Steve Jobs vs. The Wall Street Protesters

              (not the way to get a job)

Steve Jobs, Apple co-founder, died today.  The first thing I thought when I heard of his passing this morning on my way to work, was, "Uh oh, there falls a keystone in the wall in the wall of American exceptionalism," meaning that America is losing the kind of wild imagination, when hitched to hard work and business genius, that spawned American phenonema like Henry Ford, Thomas Edison and Bill Gates. The tenacity of these characters, rooted in the free and rich soils of American society, sprung new products and services that changed the world and made America great . . . and hundreds of thousands wealthy.

For the past three weeks, protesters have occupied Wall Street, protesting everything from the profitability of banks to the Right-to-Work movement to corporate handouts.  I do not dismiss all of these grievances out of hand, as I strongly sympathize with the calls to end corporate welfare and the illegal wars overseas.  I'm also not willing to say that conditions are perfect today for finding decent work or starting your own business.  But 1976, when Jobs co-founded Apple, was much better?  Hardly.

Were Steve Jobs a 20-year-old at NYU today, would he be in a drum circle or marching for the right to have other people provide for his happiness or livelihood?  I don't think so, it would take time away from pursuing his goals. Look at the white sign in the lower right hand corner of this picture.  It says a lot about what's wrong with America today.

Steve Jobs dropped out of college to start a company.  He took a very large risk.  My ancestors packed up their stuff in England, Ireland, Germany and Lithuania, got on a boat to start over in country they'd never seen.  They took an even bigger risk.  Where is that kind of risk-taking today?

America, it seems to me, can only see rewards these days.  The unhappy coincidence of a faltering economy and the rise of global competition has made these rewards much harder to materialize.  I think we forget that between reward and risk comes the work of developing one's talents, merchandising them, relentless effort and making the most one can muster from whatever twe have.  Instead, America blames others for woes.  I myself am guiltly of this on occassion instead of focusing on what I can control most effectively: my own thoughts and behaviors.  We have the right to do so, but most are wrong in so doing. 

We each should feel a responsibility to develop our talents and make sure the world makes good use of them; in some cases, like Steve Jobs, we can become wealthy beyond our wildest dreams and literally change the world.  For most people, this means leading productive, peaceful lives in which we produce enough for ourselves, and even produce a surplus that provides for strangers (taxes or charity).  The protestors, now on their third-week of occupying Wall Street, may want to think about going back their job search. Or more likely, beginning one.

The Objective of PR Should Be . . .

To help an organization achieve its objectives. Period.  Sounds shiny-strawberry-on-the-whip cream obvious, but all too often, it is not.  In a recent meeting, someone said, "Why don't we do x?"  And why not?
X sounded interesting. 
X was cool. 
And depending on how X was configured, X could be developed in a way that would help this organization achieves one of its objectives.  Let's call this legitimate objective "Y."
"What should X look like?  How will we pull off X? Wouldn't X be cool?"
From square one, X should be challenged, "How does X support Y, precisely?"
I my travels, I find PR people sometimes focusing on X; Y is an afterthought, or worse yet, a non-thought. 

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I have a new client whose name I can use because I'm going to tell you how smart he is . . . because he actually is pretty damn smart, and has this focus on True North, on the Big Y, that is refreshing.  His name is Joe Verbanic.  He's the Marketing Director for OSRAM/Sylvania's Automotive Aftermarket.  In a recent presentation to him on our 2011 plans, we had objectives spelled out, except they weren't the exact right "Y."  After listening to our presentation, he calmly, methodically, asked us to go back to those objectives and asked us to remember what he'd told us when we first presented our capabilities several months ago on the our Automotive Practice.  His "Y" was the proverbial strawberry-on-whip cream: "Will It Drive Sales?" or WIDS?  Then we talked about lots of X's, or things we could do to drive sales.  WIDS had secured reserved parking in the front row of the meeting attendees' minds, and after discussing--as is so common in every PR ideation/planning session--how this X would work compared to another, we went through lots of cool, creative ideas and put them to the WIDS test.  Some super interesting ideas didn't pass muster, so they fell off, as they should have. 

Because cool ideas are not the point. 

Achieving Y is the point.

