BusinessReport.com

I got an interesting e-mail last week from Michael Manes, a consultant who wrote to share his experience in 1978 as a representative in Louisiana for the General Motors-sponsored FAMEX Insurance Program for dealers. He would travel to visit dealers, where he found that insurance was not their concern at the time—government intervention was. Manes wrote, “In 1978, what kept GM and her dealers ‘up at night’ was their concern that if GM obtained 65% market share Uncle Sam would step in and break up the family.”

Thirty-one years later, the government is intervening, but in a different way. The headlines read, “GM likely to seek bankruptcy.” You and I, the taxpayers, will soon own 70% of General Motors ... or should I say, “Government Motors.”

Manes claims, “Reasons cited for the collapse of GM are numerous—poor management, shoddy workmanship/poor quality, legacy costs/unions, failing to anticipate needs of the marketplace, and foreign competitors. The bottom line is that GM didn’t make profits. Now ‘Uncle Sugar’ is going to fix that.”

But will the cure be any better than the disease? Oh, don’t get me wrong, GM is in desperate need of help. I thought that months ago when the boys from Detroit flew into Washington on their jets, asking Congress for billions. I thought, “Their model is broken and more money won’t fix it.” I told friends, “They’ll be back for more. And what Congress should do is let nature take its course.” Now they’re back, and they want us to buy in.

Manes and I agree: If poor management is the problem, how is putting government in charge going to fix it? The government failed in its responsibility to regulate the financial services industry that just collapsed and was bailed out by taxpayers. Where is government noted for quality of service or effective management? A little help from FEMA, anyone? Are government-run schools better than private schools? It’s astonishing that anyone believes the government will do a better job running GM.

Maybe the G in GM now stands for Government, but Manes predicts it will soon mean GONE—a once great company and our tax dollars.

Streamline government

One of the bills moving through the Legislature is critical to our future. Because tight budgets will be with us for the next couple of years, operating things the same way we always have in state government will just mean continued budget battles in each legislative session pitting higher ed against health care or K-12 or roads. And the status quo plus inflation costs is a recipe for disaster. Just ask General Motors. You see where that ends up. That’s why Gov. Bobby Jindal’s initiative to create a commission to streamline government—picked up by Sen. Jack Donahue’s Senate Bill 261—is so important.

The commission and its final proposal could become a major part of Jindal’s legacy. The idea is to reduce the size of government and improve its efficiency. This could involve proposals that restructure state institutions [including higher ed] and eliminate programs. The commission will include some lawmakers, agency heads, business leaders and others who will have six months to create a plan that will be presented to the Legislature.

So why do I think this commission is so important? The fact is, private business has to adjust and make changes all the time due to market forces and competition. Government does not. But it should be capable of flexibility and change. This is an opportunity to bring needed change to survive and improve.

Here are a few comments Jindal made to the Times-Picayune to explain the purpose and intent of this effort:

• “I’m not looking for some vague five-year plan. The goal is to look at every one of these agencies, every one of these programs, all across government, every dollar that we spend. I don’t care if it’s constitutionally protected, statutorily protected. No sacred cows. Nothing’s fenced off. They’ll look at everything that government does, funds: everything we do.”

• “It’s absolutely important that, given the budget challenges we face, we also use it as an opportunity to fundamentally re-examine the way we organize our government. We’re looking for ways for us to be more efficient, to be more effective, to reduce the size and the expense of government.”

• “My challenge will be to anybody who opposes the recommendations is to come up with your better alternatives, because we’re going to have to make changes. The question is not whether we make changes, it’s how we make changes.”

In addition to this bill to create the commission, Jindal also has bills this session to change the civil service system and create a new financing formula for higher education [proposed by the Board of Regents]. The plan involves funding incentives based on graduation rates and performance measures instead of just student population.

Jindal told the Times-Picayune, “All three are aimed at taking a fresh look at how we are going to spend our money, in order to make sure we’re doing things as efficiently as possible to get the best impact for the dollars we spend.”

The higher ed plan drew praise from University of New Orleans Chancellor Tim Ryan, who told the Times-Picayune, “If what the governor said is implemented, I think it would be a major improvement in the way we fund higher education. It will be based on what you do, rather than what has been a politically based distribution.”

But none of this will be easy to pass or implement because so many have so much invested in the old way of doing things—and they won’t give up turf without a fight. But Jindal seems ready to do battle. As he said, “The hardest part of change, I believe, is convincing people that the status quo is not good enough. The status quo is not an option. This is why I ran for office.”

Save Alligator Bayou

There has been a recent controversy involving Alligator Bayou and the elected officials in Ascension and Iberville parishes. A landowner who wants to create a wetland mitigation bank is also in the mix. It all centers around opening the flood gates and the level of water. I am siding with Alligator Bayou.

Entrepreneurs Frank Bonifay and Jim Ragland took a risk many years ago and have labored to save something special in our region. The beautiful cypress swamps they have preserved for wildlife and tours [for tourists as well as school children] should get the nod, and the public, and other officials, should support their position.

Save Chelsea’s, too

Chelsea’s restaurant and bar, located under the Perkins Road overpass, is in a battle with Alcohol and Tobacco Control as to whether they are a restaurant or a bar. This is a successful business that provides original music and popular indigenous food and attracts the young people we want to stay in Baton Rouge. The mayor, Metro Council, Baton Rouge Area Chamber and our legislative delegation need to find ways to help Chelsea’s survive—not watch them go out of business.

Congratulations

Let me extend my congratulations to the 2009 Influential Women in Business. Check out their stories here.

Wise words

In prosperity, our friends know us; in adversity, we know our friends.—John Churton Collins