Professor Elam

Toyota, Stage 4 Failure?

* President Akio Toyoda followed up his statement that he thinks Toyota is at "stage 4" of the management book, "How the Mighty Fall," described as "grasping for salvation," by saying he thinks Toyota can move out of stage 4, "because it is blessed with the best dealers and employees in the world." Carter added that "many people online expressed admiration for Akio's honest assessment and his desire to change the company for the better.

Well we never heard Rick Waggoner say that about GM did we?

You Mean this Thing Floats?

Here is another 2006 idea trying to, literally, float in the New Normal. Royal Caribbean 

commissioned this $1.5 Billion cruise ship. Yep, 6300 passengers which is about the entire population of well, Crane, Texas. the smoke stack retract so it could fit under the bridge outside the Danish shipyard where it was built. 

Cost students will recall that break even is fixed cost divided by contribution margin per passenger in this case. I think I will pass on being a passenger, imagine the lifeboat drill?  This ship is, are you ready, five times the size of the titanic. Good think it will be floating in the warm waters of the Caribbean...

Clearly RC thought they could book enough passengers to hit fixed cost on each trip and rake in money from the rest. This is rather like that Airbus plane that seats 600, I will pass on that one too....

Flint on Chrysler

If Chrysler is going to make it, someone is going to have to come up with some money. 

That's my favorite saying about accounting, sooner or later it's all about the money. 

Jerry Flint takes a look at the capital budgeting options for Chrysler. Interestingly Fiat has yet to put up a dime, smart guys I would say. 

Flint suggests that Chrysler will go back to the government, and shows that Ford is already lined up for another $6 Billion. The best bet is that the Administration will not let the Midwest lose more jobs before the 2012 elections. I am with Jerry, Chrysler gets the money. Do I think that will work, no......

Maria Interviews Katzenberg

Katenzenberg of Dreamworks on the movies. 

Note his discussion of costs and adapting to new delivery platforms. But I found his observation that being in a movie theater is great but in India they are watching movies on cell phones. I will pass on watching the movie on the cell phone...

I do agree that great stories make the movie, this means more outlets for budding writers and film makers. 

SAWS Drought Relief Kit

SAWS is offering their Drought Relief Kit.

Thos of you working on the Cactua Flower Project (graduate course)  should take note.  

I believe that this is very much a project that is timely and green.

As SAWS says, do not let the recent rains deceive you about the need to conserve water. I believe that we will never leave water rationing.

I have now posted some ideas on local coffee shops as well as these drought relief ideas, I will be glad to post ideas, photos, links that you have which support these project ideas.

La Taza / Mocha Java

Those of you working on the coffee shop case might start exploring neighborhood shops in the area. 

La Taza is in my neighborhood, take a look. 

Mocha Java now has three locations in San Marcos. How many other examples are there of independent coffee shops can you find in the area? 

Gee I don't mean to make this too easy but you should then benchmark what they are doing for the success of your proposed venture. 

La Taza

Those of you working on the coffee shop case might start exploring neighborhood shops in the area. 

La Taza is in my neighborhood, take a look. 

Not Evil Just Wrong

Michael Moore got famous with Roger and Me, describing his 'staged' attempts to meet with Roger Smith then CEO of GM. Now another couple of documentary makers have taken on the Global Warming Lobby

with Not Evil Just Wrong. 

Polar bear populations have multiplied, the people are not crowding into the Empire State Building to stay above the rising water, and lots of people are losing jobs over anti=coal hysteria.

My point is that digital media has allowed other voices to be heard, this blog is a good example. Hysteria over the oil business has made Midland Odessa a virtual backwater of Texas culture, no one seriously considers moving there, the economy lurches from wild to mild on a regular basis. Indeed one of the best things about living in San Antonio is that I do not have to tell someone I live in Odessa and watch their eyes roll...

Take a look at the site. Here we will start on our own pro active environment change The graduate class will be constructing a case on replacing high water use lawns with natural cactus and other plants that sustain on their own.

More on GM Chrysler

John Crawley, Reuters  Published: Thursday, October 22, 2009

The biggest question in the turnaround of General Motors Co. is how it can overcome decades of insular management, the former leader of the Obama administration's autos task force said yesterday.

"A successful recovery is far from assured," Steven Rattner said about GM and Chrysler Group LLC, the two auto-makers the task force pushed into bankruptcy this year to prevent their collapse. But he sounded an optimistic note, saying the two are viable and have "every tool they need" to succeed.

Mr. Rattner also said the Obama administration was deeply divided over whether to fund Chrysler's restructuring in bankruptcy and whether the automaker could survive to repay the investment.

The investment banker, who headed the Obama administration's autos task force until July, also said he had been shocked by the "stunningly poor management" at both GM and Chrysler.

"Everyone knew Detroit's reputation for insular, slow-moving cultures. Even by that low standard, I was shocked by the stunningly poor management that we found, particularly at GM, where we encountered, among other things, perhaps the weakest finance operation any of us had ever seen in a major company," Mr. Rattner said in an account of his stint in the administration, published by Fortune magazine yesterday.

Mr. Rattner said the decision to offer Chrysler US$12-billion in emergency financing to restructure under the management control of Fiat SpA had been "a close call," adding that the administration was ultimately swayed by the view that allowing the automaker to liquidate would cost 300,000 jobs.

"The group was torn," Mr. Rattner said, noting that at one point key members of the autos task force had been split 4-to-4 on whether to offer Chrysler financing.

Mr. Rattner forced the resignation of former GM CEO Rick Wagoner.

"It seemed completely obvious to us that any management team that had burned through [US]$21-billion of cash in a year and another [US]$13-billion in the first quarter of 2009 could not be allowed to continue," Mr. Rattner said.

Relaxed Fit Workhorses

Jerry Flint suggests that we re brand gas guzzlers, after all we as a people are not Fiat 500 size folks. 

In the last few years pickup sales are down from 2.5 M per year to 850,000, a staggering decrease. 

I suspect the America you will experience the next ten years will be quite  a different place from 1982-2000.