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Real estate professionals could teach the Big 3 Execs a thing or two

Disclaimer: I was born in Michigan, raised in Michigan, and have each of my relatives
for generations either directly employed or supplier employed by the auto industry, with
the exception of one family member.

I am biased. I am praying the auto industry that created the middle class in America
survives and provides employment for generations of Americans to come.

Disclaimer over. I am still shaking my head at the mistakes that the Big 3 executives made this
week during their trip to Capital Hill to ask for help from the US Government and taxpayers. Watching
all of this unfold has been a learning experience for me, and in ways that surprised me.

Many of my thoughts were about what we do as real estate professionals on a daily basis to help serve
our clients and how much the Big 3 executives have forgotten about the basics of business. I think
they could learn something from us about:

Preparation   We spend much time preparing to serve our clients, whether it be by preparing to
market their home for sale, or by spending time researching the best ways to help our buyer clients.
The Big 3 executives were not prepared to answer the tough questions, nor were they prepared to
show the American taxpayers how they will be able to repay the loans nor steer their businesses in
the direction that will be profitable. I'm sure they have the answers that the government seeks, but
they weren't prepared to answer them.

Assuming   I don't believe there is a real estate professional in this business today who assumes that
simply because they ask for business that they will receive it.   The Big 3 Executives seemed genuinely
surprised that their request for help was met with anything but "Of course we'll help you."   Frankly,
I think it was a good thing that the people on Capital Hill shocked them out of their assumptions.

Appearances Those in our industry who spent the boom years more concerned about the way they
appear to their clients and local consumers are fading fast from the industry. "One up-manship" with
the expensive cars that their clients cannot afford, and the blatant appearances of wealth that their
clients do not have are just plain rude and not sound business practice. Note to Big 3 Execs: Park
the private planes. If your hand is out asking for money you should darn well appear as if you have
cut the fat everywhere else. The American public already has, and the autoworkers and their families
already have.

Go above and beyond   We do, on a daily basis. We add daily to our list of duties to our clients,
to the things that we look out for and plan for, and to new & innovative ways to help our clients fulfill
their dreams. Tell us you can be flexible and innovative.   Better yet, show us.

~Kris Wales~ A Macomb County MI real estate agent

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Posted by Kris Wales - Macomb County MI real estate blog & homes for sale search site on 11/21/2008 11:04 AM

Comments (50)

50 Comments on Real estate professionals could teach the Big 3 Execs a thing or two

NOV

2008

Good points Kris... I was a bit shocked at the haughty way that the execs acted. I feel that the Unions have done what they wanted from several years back and that was to "Break the Backs of their employers". Now that they have done that what are they going to do? They certainly got their wish...

They did nothing to win their case by their appearance. I'm sure it will work out when the new Congress is sworn in. Of course like you we have been watching the Detroit Media market and I have heard nothing on the Unions what they are willing to do. Both the Ex and the Unions need to get a grip, I am thoroughly disquested with them both.

Pat Buchanon wrote a good article on it, I'll email it to you.

Kris, The big boys have a week+ to come up with more compelling answers and a cohesive plan that the Government can get behind (or not).. Maybe you should forward this outline and a copy of Emily Posts good manners book to these guys

GREAT BLOG - nice to see congress agrees with you - lets see a plan - then save jobs. We cannot give money so they can come ask again in 6 months!!!

I was born in Flint and raised there for quite a few years but own a busines still in Flint my whole family is still there and most worked for GM and AC/Delco and I do not fully believe in the bailout. Michigan needs help and not sure if it's by way of the Automakers. IF they are going to bail them out, they need more forward thinkings exec so they need to be out, implement higher taxes on foreign cars what country who builds cars doesnt do this? Unions need to be disbanded this isnt the 40s or 50s it's an old school mentality and is huge detriment to the auto industry in the us. Again I love Michigan one of the best places and my family is there it needs help, just not sure this is the help it needs.

