Misc. Ramblings

Many of the problems we face today probably have no quick and easy solutions. Yet, quick and easy solutions are what most people seem to want. This apparent focus on only the short-term makes it difficult, if not impossible, to solve our present problems.

Notice, I said focus on only the short-term. It is clear that all businesses have to be aware of the short term picture, but to focus only on this leaves them blind to business opportunities that may take decades to develop.

This article lists some of the changes that we may need to make to move forward in our long-term problem areas: education, transportation, health care, and retirement. These are all long-term problems that cannot be fixed with quick solutions. This is why we continue to face these problems and will continue to do so until we change our focus.

Let's take a look at one of the areas. Specifically, domestic transportation. Some people like to point to labor unions as the main, if not sole, reason for what ails US car manufacturing. While poorly led unions may be part of the problem, the facts suggest the larger and more complex problem is management focused only on the short term.

The domestic vehicle manufacturing industry has been in a decline for some time. While GM was trying to build bigger, more expensive, and less efficient SUVs and trucks, Toyota and Honda also invested in developing bigger SUVs and trucks. But they also invested in hybrid vehicles - both big and small. Toyota and Honda are now among the leaders in hybrid vehicles (although recent sales have slowed). As the price of gas passes $3 per gallon, heading toward $5, people are buying them by the thousands.

Were domestic car manufacturers blind? Did they not see the indicators that clearly showed fossil fuel costs would increase, substantially? I don't think so. I think they saw the same indicators that Asian manufacturers saw, but the US chose to ignore them because the US is focused on short-term profits. Hence, we were unprepared.

Making a shift from the internal combustion engine to hybrid vehicles did not occur over night. It took decades for the Asians to develop the technology to make this work. But because of our short-term decision not to pursue alternative technologies, we don't have the vehicles that people want to buy.

This article takes a look at another example of how short term business decisions have negative long-term effects. In this case, on retirement/pension plans. Such pension plans are some times given as an example of the crushing costs employers have to pay. Yet. It is a problem of their own making, based on short term decisions.

To be fair, it's not only bad management. There are factors that management do not directly control. One example is the globablization of labor. No matter how cheaply you try to pay your employees, there is almost always going to be a less developed country that will pay even lower wages (or no wages at all in the example of slave labor). Moving your company to so called "right to work" states, eliminating pensions, and cutting health care may give a few short years of additional time but, in the long run, many companies who take this short-term route will find these as temporary fixes and eventually move manufacturing off shore.

A longer-term alternative solution is to add value to what you make. Rather than making the engine, that was high tech in 1950, we can make the engine management system. Rather than making headlights that were hot stuff in 1920, we can make high intensity discharge units. Rather than making the drum brakes that were state of the art in 1910, we can make the anti-skid disk brake system designed for this century. Rather than focusing only on cost, we can shift to building reliable, forward looking vehicles that people are willing to pay more for.

Yes, this is a shift in the types of jobs to be done. Yes, this is a shift in the types of workers that are needed. But the biggest shift is in the focus of management. Do I see US car makers making such changes? Unfortunately, I do not. What they are doing are bringing back big block hot rods. The Dodge Challenger. The Chevy Camaro. The hemi powered gas guzzler SUVs. Is this the future that will lead the US back to the forefront?

As I said in the beginning, many of the problems we face today have no quick, easy solutions. Hence, as long as we focus on only the short-term, it becomes difficult, if not impossible, to solve our long-term problems.

Aloha!