Automaker GM announced last week that they their burn rate has been upwards of $2 billion a month, and in their current situation, could run out of cash by the middle of next year, if not earlier. They have asked the government for at least a $25 billion bailout to carry them through this economic downturn¹.

This is on top of the $25 billion loans for the “Big Three” U.S. automakers that the government approved in September to help keep the lights on². (It is important to note that they are requesting this new bailout because the other one will not come in time.)

I don’t believe they deserve this bailout, or any significant help from the government. There are three major reasons why I believe so:

1. Inability/refusal to adapt to changes in the industry and their competitors
2. Lobbying against bills for better fuel efficiency and emissions restrictions (which in part is caused by #1).
3. Lack of innovation

Those three reasons (variations on being lazy as a corporation) are why they are deservedly in their current position, and why the responsibility of getting out of this mess is theirs, not ours.

Slow to Adapt

Their downfall has been a long time coming. Their revenue year over year has been very lackluster, especially when put side by side with their competitors. Below is their revenue growth since 2004, compared with Toyota [³ ] [⁴ ]:

GM vs Toyota: Revenue Growth since 2004

Why does the chart look like this? GM’s massive costs in addition to their boring, uninnovative gas guzzler vehicles.

GM’s cost-per-car is much higher than their competitors, with the lion share going to it’s healthcare. Back in 2005, the cost of healthcare per car was $1,525 as opposed to Toyota’s $201⁵. Now, I’m not saying giving your employees benefits is bad, but the benefits costs for idle and non-efficient workers can cause these costs to skyrocket. According to the same NPR report, the utilization of their factories was at 85%, far below its competitor. In addition, it takes GM longer to produce a car than Toyota does. The writing on the wall has been there since 2005. They’ve had enough time to adjust.

Back in 2006, Toyota’s revenue grew faster due to it’s production of lighter cars and trucks, as opposed to giant gas guzzlers that GM was making⁶. As gas steadily became more and more expensive⁷, GM kept on making ridiculous fuel inefficient SUVs. Sure, the profit margins were huge ($10-17k per vehicle⁸, but when no one wants to spend $60 to fill up the tank, people will stop buying. $17k x 0 SUVs sold = $0! Simple math, yay! Meanwhile, other companies are building hybrids and smaller economical cars have been selling like hot cakes.

Lobbying against bills

I think that lobbying against better fuel efficiency and reduction in greenhouse gases is absolutely ridiculous and irresponsible. I find it abysmal that these large corporations are lobbying against something that can be proven to improve the environment and help fight this whole global warming thing and succeed in blocking or swaying legislation.

Even more ridiculous that they use arguments like this to prevent a 2007 Bill to restrict emissions:

This trial is about whether or not states have the authority to set their own fuel-economy standards. And we will argue that they don’t⁹

That’s complete bullshit. But good for them, they made a few bucks with their stupid SUVs and now they’re fucked. Congratulations, you’ve proved short term benefit is always best.

Lack of Innovation

If they didn’t spend so much time better fuel economy standards, they could have used that time to create better, lighter cars that can actually compete in the marketplace today. But no, they could sit comfortably on their fatasses letting their profit makers bring in the money. I was talking to my brother the other day (he knows a lot more about cars than I do), and he said that all of GMs brands make the same cars, just branded differently.

Thomas Friedman of the Times wrote a great Op-Ed the other day called “How to Fix a Flat“, which resonated with me a lot.

In the first paragraph, he refers to the $25 billion bailout in September. The Chrysler CEO claimed that the money was going towards a “way to enable the car companies to retool for innovation”. Are .. you … serious? What have you been doing instead of innovating? Where did all that money go?

Oh wait, right, lawyers can be very expensive.

Well, that money was well spent right? Hm, but wait you need more cash now? To what, innovate? Sounds like a well run business.

They shouldn’t get this money because it just gives them the right to continue with what their doing. I imagine it’d be hard for the government to really direct where this money is being spend and how these companies are run. Left up to the current execs, doesn’t seem like much would change.

He ends his article:

Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.

Where to Go From Here

As Phillip Greenspun says, let them go bankrupt. Chapter 11 bankruptcies are made for this purpose. It allows them to file for bankruptcy while keeping the company alive but let them reorganize their business. That solution makes complete sense to me.

Many say that if they do go bankrupt, consumers would not go near any GM car because of fears that the cars would not be under warranty, would have declining quality, etc. Again, Phillip Greenspun comes up with a pretty good solution, having the government insure their warranties instead of bailing them out.

Phillip Greenspun has been writing a lot on the topic recently. He goes through stories of him renting a GM vehicle and how terrible the quality and other related topics. Read his blog here: Phillip Greenspun

Job Loss

Now, the biggest issue with letting them go bankrupt is the massive layoffs, and the subsequent ripple effect across the nation. This is the part I haven’t really come to a conclusion to. It’s a very tricky issue. A lot of the people who would be laid off wouldn’t deserve to be. It wasn’t their fault that their company was mismanaged into the ground.