 X serves Y, not vice versa.

Occasionally we forget that relationship, or don't consider Y as we should in the first place.  People in these meetings on the agency side are then often afraid to say so of their own idea ("I don't want to contradict myself in front of colleagues and clients") or even scarier, the clients' ideas ("I don't want to challenge the client's ideas and upset them or show disrespect") or most sacrosanct, a co-worker's idea ("Bad politics, they'll think I'm angling for pecking order with the client or higher ups on our side of the table.").  But if Y gets lost, as it sometimes does, we have to have the gumption to ask the question . . . especially if you're convinced that it doesn't help the cause.

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By the way, Joe really wants to know--especially now that it's getting dark earlier--and earlier if you're satisfied with how well you can see driving to work in the dark or driving home at night.  If you're not satisfied, you do something about it for less than an hour or your time and $50 bucks or less.  If you want to see what real people say about these (in short they LIGHT UP THE NIGHT, but won't last as long as stock), check this thread which gives contains a pretty good assortment of real people's experience with them.  Sylvania has actually improved the design to make the more a bit longer lasting in recent years.

Let's thank Joe V. for keeping Y, our shiny strawberry, in our gun sights.  Y is the Master, the PR is but the servant.

A Tale of Two Turbos: Cruze vs. Jetta

Reuters has a good piece on turbochargers that ran yesterday that nicely sums up a good deal of the good on turbos, especially for the U.S. market.  Ten years ago, U.S. motorists enjoyed VW products that could get an honest 50 mpg highway (EPA said 49 mpg I seem to remember) from their stellar little 1.9l turbodiesel that went into the Golf and Jetta.  Decent U.S. compacts were seeing mid- to high-30 mpg highway.  Fast forward to today, and that gap between turbo gas and turbodiesel is quickly closing.  The ever-scrappy Scott Burgess of The Detroit News wrote a piece today on the new uber-fail Volkswagen Jetta (google the reviews, no one really likes it), which points out that the turbodiesel only manages 42 mpg, even though the engine has only gained 100 cc of displacement. 

 In Detroit's corner, the new Chevrolet Cruze will go up against the Jetta (and forthcoming, sure to be pretty competitive Ford Focus), and the Cruze Eco will get 40 mpg highway using regular grade pump gasoline and a very underspecified 1.4l gas turbo.  Pricing for the Jetta diesel was unvailable for the new model, but we know the Eco model of the Cruze will start at $18,175.   There's no way you'll be able to touch a new Jetta diesel for under $20K; even though they've made the car cheaper, the diesel adds a variable geometry turbo (as opposed to a simpler, waste-gate, non- variable geometry turbo), pricey high-pressure fuel injection (Cruze to use cheaper, less efficient port-fuel injection) and not-cheap exhaust aftertreatment that is far more costly than the conventional 3-way catalytic converter in the gas powered Cruze (oxides of nitrogen, and to a lesser degree, particulates--otherwise known to we wood-burners as "soot"--are still the bane of diesel exhaust).  Let's guess that the cost difference is $4,000.  Is $4,000 worth it for a 5% improvement on something that already gets 40 mpg?

Don't get me wrong, I love turbodiesels.  Diesel proponents would rightly point out that the Jetta would likely have 100 additional lb.-ft. of torque that would make the Jetta likely feel much more stout in daily driving.  But most consumers are not cross shopping torque ratings like this author.

My point: gas turbos, as pointed out in the Reuters piece, are likely to skyrocket in coming years.  Ford already said they'll offer gas turbos on 90 percent of their vehicles in coming years.  Full disclosure, GM and Honeywell are clients of my firm; I own neither GM nor HON stock.  That said, would I really like to own a Cruze turbodiesel, especially if they made a hatchback or wagon?  Hell yeah.

There's No Yoda in this Toyoda; Ill-Advised Move Mr. Toyoda

http://www.cbsnews.com/stories/2010/02/17/business/main6215315.shtml

Won't testify before Congress in their most profitable market. Big backlash to come. Watch this space.

Out of the Category and Into the Culture: Hankook Case Study

Most auto suppliers have a fairly easy time earning media placements in the trades: a leadership change, a truly innovative new product, or an executive willing to shoot his mouth off on a trend will do the trick. Then again, the trades are supposed to cover your company and your products if you actually have news.