I tried to remain open minded about this after I saw your post on it then this happened. It's quite a shame. We are seeing the fat cut out of the gaming industry to adjust to this economy. It's really hard to relate to people receiving a "bonus" for non-performance when the bonus was cut out of our own personal budget <my husband's dept was one of the few that was performing but the bonuses are based on all properties/departments.>

The national media has been bagging on the union worker that makes $70 an hour but lordy, what do these guys do to earn their keep if they can't even prepare to sit in front of congress and be drilled in regards to a business and perhaps something as simple as a business plan that they are supposedly running.

These American iconic companies need to update their programs and business plan to survive - and yes, I have always driven Ford and Mercury cars.

Bubba:   The unions actually agreed to some pretty strong concessions over the last year. The auto industry won't see the effects from that though until next year.   I think the latest that I read was that foreign auto employees actually make more money than Amercian union workers. I'll try to find the article and send it to you.

Missy:   I received the article. Thank you. Left you a reply in your email. Pat Buchanan was right on.

Richard:   I'd be hard pressed to ask to borrow money from someone without being prepared to give an explanation as to why I need it, and how I will repay it. Seems basic to me...

Steve: It sounds like the government is will to lend a hand (actually, lend some money) but the Execs really handled all of this the wrong way. I'm glad that they were given a chance to go home, plan, research and go back hopefully with a more professional foot forward.

Heather: Part of my gripe with all of this is the world "bail out". I could be mistaken, but I believe the auto industry is asking for a loan to help tide them over until this credit crunch is over with and to help them retool to meet the higher EPA needs and quality. I don't have a problem with that. I'm all for it. History has proven that the American auto worker is up to the task of working hard and sacrificing. My gripe? The Execs that seemed to take it for granted that their request would just be granted with a nod, and not being prepared. It was embarrassing to watch them.

Renee: I agree about the bonus's and merit salary increases. If the company that you are working for doesn't perform, then don't take the bonus. Turn down the perks. Lean starts at the top. I know when my children were small and I had to make cuts to the budget we all sacrificed. The union has made some pretty good concessions over the last year or so, but they won't start to take effect until next year. (I'd have to re-read those articles to be more specific and accurate about this.) I don't remember reading a thing about the execs cutting their pay or bonuses. Frankly, they should all be docked a nice large chunk of pay for thier ineptitude this past week.

Gary: Perhaps there should be a CEO network..kind of like what we have here on AR. They could all share new ideas with each other to better help each other and not worry so darned much about guarding secrets. All for one? I won't hold my breath.

Kris, this is so on target! I could not believe three guys flew here in three private planes at the cost of about $22,000 each, and I'm not sure if that's one way or round trip! And they really opened themselves to cheap shots from Congress and from the (ever hungry for this junk) media.

God bless our auto industry, but it needs a hard, strong time to reflect on itself. The unions have got to get out of the greed and laziness in order to become world class producers again.

The tax structure in MI is killing the state.

Accountability, self-reliance, hard work, fair negotiations, and more made this country great.

I feel so bad for the workers who are truly suffering due to the greed of the ones at the top. If they only sell their planes they could probably keep going for awile. How arrogant of them to appear before Congress with the attitude of entitlement. I say let's skip the big guys and give money directly to the workers. A little like what SHOULD have happened with the bank bailouts. If the money went directly to the homeowners falling behind on their mortgage, things would make much more sense!!

Happy Friday!!

Lori

Kris.. excellent post and I can see why it got featured. I think your break down and the descriptions were well thought out. I especially couldn't agree more about appearance issues that I have. (now, where was I.. I just had to take a 15 minute phone call... lol) But yes, it's one thing to dress successful, to feel good, and to have the toys. It's another thing to feed yourself these things based on the consumer and not giving good deals. Or giving yourself added bonuses or higher bonuses just so you can be happy.

Overall, common sense... we are flying to DC to beg for help. Let's each take private jets. Just plain dumb... don't get me started.... again, excellent post.

jeff belonger

Boy what a show that was. I was good to finally see some clear action by congress. Not a good idea to show up in style and claim poor.

Great points -- great posts -- thanks for sharing -- I agree with Jeff , I can see why it was a feature post -- JE

They need a better product if they wanna make it in this world. I got my first american car few months ago, new, and already have issues with transmission.