I feel like the people who would be laid off would be better off at a company that won’t be stagnant for years at a time like GM was. But in the economy, there isn’t much cash and not many places for them to go.

The loss of millions of jobs would be devastating to the already horrid economy. That would be the only reason why they should get the money, and it looks like they will because of this. It should definitely not be misinterpreted as helping out the company as it is saving the US economy from bottoming out.

President of Change

Looking forward, I believe that President Obama will bring great changes to the country. Not only is he an advocate of eliminating our dependence on foreign oil¹⁰ through alternative energy, he’s also taking a very public stance against lobbyist¹¹. Having him at least acknowledging these issues is a huge step forward in the right direction.

While this is still all just talk, I have confidence that he will follow through and that the US will be moving in the right direction once he gets into office.

1. G.M. Says U.S. Cash Is Its Best Bet [↩]
2. House Passes Stopgap Spending Bill [↩]
3. GM's 2007 10K report [↩]
4. Toyota's 2008 SEC Filing [↩]
5. GM vs. Toyota: By the Numbers [↩]
6. Toyotas profit rises, rivals GM [↩]
7. Energy Information Administration: Oil/Gas Information [↩]
8. SUV Fact Sheet [↩]
9. Automakers Challenge Vermont Emissions Law [↩]
10. Senators Introduce Legislation to Reduce Gasoline Consumption by Half a Trillion Gallons [↩]
11. Obama’s Transition Team Restricts Lobbyists’ Role [↩]

most people are what I like to call “dumb”. Current leader board?

1. GM
2. Lobbyists
3. Fixed income traders/structurers
4. People who voted for Prop 8

A lengthier, more in-depth post to come soon. Just wanted to throw this out there.

Just added Disqus commenting here. For those that don’t know Disqus is a hosted commenting service, which basically means all the comments on this site are handled by them.

I’ve had it over at my Tumblr for a while and it’s worked out pretty nicely. With the new Disqus WordPress plugin, it saves a copy of the comment to my WordPress database as well as the Dsiqus servers, so if I ever want to take it down, I won’t have to import anything.

This also gives some people (Jeff, Eric, I’m looking at you) a reason to sign up for a Disqus account (or at least get an OpenID so that their identity will be the same between these two blogs.

I just downloaded the wordpress app from the app store onto my iPod touch and thought I’d test it out.

As proof:

All from the comfort of my own bathr… I mean what?

So I will post about being green! Kinda.

About a year and a half ago, my sister and I walked into Watsons because she wanted some lip gloss crap while we were in Taiwan. After she paid, the cashier left the lip gloss on the counter. My sister stood there, a bit confused and stared at the cashier. Likewise, the cashier did the same. For what felt like way too long, the cashier realized that were standing there because we were waiting until she put the lip gloss in a plastic bag.

“We don’t offer plastic bags for free anymore. They now cost [25 cents USD] if you want a bag,” said the cashier.

This was the same throughout much of Taiwan, and I imagine many other places around the world. And I wonder why it isn’t more common. It seems like a perfect solution to be “greener”.

Simply:

• It is better for the consumer, store, environment, THE WORLD because we would all be using fewer bags, fewer plastic. SUPER GREAT FOR THE PLANET
• Better for the store because there’s no need to spend money on buying these plastic bags. I imagine large chains could save millions a year just by doing this.
• Paying for plastic bags I think is enough to make people bring their own bags when grocery shopping. And if priced right, if you just stop into a supermarket and need a plastic bag, it’s not the end of the world

I don’t really see any reason not to start charging for plastic bags. Well, maybe I do. It’d be supremely inconvenient for consumers, but for places like super markets where your purpose of going is to buy groceries, it won’t be hard to bring a couple of canvas bags with you.

Being a click-highlight guy, I was very intrigued when I read about Awesome Highlighter.

Awesome Highlighter is a company that provides a tool that enables you to go to a website and highlight information to save for later or share with your friends.

Here’s what TechCrunch had to say about the site:

Awesome Highlighter have focused on a simple task, and executed on it very well. Some of their competitors have overly complex processes that require a lot more user involvement than a simple and familiar highlighting and note making procedure.

I feel like that statement can be applied to any most genre of websites, and can explain why the successful ones succeed, the other ones go the way of the deadpool. I’ve commented on the success of Muxtape compared to other “mixtape” sites here.

Less is … less (that doesn’t mean bad!)

Creating a simple solution to a problem generally means having less of a feature set than other websites. And contrary to conventional thought, thats a good thing. I feel this is because people like to do what they want to do with the least possible resistance. One example of this happened a couple years ago at Columbia:

CU Community vs. Facebook

A few years ago, there was a website for the Columbia community aptly named CU Community (link to founders site). CU Community was a website that aimed offer a journal feature for blogging, submit news, and allow students to showcase their artwork. You could also request people to be friends to be a part of your network.

