic thinking, which was fine when management was taking unfair advantage of labor 100 years ago (which was before I was born, by the way). But times have changed and the pendulum has swung too far against rational, responsible management that is trying desperately to remain competitive in this globalized, highly competitive economy. Unions are anathema to competition and a reasonably, intelligently regulated market-place economy.

Unions are dying---membership is way down--and they are looking desperately to replace their membership, which is why they are looking at non-traditional areas begging, scraping for members. The very notion that college teachers are being represented by the United Auto Workers is absurd--more absurd than a play by Samuel Beckett. It's absolutely unreal. It's also demeaning and degrading to be represented by the same people who represent grease monkeys. These UAW union organizers have absolutely no business, no right to represent me, and I don't want them to.

It would be interesting to compare the student evaluations over time of teachers (I prefer to be called a teacher rather than an instructor--instructors show mechanics how to change spark plugs) in the Media Studies and Film department who were union activists, supporters, and organizers to those of us in the department who oppose the union (Bill and myself, for example). It is my hypothesis that those who support the union are mediocre teachers and, thus, whine to the union to get them raises they could not get based on teaching performance, determined to a large degree by student evaluations. Unions are the last refuge of the mediocre.

The UAW is also deceptive. In all its bullying me to join the union, it never told me about my Beck rights.

I did not vote for the union (I didn't need it to negotiate for me) and I won't join the union. I will call the union representative and declare my Beck rights. If for some reason I cannot get my Beck rights instituted, I will be fired (and proudly so) rather than join the union. Unions, particularly the UAW, are anathema to the academy, harmful to the New School (because they reward seniority, stupidity, laziness, and underperforming) and are especially lethal to student learning (I can't remember when I learned anything from a mediocre teacher or a union organizer or member). The union may have won a close election, but the New School, academic deans who hire teachers, students, and excellence in teaching all lost.

Please feel free to distribute these remarks--even to the union. I would like the union to know what I think because my few encounters with people from the union have been more than unpleasant. The union representatives I have met have been uncouth, uneducated (or at least inarticulate), arrogant, overly aggressive, and, most of all, angry. They railed at me and absolutely did not listen; had no intention of listening to me. If they don't listen to me, how can they possibly represent me?

I think I know why these union organizers and members are angry. They are not angry at the New School, but angry at the system--a system that recognizes their mediocrity. No one really wants them but the UAW, which is enough to make anyone really angry.

Posted by Charles Warner at 11:53 PM | Comments (1) | Print |

Lex at March 7, 2006 01:45 PM writes:

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March 01, 2006

Bill Grimes Responds

My friend Bill Grimes and I rarely agree, which is one of the reasons why we are such good pals. It's sort of like macho, male wrestling--close, friendly combat. But we do agree on occasion and often add insight to an issue from two different perspectives. Here is Bill's response (edited) to my "Parsons Triumphs" post:

"One of your very best blogs because it included a new insight (the Time Warner barons). It is a logical conclusion that Parsons used Icahn's smart medicine to sell his barons on needed changes. Now, the next chapter in this tale is, 'What if the share price lags for another 6-12 months?'

The answer is that Parsons will be out and some pieces, such as AOL, if anyone will buy it, and TW Publishing likely will be sold, and it may be decided by a new board of directors that the Fuedal Era in the entertainment business is over. That's what an old, rich baron by the name of Terry Semel (CEO of Yahoo) discovered, and he is richer and happier now than ever. Monarchy, The Church, and Socialism are dying in corporate businesses, and even though Time Warner is among the last to get the news about the demise of these institutions, it will get it when Parsons and the current board depart. Democracy is here. Old-fashioned corporate kings, popes, and greedy barons are being fired or finding a new life in jail."

Posted by Charles Warner at 06:51 PM | Comments (0) | Print |