But what about non-automotive publications? If you have a consumer-facing product or service, one that actually changes the driving experience appreciably for consumers, how successful are you at earning coverage outside of automotive?

We call this the move from category (auto media) to culture (consumer-centric media). Interestingly, the media relations tactics--the story angles, the pitches, the contextualizing of your story--will also work in many cases for non-automotive media relations . . . . you just have to be a whole lot more clever about how to throw your pitch.

Let's take non-automotive business media as an example. The following happened last summer.

Hankook, a South Korean company and the 7th largest tire manufacturer in the world, was bringing their CEO to NY for a few days, and wanted some business press exposure. Mind you, Hankook's stock doesn't trade on U.S. exchanges, they have a fairly small North American footprint by way of employment and zero manufacturing in North America. So why cover them if you're Business Week, Time magazine or any of the wires (Reuters, Bloomberg, AP, Dow Jones), without a whiff of hard news?

The answer: make the story bigger than Hankook, but first and foremost, find the story. Here was ours. "Between the low-cost, low-tech Chinese and high-cost, high-tech Japanese there emerges a low-cost, high-tech tsunami of aggressive business growth from South Korean, Inc. Samsung, Hyundai (the only winner of the 2009 auto sales "carpocolypse"), LG all came to become ascendant in the U.S. market by providing incredibly quality, incredible value and in many cases best-in-class warranty. The Japanese are scared, and should be. The Koreans are coming. And winning. Hankook Tire is no different. They are the fastest growing tire company in the world with the world's highest margins. They are the #1 supplier to the fastest growing market in the world (China). And oh by the way their CEO will be in NY on these two days, would you like to talk to him?" We targeted five specific Tier 1 business outlets in NY and succeeded in securing interviews at four. For this company, in that media market, that's a win.

Too many times, PR people will lead with "Company x has a new product, want to talk to our CEO (of a nobody company)?" Why would they? Companies introduce new products everyday, so unless your firm is launching the new iPod beater, journalists have more importance things to cover, like say Apple or Google. Great pitches, like any good story, have the ability to make people care. It's more art than science, but trying to tell a bigger story is always a good place to start.

On Independent Thinking and the Real Significance of the G8

Suffice to say that the Pontiac G8 has been receiving fairly stellar views for while now; click here to see thecarconnection.com’s “review of the reviews.”

Now there’s loose talk that the G8 will survive Pontiac’s demise as a Chevy or sorts, but GM (client) has not and will not confirm this. The enthusiast in me—as well the detached PR practioner—hopes they figure out a way to make this work.

The enthusiast loves this car because while everyone thinks “muscle car,” all accounts are that this is not the “beast-in-a-straight-line, but-I-wouldn’t-want-it-as-a-daily-driver/boy racer/aging-boomer-with-no-taste” car some might have guessed it would be. Where I live in Northville, Mich. (Ford country), I see a surprising number of these cars. I walk by one house every day that has a new-ish 5-series BMW in the driveway, and the G8 looks every bit to be its equal (the BMW I see, and the G8 I always see in the Cabbagetown area I live in are both white. . . nuanced menace. Dig it.) The PR guy likes it because making great product and creating "owner-advocates" is the best PR going for any consumer products company. I don't even own one and I find myself always talking about it.

Reports are that body integrity, structural rigidity, steering feel, brake feel/strength are all the equal of the benchmark 5 (people say Infiniti is coming up on BMW; having been in a recent G37, I don’t think BMW or Pontiac have much to fear . . . Carlos, check quality control bud . . . dash rattles? Come on, not in 2009). That the G8 has the beans under the hood to run with a 550i with the big mil is the least biggest surprise.

What I believe are the biggest markers of “quality” to most people in the showroom or on test drives. . . the whooomp with which the doors close; the body control and quick chassis recovery from railroad crossings or deep pocked Michigan roads; shutlines . . . the big Poncho/Holden can legitimately hang with the 5-series . . . that’s amazing. BMW can put a ton more money into pricey shocks, better/lighter/stronger structural materials, etc. because, well, it’s costs a lot more.

