The Auto Industry Bailout

Integrative Leadership or Not?

The 6 Reasons why the Bailout was NOT Integrative Leadership

1) Influential champion2) Authenticity3) Backbone organization4) Power balance among coalition members5) Common good6) Common language

Background

What happened to the economy in 2008?

Who was responsible?

How did this impact the auto industry?

What was the bailout?

Source:http://mije.org/richardprince/writers-tie-blacks-fate-auto-bailout

Who knew….Canada too!

http://www.theglobeandmail.com/report-on-business/video/video-auditor-general-auto-industry/article21759719/

Integrative Leadership

Framework

Model

IL at the Organization Level?

Yes…Big 3 get money and save some jobs

Government makes the deal ultimately subsidizing UAW compensation for $26.5 billion (More than government 2011 foreign aid)

Big 3 salvage auto way of life and are able to stop the bleeding?

IL at the Organization Level?

Yes…Big 3 get money and save some jobs

Government makes the deal ultimately subsidizing UAW compensation for $26.5 billion (More than government 2011 foreign aid)

Big 3 salvage auto way of life and are able to stop the bleeding?

BUT…Ford did not actively participateDeal is reactionary, forced

City of Detroit fails to initiate coordinated recovery response and focus on restructuring over paid labor costs as well as current demand for desired automobiles

Transplant auto workers paid less than UAW outside of Detroit are able to sustain.

Was Ford a leader or defector …

YEAH... likely both… Leader?● All three companies needed to survive the

bailout in order for the US industry to survive?

● The supply chain of suppliers to the auto industry is critical to the balance of the ecosystem?

● A functioning auto manufacturing system is important to national security?

● Ford had to support the bailout regardless of its intention to take the help

http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-on-bailouts/

Was Ford a leader or defector …

YEAH... likely both… Leader?● All three companies needed to survive the

bailout in order for the US industry to survive?

● The supply chain of suppliers to the auto industry is critical to the balance of the ecosystem?

● A functioning auto manufacturing system is important to national interest?

● Ford had to support the bailout regardless of its intention to take the help

BUT… Defector?● Was there deception in lobbying for the

bailout and not taking it?

● Does Ford have an unshared advantage for not taking the money?

● Is Ford not playing fair as Ford advertising turns against competitors for taking the bailout?

● Ford did receive 5.9B in government loans and lobbied for cash for clunkers

“In other words, Ford was for government bailouts before it was against them.”

http://www.factcheck.org/2011/09/ford-motor-co-does-u-turn-on-bailouts/

IL at the Group Level?

Yes…

Factory motor parts manufacturers coming together to support the auto industry by increasing production

Detroit community colleges changing their education to focus on other educational endeavors

IL at the Group Level?

Yes…

Factory motor parts manufacturers coming together to support the auto industry by increasing production

Detroit community colleges changing their education to focus on other educational endeavors

BUT…

While overall bailout supposedly saved jobs, there were still thousands of displaced workers

Wasn’t a coordinated effort with the rest of the city to address poverty and economically stressed families

IL at the Society Level?

Yes…Taxpayers diffuse the impact of corporate irresponsibility

“What’s good for Ford is good for America.”

IL at the Society Level?

Yes…Taxpayers diffuse the impact of corporate irresponsibility

“What’s good for Ford is good for America.”

BUT…Taxpayers diffuse the impact of corporate irresponsibility without a vote

The bailout did not flow through different levels of society. Example - Detroit

What about Social ROI?

Sure?....GM Example:● Cost: Estimated government lose on

GM alone = 11.8 billion

● Savings: Billions in social security costs, lost tax revenue and lower spending

o 130 billion dollars in personal income - 1.8 million GM jobs saved over 2 years 2009 & 2010

● Estimated net impact is a positive $39.4 billion in bailing out GM alone.

http://blogs.wsj.com/corporate-intelligence/2013/12/09/did-detroit-receive-americas-most-successful-bailout/

What about Social ROI?

Sure?....GM Example:● Cost: Estimated government lose on

GM alone = 11.8 billion

● Savings: Billions in social security costs, lost tax revenue and lower spending

o 130 billion dollars in personal income - 1.8 million GM jobs saved over 2 years 2009 & 2010

● Estimated net impact is a positive $39.4 billion in bailing out GM alone.

Well, Really?

● If you can calculate a social ROI on a problem of this size should you?

● Where do the calculation boundaries start and stop?

● How does a positive Social ROI in a global ecosystem relate to the local needs?

● Who are the winners and losers?

http://blogs.wsj.com/corporate-intelligence/2013/12/09/did-detroit-receive-americas-most-successful-bailout/

The Money Question

Yes Money?

Was this whole thing just about Money?

And:

Is Money …?… the currency… ?… of the common good?

“There’s plenty of money out there. They print more every day.” Willy Wonka and the Chocolate Factory

“Money, its a crime. Share it fairly, but don’t take a slice of my pie” Pink Floyd

Questions

1) Where were there opportunities for integrative leadership to arise at the sector, organizational and group level?

2) What could have legal, policy, education, business and public health professionals accomplished together at the community level in a city where the auto industry failed?