Tuesday, January 05, 2010

Corporate Irresponsibility in the Obama Era

As I type this first post in 2010 I am struck by the changes over the last year. More and more people have come to see Obama as the narcissist prat he is. Those that cheered for his entry into office have by and large found themselves wondering what in the world they voted for. One of the primary cases in point for me is Corporate Responsibility, or in many cases, Irresponsibility. Obama entered office with promises to get tough on large corporations that were spending money left and right, and promptly showed himself to be the liberal democrat he is.

The biggest failure of the Obama Era Financial Responsibility is found in the US Car Manufacturing Industry. The major US auto-manufacturers generally take part in the outdated practice of employing Unions, which foster environments where personal responsibility does not matter, and laziness is just as valuable as hard work. The Obama Administration and two of the major car companies, Chrysler and General Motors, successfully convinced the Liberal Democrats in congress that the US car industry was too big to fail. Well, sometimes large companies need to die properly, and doing so can be overall healthy for a market.

The auto-industry's leading example is British Leyland. Yes, Britain doesn't have much of an auto-industry left, with remaining brands Jaguar, Aston Martin, Rover, and Land Rover all having been sold to outside parties. However, the auto-industry in Britain is still booming when you consider the marques of Caterham, Noble, Lotus, Morgan, and Ariel. Sure, none of these cars sell in the volumes that a Land Rover Discovery or a BWM 3 Series sell in, but the British car industry is far from dead.

The Obama administration, however, worked in conjunction with the liberal democrats in Congress to keep General Motors and Chrysler alive. Ford Motors, as far as I'm aware, didn't actually take part in the bail-out, and the results were predictable. Consumers spoke with their wallets and when buying American Cars largely bought from Ford with the oft stated reasoning, Ford hadn't taken part in the bailout.

The Obama Administration's junker program was also a collective failure for General Motors and Chrysler's. Korean and Japanese marks like Honda, Toyota, Nissan, and Kia raked in sales of their new cars. Ford did pretty well in the junker program, with again, consumers voicing a preference for Ford because Ford hadn't participated in the bailout.

Failings of the Obama Administration continued, with GM pretty much failing to complete or close the deal on any one of their marques. While the Hummer brand was successfully sold to Chinese parties, I don't think it can be said that Hummer's actually ever sold in volume. Saab, Pontiac, and Saturn, 2 of which were General Motor's best car series, are gone. Granted, Saab was actually a Swedish company to start with, which explained their quality, but failings on the part of General Motors saw both Koenigsegg and Spyker pull out of potential deals. Saturn was also better known for it's Holden imports, and for selling rebadged Lotus's, and there actually is some hope that Holden will be moving some dealerships into the US. Thus, maybe not all is lost with the good cars Saturn put on the market. Then, there was Pontiac, which was home to the legendary Trans-Am. Okay, so Pontiac only had one good car, and it was built on Chevy's F-body platform, and it was several years ago. Maybe it's not such a bad thing Pontiac is gone.

The failure of the Obama Administration and the Liberal Democrats in congress was made readily apparent in early December as their appointed leader of General Motors, Frederick "Fritz" Henderson, stepped down. However, the saga of the Liberal Democrats inability to spend money wisely, or efficiently, has had an impact on other industries other than just the US auto-industry.

At an event that I was, not-surprisingly, not invited to despite it behind held in Georgia, Vice President Biden announced the first payouts of a rough $8 billion dollar plan to expand broadband Internet access. Now, I've had a look over the plan, and there's only one word for it. Rubbish. One of the major problems with the Obama Administration Plan, as I've read it, is that it's only for existing Internet providers with certain levels of existing subscribers. There doesn't seem to be any way for a small-town or regional provider to apply for the funds.

So, before I finish dealing with this problem, lets get the setup out of the way first. Where did this money come from? Well, because it's the US Federal Government doling the money out, the money obviously came from Taxes, or is going to be paid for by Taxes. There's actually a large amount of controversy here because one of the factors in the Obama 2008 presidential victory was the accusation that Senator John McCain was going to continue President Bush's War in Iraq with money he doesn't have. A big deal, at least from my point of view, was made over how the Senator, and for that matter the sitting President, were going to pay for a Military occupation. The Obama Administration rode into office on a wave of financial questions and promising Fiscal Responsibility.