I agree with Richard Barbee about the TAX structure killing the state, I own a home there and I am penalized with higher taxes because it is not my homestead, In Michigan my Property taxes are equal to my home in Denver Colorado which has an assessed value of 5 Times the House in Michigan.

So who wants to Invest in Michigan? Your Taxes are Too high and new business will not relocate there.

Thank you to whomever is responsible for featuring this article. Perhaps someone that is taking the trip to Capital Hill early December asking for $$ will see it...

Patricia: When I heard them I was embarrassed. I shouldn't have been (heck, I'm not the one asking for a loan). I hope they rethink that mode of transportation on the return trip.

Richard: I could go on a rant for days about the tax structure in our state and how it affects business. But I'll spare all of you :-) I absolutely loved your last sentence "Accountability, self-reliance, hard work, fair negotiations, and more made this country great."

Lori: I wish the bank loans would have been given more to those who are facing foreclosure instead of going to buy stock and such. Giving $$ to the autoworkers wouldn't help save the industry, but directing it to a stronger foundation and proactive vision will go a long way. Thanks Lori.

Jeff:   I deleted quite a bit of what I had originally written because I was so frustrated and angry. Had to walk away and think a bit more rationally (and with a bit of patience). Thanks Jeff. Hope your phone call was productive :-)

UnusualCommercialLoans:   That was a bright move wasn't it? /sarcasm.   I couldn't believe it.

Jason:   Thank you. I appreciate you taking the time to read and comment.

Jon:   I'm sorry to hear that. Quality has really made great strides in recent years. Thankfully if your vehicle is just a few months old you'll still have a good warranty. I hope it gets resolved for you soon.

Jane: Oh, I hear you. When I see what property taxes are in other states I just stare at the numbers and can't figure it out.   Because it is so hard for Michigan to attract other industries it is even more imperative that the auto industry doesn't fail.   I am afraid for what the future of our state will hold if it doesn't.   It's not like other businesses and industries are standing in line at the Michigan welcome center.

Kris,

Watch this http://www.youtube.com/watch?v=ufexZnViDiU it's about Wayne County Foreclosures.

Great blog about the Big 3, I too hope there's some way to straigthen this mess all out. I'm beginning to wonder when it's all going to end.

Kris, Great post. I just shook my head when I listened to the Auto Execs and congress today. We agents are more prepared than they seemed to be. I expected more from them. Showing up in separate Lear Jets, give me a break. I am embarrassed for them.

Good post. I agree the execs weren't prepared and it is pretty ballsy for execs for any of these companies asking for tax money and still receiving bonuses and spa junkets. But it is pretty ballsy for our reps to reprimand anybody- I don't see anybody in the House or Senate asking for a pay cut, cutting their staff, not using the private planes WE supply them, or the cars and fuel we pay for, or paying for their own health insurance, or refusing a pension after only serving 6 years (the amount of time I believe that makes them fully vested). It was a joke on both sides of the table.

BTW- I drive a Ford Tauras and am at 180,000 miles with everything original except the master cylinder (and tires and brakes of course). I also got 200,000 from the last Tauras. The current one gets 28 miles/gallon. So I really hope congress doesn't require hybrid or electric car production to loan the money. They already make some pretty nice cars with good mileage.

For me...this goes back to the image verses reality. Anyone can hire a good ad exec to create an image...but you better actually be prepared to do exactly what you claim you're going to do. IF you are ALL image...eventually...people are not going to be fooled. I think the facade is cracking across our nation. There are still a lot of masks that need to come off...in our industry also. GBU~

I was just thinking on the way to work today that we need a new car made in America. I would call it the Spartan. It would have no options. It would be safe, cheap and fuel efficient. It would have roll down windows, no power steering, no air conditioning and a small engine. It would be affordable. Think the big 3 would like to talk to me? Great post Kris.

Maybe they should drive down the road to Ohio to talk to the Honda people or further south to talk to Toyota. After the Big 3's disgrace this week, Honda notified the local news media that (1) they weren't in trouble and (2) there were no plans for layoffs. BTW, there's no union at Honda and they make cars that people actually want to buy.

Maybe it's time for the "Big 3" to not be so big anymore. When companies don't make wise decisions, and don't keep up with market trends, they usually go out of business.