I think fans of GM should be elated, as should independent thinkers who believe that whoever makes the best cars should win; the doubters/cynics should wallow in some strong cognitive dissonance, because this isn’t about the G8 living on or not . . . it’s about having such kickass product development within the company that any GM product could and does compete with any BMW, let alone for at steep retail discount.

I owned two BMWs, a ’97 M3 and ’94 325iC. Both were great or good to drive, but horrifically expensive to own. If GM could make a G8-like car, this means they could make another car that equally baffled the cynics and delighted the open-minded drivers of America. Here’s to hoping they do (whoops, Camaro already is). Rock steady Tom Stephens, rock steady.

What Granholm Should Say, But Likely Won't

Daniel Howes lays out a very cogent, disarmingly fair and hard to dismiss outline for what Michigan’s Governor should really say tonight in her State of the State address.

Given that she can’t run again (ok, at least not for that office), and has done very little to right a sinking ship in the last seven years (movie tax incentives aside), she could do much to get religion on restructuring state government and taxes—albeit late—as her tenure comes to a close.

Read Dan’s recommendations here. I wonder what Chris Bzdok, Traverse City's Mayor Pro Tem, would add to his prescriptions.

Supplier PR at Auto Shows?

In the chaos and buzz that is social marketing in 2009, often lost is the idea that PR—especially in “old school” industries like automotive—is still fundamentally about helping clients tell their story to their most important audiences. For B2B in automotive, the wires (Dow Jones, AP, Reuters, Bloomberg, et al.) are still a big deal. Our Honeywell client was jazzed that we were able to pull this together:

Honeywell sees more demand for turbochargers Reuters

Of course, Honeywell had no real news hook. But they had a real story thanks to Ford's turbo news. I’m not normally a fan of trying to move supplier stories at auto shows: media are there for cars, not car parts. But high-value, highly-differentiated technologies like turbochargers or advanced lithium-based batteries can earn coverage if positioned as pieces of larger stories and trends.

By the way, where were the battery guys making news? Could have been like batting practice on Wii sports.

We can do it for movies . . . why not batteries? Or business in general?

Here in the D, there's been a serious uptick in movie making over the last year or so. Why? The State has been serious and aggressive about soliciting movie makers to come here, and moreover, adding serious tax incentives to make Detroit and Michigan a more attractive place to shoot films. The new Clint Eastwood movie that looks awesome (anyone who pulls an M1 Garand instead of a shotty out for home protection is not to be fussed with in my book, great gun) and was shot in and around Detroit because of it.

Is anyone else thinking that, "Hell, if we can get movies made here through tax incentives, how about doing the same--if not more--for advanced battery research and production." Or if full employment, and higher paying employment, is a goal of state gov't, how about incentivizing the whole state somehow? I'm told Michigan's business climate is one of the worst in the county. Let's change that.

I'd vote for L. Brooks Patterson. Would you?

B2B and Social Media: Yes We Can and Yes You Should

Quick: should social media be of interest to the old school world of automotive B2B public relations?

For about a year, I’ve struggled with this question, but now I think the answer is yes. My earlier doubts were only one-layer deep: were the powertrain purchasing folks at OEMs, for instance, really hanging out on Facebook? No, I concluded. But I may have been wrong in two ways I’d not thought of before.

1. The powertrain purchasing exec, in this case, may very well not be on Facebook, but maybe his direct reports are. Maybe the engineers who are technology consumers are. Maybe his boss is because his kids urged her to get on Facebook to stay in touch, which leads to . . .

2. Maybe in the last year, or just the last three months, he did finally get on Facebook in order to keep up with family, his kids, or just because he has other friends that he actually can keep track of (I think of my retired dad who went to Rose Hulman . . . he asked how I could find these people, and my brother and I over Christmas said, “Find them through Facebook’s Rose Hulman alumni groups.”)

But others who’ve thought more about this have five interesting reasons why this works for B2B. Read them here. This is by far the final word on this topic, and I suspect I’ll spend a good deal of 2009 refining how we use social media to help companies talk to other companies—and consumers—through these channels. Should be interesting.