What the US got, however, was an Administration whose financial playbook came from Marx, Lennon, Stalin, and a healthy dose of Roosevelt entitlement. So, once again, we have the Obama Administration, in conjunction with the liberal democrats in congress, promising huge amounts of money that at some point is going to fall on the American Citizen in the form of a tax.

There's the setup, here's the payoff. If the only companies that can take advantage of these broadband stimulus funds are existing ISP's with an existing subscriber base, why do they need the money to begin with? Isn't expansion and upgrading of the network part of an ISP's business plan? Isn't it something they budget for?

NO.

Thing is, I used to work for Cox Communications. Every year two headends on the cable network in Los Vegas and Pheonix Arizona would conk out in the summer. The heat would rise, and thousands of customers would get disconnected. There are of course a couple of logical courses of action. The first is to replace the headend with equipment that was built to withstand the rise in temperature. The second would be to split the headend into multiple newer, smaller, and more efficient units that could handle the traffic loads and heat. The third would be to do away with the headend and implement a Fiber network which is far more heat resistant.

So what did Cox Communications do? Nothing. Nothing at all. No techs sent out. No trucks rolled. Just tell the customer it should be up soon and take the next call. Thing was, Cox Communications business plan, and this is something I got told by a corporate rep directly, was to go in to areas that didn't have any competition. Thus, if a customer wanted Broadband Internet, they would have no other choice but to buy Cox Services, no matter how bad the service was. The corporate mentality of Cox Communications was so bad, that after Hurricane's Katrina and Rita, Cox decided to pull out of the area and largely sold off that market to Suddenlink. Cox Communications had no interest in upgrading either it's equipment or it's network.

The profit-minded mentality isn't just confined to Cox Communications. AT&T is one of the backbone providers of Internet access in the US, and their backbone services often left something to be desired. However, AT&T's mentality is revealed by a quick look at their Wireless Network, or lack there-of. AT&T is widely regarded as having the slowest and worst wireless network running, with only a fraction of the network having been upgraded to quote, 3G Status. However, AT&T pays an unknown sum of money to Apple Computer to retain exclusive sales and use of the Apple Iphone. Rather than spending money on it's wireless network, AT&T seems to be spending money everywhere else.

Comcast, often referred to in less polite terms, has an even lower opinion of it's users and it's networking options. Comcast has been slapped by both consumers and regulatory agencies for it's bandwidth throttling and invasive network scanning. Comcast contractors have been caught disconnecting competitors connections, then trying to sell consumers on the Comcast network while the competitor was down. In my own direct experience with Comcast, they came into town, bought up an existing cable provider by the name of Jones Intercable, then did nothing. No new lines, no new channels. Just a banner change on the TV and that was it. Now this was 10 years ago, back in 2000 when the deal was complete. There are still large sections of the cable network here, in my city, that are still running on the Jones Intercable wiring.

I think this is enough evidence to frame my point. Large Telecommunications companies are spending subscribers money pretty much everywhere but where the money should go. If AT&T had invested subscriber money back into their wireless networks, their 3G network would be as good as Verizon's or T-Mobiles. If Cox Communications had invested subscriber money back into it's cable services, they could have rolled out Fiber-Optic connections in heat-prone cities and kept thousands of customers happy, and perhaps have been in a position to lower costs since the maintenance on Fiber networks is significantly lower than those on copper and coaxial networks. If Comcast bothered investing their money back into the network, they wouldn't be in a position to say that users are clogging bandwidth.

However, because many of these large telecommunication companies have pretty much deliberately failed to budget their finances properly, they are now being offered, by the Obama Administration and the Liberal Democrats in Congress, a chance to dip into Tax Payer money to perform the network upgrades and expansions that their existing subscriber bases thought they were paying for.

The big question on many voter's minds right now then is whether or not the abject failures of the Obama Administration and the Liberal Democrats in congress will be remembered when the 2010 elections role around. Speaking for myself, I've no intention of forgetting, and every intention of pointing out to people who voted for Obama what a collossal mess that idiot and his friends in congress have made of everything.
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