Kris... Thanks for the post... you are right on! I just saw Fred Chamberlin's comment ahead of me... I thought the same thing when I saw the Big3 TV bit. I was wondering if they could recreate my old 66 VW... I'd buy it in a second!

Our industry has taken it's hits this year also... I was thinking about going to DC myself to ask for a bailout but couldn't afford the trip and Christmas too...

René Fabre

Kris - Congratulations on your feature! I think the Big 3 need a reality check. I feel sorry for the people who work there and all the ancillary businesses that will be hurt if they go under, but...I'm not a union person and when you're non-union all you see is their greed. Good for them if they've negotiated a good contract, but when it's at the expense of their livlihood then what good is it?

I mean please....going to Washington to beg for money in three separate Lear jets??? How ignorant and we can really see why they're in so much trouble! Not much common sense going on in the executive branch of the big 3.

All involved need to sit down and work out a plan that works! I wish I had read Buchanan's article.

Kris, you nailed it! I saw on the news today that one of the big 3 is getting rid of 2 of their private planes. Ouch, that must really hurt. ;o)

Kris, Great post you certainly hit all the high points my husband and I were just discussing last night! Great Feature for the times!

Hi Kris,

Good post - I have been thinking about this as well.

The big thing for me is PREPARATION.

How in the world do you go to Congress, with America watching, asking for billions of tax payer money, and not have a plan with what you are going to do with it and how exactly you are going to change your business.

This was amateur.

Their point was that if Congress didn't give them the money, then the economy would be harmed.

They missed the point.

I hope that the Big 3 read this blog post ! You are absolutely right.... I think sometimes when people get to the top they forget the important points that build a foundation... and build a business.

All for show, They'll get the money just like any other welfare recipient that has the nerve or low self esteem to go ask to feed at the government trough. Think of all the money wasted by bouncing this around committees. If they didn't do it there would be use in the politicians having their job. The only good thing about all the suffering that is coming our way is to see when the folks finally say enough is enough.

Get rid of the execs who put the auto industry in this mess, demand a binding labor agreement with the unions and have Mitt Romney ( sp ? ) run the show.

My fear is there is no definable line that separates who should receive bail out money and who should't. Where do we stop and who is left to determine if the funds are going where they are intended? The term bail out should not even be part of the vocabulary in a democratic society. My Active Rain blog post this morning morphed into a page long rant on what I would like to see happening to revive our economy. Click here

What I think happened is that they thought the Democrats were going to cave because they owe the UAW... and they didn't think that anyone was going to say anything to derail that train. But I guess both sides of the aisle wanted to put on a show... of course they did get a "bring me your homework after the rest of the class leaves and it will be ok" from Congress..

NOV

2008

Jane:   Thank you. I'll watch it as soon as I'm finished here. I appreciate you sending me the link.

Erika: It will end as soon as people feel as if they have some job security, and we focus on buying American made goods and products and stop outsourcing our jobs and importing our daily products. Thank you Erika.

Audrey:   It was embarassing. Thanks Audrey.

Jackie:   You've brought up some interesting points. (The ones questioning the Execs and their perks during a hard economy) Thanks. I'm also a Taurus owner and it has been one of the most reliable vehicle I've ever had. The only one to top it would be a Saturn (a GM product) that I owned for quite a few years. Thanks Jackie.

Elizabeth:   Loved your comment. Image is not what is important - it is more important what one does. Thanks hon.

Fred:   Call me crazy, but I love it!   I have a feeling many people would also. Perhaps take your pitch to the Big 3 (I am serious).

Elaine:   That's what they're trying to avoid - going out of business. It's all well & good to let the free market run it's course, but we're talking about millions of human lives affected. The economy in this state and the nation can't take those catastrophic job losses right now.

Rene:   LOL. Yes..who could afford to take the trip and have a Christmas also?   I remember those Bugs :-)

Linda:   I will forward the article to you. It's a great read. The unions do have some hard concessions that are going to finally take place in the next year and that will help with the financial line for the Big 3. We just need to get 'em to that point. It isn't just the auto workers that will be out of jobs as you stated. It's suppliers, and any consumer driven business: Tourism, the boating industry, material goods..the loss of income to this large of the population won't have a trickle down effect - it will be pouring down in buckets.