December 2008: GM Beats Toyota

And now for some more (marginally) good news: yes, the Big Three got hammered in December for reasons everyone knows, but the big Japanese players fared even worse. GM was down 31%, Ford was down 32%, but Toyota was down 37%.

In these parts, we’ll take any sign that could be contrued as positive and breathe deeply. Not sure on the exact timing, but Toyota and GM might have both had zero percent financing deals running concurrently. Normally, if GM does much better than others—in this case, Toyota, but not Ford—it’s because GM had a massive incentive/giveaway that others did not, so this is interesting as Toyota had to pony up to the zero percent financing bar still fewer were ordering their vehicles relative to Toyota.

What’s interesting to watch closely are the subtle, if anecdotal, signs that the pervailing coastal sentiment of “domestics = bad; foreign makes = good” may be beginning to change. Read the comments sections of Dave Kiley's post on the Ford Fusion smoking the Camry Hybrid. The contrarians are starting to root for Detroit, and this is a trend that I suspect may continue as Ford and GM especially continue to make extremely competitive product.

In Case You Missed It, Some Good News for GM

For those of you that missed the action over the holiday, GMAC--GM's formerly wholly owned lending arm--received a financial infusion from the Fed that led them to offer zero percent loans on new car sales. You can rea more at David Welch's write up from New Year's Eve: http://www.businessweek.com/autos/autobeat/archives/2008/12/gmac_gets_a_gov.html

As everyone expects industry sales figures today from December to show more more serious sales declines, the effect of this should be allow more consumers to loan money for cars. The lack of credit in recent months has been a very serious problems for dealers and automakers; this should help remove at least one roadblock on the auto recovery highway.

Michael Moore weighs in on the Senate's failure to pass the auto loan

For once, I agree with Michael Moore. His take on the auto industry loan is worth reading, only if to the see the truth through one of America’s great storytellers.

Question for Richard Shelby: Can we call you Dick?

Richard Shelby: Can we call you Dick? If we may, then why, Dick, on Fox News recently, why would you lie—and then let people know you just lied—about your interest in helping foreign companies at the expense (via neglect) of the U.S. automanufacturers?

Wallace: Do you have as Sen Levin has said an agenda to help your local foreign auto makers?

Shelby: I don't have an agenda, but I'll tell you this, in the South, from South Carolina to Kentucky, Georgia, Tennessee, Mississippi, Texas, we have about 124,000 people employed in the automobile industry. They are competing. They are competing. GM, Ford, Chrysler can compete, but not under the model that they have now [Ed: that part is true]

124,000 is very specific number. Where did you get it if you don't have an agenda?

You know, Dick, the Hyundais and Toyotas and Hondas and Mercedes of the world come from countries where their Federal governments pay for workers healthcare. For better or worse, the U.S. largely does not. So when the Big Three could, they paid for their workers healthcare.

Wasn’t that terrible? U.S. citizens . . .or let me put this another way . . . voters, had their healthcare provide for if they got a job working for the Big Three.
And these same companies paid into large pension funds to help fund their retirements. I know Alabama workers would have like that, wouldn’t they?

Two points: one, the playing field isn’t level and GM, Ford and Chyrsler are very much trying to shed these legacy costs (lower standards of living for American blue collar guys, isn’t that awesome? I frankly do not want the guy next to me at the gas pump to make Chinese or Mexican wages; yes, the entitlement mentality must go, but I wish poverty on no one).

But you can’t just turn the spigot off, Dick; two mega forces (the formerly Big Three and the UAW) regrettably have to work at at rate I’ll call “hastened incrementalism.”

As Wagoner testified, the margin of labor costs between Toyota and GM will be essentially nothing come 2010. It’s happening. We all wish (except those UAW families) that it had happened sooner.

Point two: even though you’ve got some 100K plus employed by foreign interests in the South, the vast majority of the vehicles goes back to Korea, Japan and Deutschland AG. Dick, they’re foreign. That means the money, too, is mostly shipped back to foreign interests--that is non-American interests, Dick.

Yet you sit wobbly on your throne of sorgum on C-SPAN talking about the purity of capitalism, and how the beauty of it is that some companies rise and succeed and others fail.

