A recent column in the Wall Street Journal made a comparison of U.S. government policies in the present economy to those in the classic novel, Atlas Shrugged, written in 1957 by the anti-government, ultra capitalist Ayn Rand. Rand’s dogma which transcends all of her works has the fundamental principle that when government steps in to “bailout” incompetent businesses for the sake of the “common good” it causes a tumultuous domino effect.
Wall Street Journal Columnist Stephen Moore summarizes the book’s moral as the following: “Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs … and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.”
Sound kind of familiar? Tarp? Auto company bailouts? A bunch more “stimulus plans”? I know. It’s scary right now. Desperate times. And I believe the government must step in somehow to stop a catastrophic loss of jobs and halted workflow that a bankruptcy of the Big Three would entail. And yes, it has to create liquid for the banks. But just like in the book, large companies are getting a free pass on their incompetence in management and law breaking. A money infusion gives them an opportunity to change their ways, but there is a definite chance it could create a downward spiral just as Rand envisioned. Does GM have a plan for how to spend the new money, other than to survive the next few months? Do the banks know what to do with their new capital? All of a sudden they have to figure out new ways to lend it, because now we know that the ways they were using it — such as granting sub-prime mortgages and trading recklessly with high leverage won’t work. The economy can only stabilize when these companies get their act together, and then, when the people regain trust in them. I don’t see either one happening soon.
Question: Do you have faith that the U.S. government’s new stimulus plans are going to create economic change for the better in the near future, or will they exacerbate our problems by allowing incompetents and crooks to continue their ways?
Mitchell Lee Marks, a teacher at College of Business at San Francisco State University, wrote an editorial in today’s New York Times challenging an often used company mantra in a period of downsizing, “The company will identify ways to ‘work smarter’ and not just ‘work harder.’” He brings up the point that when people see coworkers laid off, they become averse to risk, holding back trying new, creative ideas which often require trial and error before they can become successful.
He also argues that having less people will mean less brainpower to come up with new solutions, which will stifle a company’s potential to make it out of the doldrums.
Marks says, “research shows that downsizings result in one-time-only cost savings to employers, but leave them no better able to compete in the marketplace. Downsizing has been referred to as corporate anorexia — companies that downsize get thin, but it’s no way to get healthy.”
Playing devil’s advocate – unfortunately sometimes “one-time-only cost savings” is the only thing that can save a company from going under that vary day. In the case of a manufacturing company which simply has no jobs going at the moment, letting go of people may be the only option to keep its doors open.
But I truly do believe that when a company, or team, or even an individual, has to compete with less resources, they often surprise themselves with what they can accomplish, and even do great things they might not have tried had they had their previous resources.
Today I am blessed to be one of those lucky individuals posed with the challenge of working harder, and smarter at an organization with less resources. I will take risks and try new things. If I don’t, there will be no future for Today’s Machining World.
Question: Do you believe that downsizing more often stifles creativity or encourages it?
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The Celtics lost for the sixth time in eight games last night. Although that may be depressing for Bostonians, it’s a lot less gloomy news than what’s going on in today’s manufacturing economy. Today I’m taking a break from opining on the Big Three to show you this beautiful display of waterjet technology.
Question: What’s the most interesting product you’ve seen produced with waterjet?
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It appears that U.S. gasoline prices are headed over $2 again, and before long, Americans will likely again be feeling the urgency for better fuel economy as they did in the summer of 2008. While GM is supposedly trying its damndest to début a saleable plug-in hybrid by 2010, many individuals with ingenuity around the globe have already produced their own custom made plug-in hybrids. Two college kids in Wheaton Illinois, Chris and Andrew Ewert, have constructed a plug-in hybrid by installing a lithium-ion battery in a stock Toyota Prius. The battery works in tandem with the car’s nickel-metal hydride battery already installed in the car.
Many of the established auto industry experts have dismissed car kits like the one created by the Ewerts as impractical solutions for mass production. You be the judge after watching the following video.
You can also read an interview with Chris and Andrew Ewert in the August 2008 issue of Today’s Machining World.