Obama, the inept CEO of United States Incorporated

By: John Richards Posted: December 2, 2012 No Comments

I don’t want to say Barack Obama is stupid when it comes to raising taxes on the rich, I may think it, a lot, but I don’t want to say it. Instead I’ll just say he’s slow, truculent, unintelligent, petulant, inexperienced and dense.

Wow! “Stupid” is an acronym! Who knew?

The first thing you need to understand is that the federal government is just like any other business and the president is the CEO. His appointees serve as the managers. Like every business this one has revenues and expenses. And it is in distress.

That’s when I’d come in. I spent over twenty years as a turnaround specialist fixing distressed companies. Companies that not only were losing money consistently but had perfected it to an art form, companies that had borrowed the last dime any lender would provide. The lenders had had enough and needed to protect their investment. It was either fix what was wrong or work out of the loan to mitigate any further loss to the lender. And unlike the United States Incorporated we didn’t have the ability to print money. Well except for that one printing company, but I digress.

But since this is about taxes (revenues) we’ll keep our focus on the sales side of the business and leave the inept managers for a separate article.

The majority of companies I worked with were small to medium automotive suppliers. Yes, we actually used to have small automotive suppliers, a whole lot of them. But what struck me as the height of stupidity was when I went into a company where sales were declining only to discover that they hadn’t received a new contract for a part to be used in an upcoming model in well over a year. To make matters worse sales they were losing market share on parts where they weren’t the sole source.

So I’d trundle off to the CEO’s office and ask him why sales were down. And the answer I’d get I sadly heard more than once. The conversation would go like this. Why are your sales down? “I dunno.” Well you’re losing market share to your competition on the parts where you’re not the sole source, why? “I’m not sure but I’m sure they’re not giving us our fair share of the business.” (Hmmm, where have I heard “fair share” lately?) Well what does your rep company say about it? “Well they tell me they’re at (insert name of big three automaker here) every day but they just aren’t getting anywhere trying to get parts to bid on.” I don’t get it, three years ago you were getting all sorts of contracts. When was the last new part you got? “Eighteen months ago. It was a part no one else wanted, we’re losing money on every one we make.” Well then what’s going on with your reps? How could they do so well and then, almost overnight, nothing. “Well they’re the new reps.”

What happened to the old ones? “I fired them.” Why? “Well they were making more money than I was and I didn’t think that was fair. I didn’t think it was right.” (Sounds a lot like class envy if you ask me.) “Besides that the new firm works for three and a half percent and the other guys were getting five.” So let me get this straight, you’d rather pay out three and a half percent on no new business than five percent on a new 15 million dollar piece of new business. Is there any chance of getting the old rep firm back in here? “No, they’re repping some Japanese suppliers that came here with Honda when they opened a plant. I was sure they’d cave when I fired them but they were stubborn.” So how are they doing now? “Those ingrates are raking it in. That’s the gratitude I get for making them what they are now. There’s no way we can compete with the prices they can quote. I just don’t get it.”

But just to be sure I kept the conversation going.

I know that you bought this company four years ago but I haven’t heard how it was that you came to buy it. “Well I used to do personal income taxes and did them for the previous owner. I knew how well how he did with it and when he wanted to retire I made a deal to buy it.” So you didn’t have any experience running an automotive parts manufacturer? “No.” So how did you plan to get your arms around this thing? “Well I hired my two sons and my daughter to help keep track of what was going on.” What kind of manufacturing experience did they have? “Well none but, you know, they’re family and they know this will all be theirs someday. That’s a lot more valuable than experience.”

Deciding this could be a teachable moment, I continued.

So let me make sure I’ve got this straight. You bought this business, with other people’s money, and became CEO without knowing anything about running a business. You’re most trusted advisors are an English major, a phys-ed major and a daughter who worked in a boutique. You have no clue the reason you’re not price competitive, without even looking at all the manufacturing inefficiencies and labor costs, is because instead of growing the business to reduce your overhead costs per part you decided that it was just plain unfair that your manufacturer’s reps we’re making too much money and you had to do something about it. That these few people, who are just as equally responsible as the guy who founded this business, didn’t deserve the large amount of money they made for bringing in the work that built this business, that created the jobs. And then you’re surprised and irritated to find that, given their means, education and knowledge they wouldn’t cave in to your demands and put less in their own wallets because it’s the fair thing to do and instead took their talents to other companies from far away lands. And you still don’t get it that by penalizing those few who actually generate the sales you only hurt yourself and all the working class people you’re responsible for putting out of work.

He replied: “Don’t tell me how to run my business.”

Needless to say he didn’t have a business to run for very long.

The moral of this story, well you already know the moral of this story. But for liberal readers and Obama adorers remember this. When you take away the incentive to grow a business, even United States Incorporated, your revenues fall, your business fails. And I’ve got a feeling of déjà vu all over again.

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