But you didn’t point out that you interferred with the market by supporting millions in subsidies to these foreign interests by way of tax abatements(remember, if you believe the UAW, labor is only 10% of the cost of a new car, which means most of the money flows out of the U.S.).

To better understand the gross hypocrisy of Dick Shelby, undoubtedly ghost written for Compuware Chief Peter Karmanos by my former boss, read on. Jason knows how to make a point (and if you somehow see this Pella, Iowa, let me know what you're up to these days).

Today's Hero on Capital Hill: Jeffrey Sachs

Today’s superhero in the bridge loan debate on Capital Hill is Jeffrey Sachs of Columbia’s Earth Institute. This guy laid down such incredible smack not only some of the idiocy and hypocrisy on the Hill on the current crisis, but put the perspective on Citi Group and other financial giveaways that ballooned into the hundreds of billions of dollars with no strings attached with no calls for bankruptcy. I’m going to find his opening statement when it’s up and post it, it’s phenomenal.

Sachs pointed out something not yet heard that deserves attention: the auto industry is the largest industry in the U.S., and that governments globally are injecting billions into their own country’s auto industry. This guy just kicked ass (sorry Mom). Lucid, forceful, zero pretense . . . Professor Sachs, you Sir, were a surprise and delight of the first order. This guy salutes you.

Mark Zandi: New Detroit Superhero

This guy should be on everyone’s radar in Detroit, the Midwest and taxpayers in general.

Dr. Zandi broke it down in simplist terms: the bailout loan will be pricey, and could be even as much as $75M to $125M . . . but letting GM, Ford and Chysler slide into oblivion will cost taxpayers much, much more.

It’s that simple.

Detroit Goes to Washington, Take Two

This is how they should have gone to DC. Why didn't I/we think of this.

Mr. Scott has a bright career in automotive PR should he ever want to leave The Detroit News. I don’t think this would have changed the outcome ulimately, but if would have changed the tenor and welcome from Congress.

Panic in Detroit: Not Just a Bowie Tune

There’s no way around it. At this point, I’m pretty worried about our future.

As a PR guy who’s been try to help engineer consensus on different companies in the automotive industry for 12 years, it’s been amazing to watch the trajectory of the car companies and suppliers during this time. The last three years have been water dropping on a rock, slowly eroding my confidence in this town’s ability to compete. Circumstances, as they say, allayed their forces against us. But lest we not forget decades of horrible judgment, both of which got us here today.

And then über-industry watcher D. Howes drops this bomb in today's Detroit News.

That Detroit is going down is done; the question is what will it look like on the other side? Will Southeast Michigan look like one enormous sprawl of Canton/Akron, Ohio . . . a broad swath of decrepitude with homes priced as they were in the early 1970s with wages and salaries that match?

Even as GM and Ford continue to grow overseas—in many cases profitably—there’s only so many jobs in Detroit to be had going forward for essentially holding stewardship of the brands, sales/marketing and finances. GM has said that different regions will take ownership of developing global platforms, and North America/Detroit will retain fewer of those (B-cars will come from Korea; large rear drive cars from Australia, et al.). Design jobs, too, will be (are) widely dispersed as GM rightfully has said that designers in local markets should skin these platforms to tailor shapes to local tastes. Most people don't know that the auto industry until very recently was in great shape . . . just not in North America.

Detroit will be still smaller (remember, fifty years ago Detroit proper was 2 million people; today it’s less than half that size). Many of its best and brightest leave to escape the crime and “schools” the city has to offer (don’t believe a white guy from Lake Orion now living in Livonia, read this from my colleague Jacqueline Harrington on what it’s really like to live in Detroit . . . less than hopeful. Yes, she's African-American.)

We can keep working hard, and hope. On our hopes, here are a few of mine:

· The Joseph Goebbels-lookalike/rodent-faced/car industry-hating Henry Waxman goes three rounds of bare-knuckle boxing with local champion John Dingell. Waxman gets waxed by the senior Dingell on C-SPAN. It makes Sports Center. A sweet bronze statue goes up in Palace to honor the event.

· Detroit becomes the lithium-ion capital of the world.

· Gas prices stay under $2/gallon for five more years (I’m betting this won’t happen, get in now, buy me a beer in five years).