Although the CU Community and Facebook weren’t exactly the same type of website (CU Community was more of a mini-Deviant Art for students), I feel like in many of the students eyes, they were in direct competition. It was a way to connect friends on campus.

At the time, Facebook was in its original form; a simple website where you could be connected with friends. Back then, I don’t even think they had the “Wall” application yet.

For a while, the two sites were gaining popularity on campus, but eventually Facebook won out. There are many reasons for this, but one major reason is that Facebook had a clear message of “we are a social network.” Conversely, CU Community was a place where you could upload artwork, you could blog, you could create a social network with friends, but there was no real focus. There were just too many features on the website to focus on just one.

Reading

This idea of doing one thing and doing it well has been around for a long time. The Unix community has long held that ideal. From The Art of Unix Programming:

Make each program do one thing well. To do a new job, build afresh rather than complicate old programs by adding new features.

And more recently, 37signals wrote in their Getting Real book:

The answer is less. Do less than your competitors to beat them. Solve the simple problems…

This isn’t to say that adding features is bad. Of course not. But don’t add features if it doesn’t help solve the problem.

My buddy Jon has been prisoner to iMovie since we got back a week+ ago and has made two video, one from our trip to Taiwan and one from our stint in Hong Kong.

Trip to Taiwan: Healing Island

Trip to Taiwan from Jonathan W on Vimeo.

Hong Kong: Homage to Benny

24 Hours in Hong Kong from Jonathan W on Vimeo.

I love how little design decisions can make a huge difference. The tangible changes may not be big, but the impact is enormous. Here are two examples of good design and bad design:

Evernote Login: Remember Me

I’ve recently been checking out Evernote (watch the video) recently and it seems pretty cool so far. If you want an invite, I have 10 of them . It’s a pretty handy piece of software to keep track of random crap you encounter.

The login page looks pretty standard, username, password, remember me and submit. The beauty in the design here is subtle, but extremely useful. If you want to click the “Remember Me” button, you don’t have to click the tiny, tiny box. If you click the text, it checks the box too. This essentially quadruples the area that you can click!

It may sound obvious. It’s pretty logical to have the text be clickable, yet so many websites don’t let you do it. I don’t know how many times I’ve had to chase down that little checkbox just to select it. Making the text after it clickable is very simple to write in code; there’s really no reason it shouldn’t be clickable.

iPod Touch: Layout

A couple months ago, it was finally time to retire the iPod I had since high school. I had been waiting for a touch screen iPod to finally replace my old one. So far, I’ve been back and forth whether I really like it or not. Overall, though, I’m fairly happy with it. A lot of it has to do with it being gorgeous

One thing that has annoyed the bejeesus out of me is the placement of one of the buttons. It wouldn’t be such a big deal if it had more than two buttons. The iPod is shown below:

Now, this is a big problem when I want to do something craaaazy, like … put it in my pocket. The big problem is: which side goes down?

• On/off button – wrong. If it goes down first, it can potentially continually turn on and off whenever I sit down or even when I’m walking. I’m pretty sure there were a couple of times my iPod died much earlier than it should’ve because of this
• Earphone jack – also, wrong. This causes the base of the earphones I use to tear. Exhibit A:
  If they were on the same side, there would be no problem!

you can watch a whole season of “How I Met Your Mother” in one day? Not sure why I know, but It’s true.

For anyone who has known me for more than, I don’t know 10 minutes, would know that I am really lazy. I very much believe in the converse of the physics law “things in motion tend to stay in motion.” ie. if I’m sitting my ass in a chair, pretty be damn good to get me out of it.

However, recently, I’ve been oddly productive. I don’t mean at work either, but like in real life. What I’m referring to is some of the side projects I’ve been working on (exhibit a and exhibit b). Now, here’s a revelation I’ve come upon: It feels good to do stuff.

How does this relate to missed opportunities?

Muxtape.com has been getting some buzz around the net. It’s a pretty cool concept, upload a few songs, and be able to play the songs as well as link it with your friend. Simple problem, simple solution. Not trying too hard at all. It’s one of those ‘Web 2.0 startups’ that are bound to be bought out by a Google or Yahoo-types.

A few years ago, I had started develop this site called “hearphone”. Simple idea: upload a few songs, be able to play it, share the link with friends. Sound familiar?

I think part of the reason why I’m, you know, doing things is that it sucks that you miss an opportunity like this because you’re lazy. If you have a good idea, why not go with it? It sucks to regret not putting in the extra little bit to keep going.

Updated (05/08/2008 @ 9:37 AM): my thoughts about other “Mixtape” websites here.