Greg:   I believe it was GM that said it was turning in the lease on 2 of them. Bravo. Thanks Greg.

Cat:   Thanks so much. I appreciate you taking the time to read and comment.

Mark:   That left me baffled also. Can you imagine walking in to a potential sellers home without one iota of preparation? Preposterous. Thanks Mark.

Christopher and Stephanie: You're right. They forgot the basics - be prepared and be humble. Makes you wanna shake your head at 'em...

Charles: Ouch. Welfare recipients? I do hope they get the loan they are asking for, but wish they had been humble and prepared when asking for the loan.

Bill: I think that would be the worst thing they could do now. Getting rid of experienced management at this crucial period in their history would throw everything into a further tailspin. You can't bring in new people and expect them to not only be brought up to speed quickly but to have answers quickly. New people should transition in slowly. Romney? No thanks. I used to admire him, but his words of the last week lead me to believe that he forgot his roots and doesn't give a damn about the human beings that will be affected by an auto closure.

Mike: I hate the term bailout. Loans? Yes, if needed and can be proven to be paid back. I also agree that there needs to be a defining line and there should be oversight. It's scary times right now, not only economically but politically. What is happening now and how it is handled is going to define the future in the US for our children and grandchildren.

Lane: They should have had respect for the US taxpayers and turned in their homework before they were asked for it. I think that is what bothers me the most. None of us in our profession would consider serving a client without being prepared, or asking for their business without it.

I am no self proclaimed expert, but it seems to me that the car companies have not forced themselves to change at all. They have been using the same business model and it hasn't worked for quite some time, in a terrible way this is probably good for them because they will become better more efficient companies afterwards if they can make it through.

Kris,

I agree with Morgan and I just have to say, if a business model isn't viable, most businesses have to file bankruptcy and restructure. Seems the big 3 haven't been operating smoothly for years and a resttructure is exactly what they need. If your business model doesn't make sense, why should the taxpayer support your operating expenses- which is really what they are asking for.

If you dont' have a clear plan to do serious restructuring, why not save that money for the next gaping hole......unemployment benefits for one.

Congress does seem to think that they can do everything. Odd.. a group that can't do their own job well... has a lower approval rating than the flu, and can't control spending if their own money depended on it... and they think they can do a better job of running a car company.

Like the car company execs can crow about that... I think I could grab 10 people from here and we could be a better executive team than what is in place.

We couldn't do much worse...

NOV

2008

Lane's comment is on my screen so I'm also reading it. I think we could grab any 535 Active Rain members and put them in the House and Senate and do a better job. Well, except maybe for the attorneys since the great supermajority of Representatives and Senators are attorneys. Hmmmm. Maybe I've found the problem -- LOL. Maybe we need a constitutional amendment such that attorneys show not be allowed to run for public office.

NOV

2008

Morgan:   I agree that the US automakers were slow to react to consumer needs. Now that they have (read up on all the new vehicles that are up and coming, as well as how much better quality has been in the last decade) they need an opportunity to see it all through. Thanks so much for your comment Morgan.

Rebecca:   Bankruptcy isn't a viable option for any of the Big 3. Recent polls show 80% of Americans wouldn't purchase a car from a company that is in bankruptcy. If they can't sell them while in a Chapter 11, then may as well shutter the plants and sell off the assets.   Record numbers of workers heading to the unemployment offices should scare the dickens out of Americans everywhere. This isn't just a Michigan problem. Thanks Rebecca for stopping in and commenting.

Lane: " a lower approval rating than the flu" That cracked me up. Thanks :-) Needed it this morning...

Russel:   For years I thought leaders of businesses would make excellent public servants, but I'm re-thinking that now. What a mess huh?

NOV

2008

Kris,

I don't think they thought we would notice the excesses in their mode of travel either. :)

Steve

Steve: Wasn't that a head shaker? At least when they go back the first week of December it sounds like they are taking a road trip - with the newer Hybrid models. Sometimes they should step out of the board room and into a cafeteria or plant floor and ask for opinions before doing things. They'd get real people answers, instead of stuffed shirt answers.

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