· The Japanese continue to mostly build excellent cars with forgettable or downright weird styling that turn people off; as cars become more commoditized and uniformly reliable, styling is what sells and Detroit gets its mojo back.

· The Germans continue to build overpriced cars that aren’t very reliable (I’ve had several; great to drive, terrible to own).

· Detroit comes back . . . property taxes drop . . . businesses move back in to the city . . . suburban people begin buying up the big mansions and turning many of the great downtown neighborhoods back into highly desirable places to live. There remains pockets of slums, but they grow smaller.

Feel free to add yours. If Obama showed us anything, it’s that sometimes big hopes can become bigger realities. While the lights are still on, keep hope alive.

Jim Cramer: GM Really Is Too Big to Fail

Here’s another reason why GM can’t fail as pointed out by the Mad Money’s Jim Cramer: the U.S. financial system “is riddled with GM [and] GMAC paper.” GM’s bankruptcy would lead to a meltdown in the trust of the U.S. financial system.

Not only are GM’s bonds everywhere, how many people own GM stock without even knowing it in or out of their retirement accounts?

Requiem for Pontiac

Another cyst erupted on the ailing corpus of Southeastern Michigan.
The hospital my brother Bryan and I were born in closed yesterday. It used to be called Pontiac General. 800 or so people lost their jobs. Poor people who already have a tough time getting medical care will now find it harder to transport themselves to a hospital. Meanwhile, new hospitals are spring up like mushrooms after a hard rain on the fertile soils of the affluent outer ring communities like West Bloomfield and Gross Pointe.

Just as stock markets rise and fall over regular intervals, just as human beings are born, live their lives and die, this year has really questioned my fundamental belief in this area. Pontiac isn’t in Detroit, it’s roughly 20 miles away but they have a lot in common. Pontiac holds a special, bittersweet place in my heart, and not just because I was born there or raised fifteen minutes north of the city in Lake Orion (I think they’re calling that Orion Township now, but no one did when I was there).

I went to high school there for two years at Pontiac Catholic. It’s now called Notre Dame Prep. I’m told it's good now. In 1988, I lead a minor defection of some of the brightest Lake Orion students back to Lake Orion’s public high school (Go Dragons) after my sophmore year there because the teachers were too busy with discipline issues: fights, coke dealers, thuggery, and the like. I got called to the principal’s office a month or so before the end of school. I thought I was in trouble for something dumb I did or said. Rather, he pled that I would convince the Chris Bzdoks of the world to not leave. I told him he failed us and that I was becoming dumber at his school. I was.

Pontiac saw a minor resurgence in the late 1980s and 1990s for having one street with a bunch of hipster bars on it. Like downtown Detroit, it was a cool area that comprised about one percent of the land mass, and yet people had the shortsightedness/gall to call it a “comeback,” meanwhile four blocks away from these tiny enclaves of bars and restaurants were endless blocks of decreptitude and shamefully abysmal high school graduation rates. 20 years later, Pontiac, regrettably, is mostly still an insolvent dump. North Oakland Medical Center's closing downtown is another sign of the same.

Notice that I don’t say “Michigan” is failing. Even though the current recession is hammering the entire country, the West side of the State is not faring anywhere nearly as poorly as the Detroit region. Hell, people in Kalamazoo can send their kids to college for free. How crazy is that . . . free college at any public university or college in the State.

I want to be optimistic about this region. The people here are really nice for the most part. Homes are affordable. There’s a ton of recreational opportunity, our parks are good, and we have the best city water in the U.S. (really, try the tap water everywhere that you go). But our enemployment rate is the worst in the country, our anchor industry is getting absolutely smoked right now, and many smart, affluent young people are leaving in droves (no, make that Civics) for places like Chicago, North Carolina, Arizona, Texas, etc.

Maybe North Oakland Medical Center closing means nothing. But in its dying, I know for certain that my children will not and cannot be born there.

To end on a lighter note, my dear mother Patricia shared a room with another young mother from Pontiac who also had just given birth. My Mom said, “So what did you name your baby?”
“Urethra.”
Stunned, my Mom said, “Oh . . .”
“Yes, well, I heard the doctor say that name and I thought it sounded pretty.”

I guess it could have been worse.