Rick Wagoner?s Fatal Mistake

Justice Litle, Editorial Director, Taipan Publishing Group

Poor Rick Wagoner. The long-time General Motors CEO finally got the boot this week. Some would say he deserved it (including us). But he could have hung on, if not for one fatal mistake…

“What’s good for General Motors is good for the country.” We’ve all heard that one, right?

It’s actually a misquote… one of those legendary quips that gets around because the modified version sounds better than the real thing.

The actual source was Charles Erwin Wilson, head of GM in the early 1950s, during a question and answer session with the Senate Armed Services Committee.

The Senate wanted to know if Wilson would have any conflicts of interest upon taking a job as Eisenhower’s secretary of defense. Would he, Charles Erwin Wilson, in his capacity as defense secretary, be willing to make a decision that could harm GM for the good of the country if need be?

Wilson confirmed his willingness to put country first… and then added he could hardly imagine such a scenario coming to pass.

Thus came the famous (and oft misquoted) line: “For years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist.”

Kicked to the Curb

Wilson may have been correct at one time in his opinion that “the difference did not exist,” re, America’s interest versus GM’s.

But a difference sure exists now! It has become apparent, at least by Washington’s measure of things, that in order for America to rise up, GM has to go down. After months and months of socialism-lite and big business mollycoddling, the iron hand of discipline has finally made a showing.

I mean really, you have to love the irony of this juxtaposition:

• On Friday, March 27, President Obama met with the nation’s top bankers – including Ken “Pig in a Poke” Lewis, Vikram “Bandit” Pandit, and 13 others – for a carefully orchestrated “discussion.” (All sides described the meeting as “cordial” according to the WSJ.)

• On Sunday, March 29 – less than 72 hours from the tough-love banker-fest – Team Obama delivered the following loud-and-clear message to Rick Wagoner, the soon-to-be-ex General Motors CEO: “Pack your bags, buddy boy, and don’t let the door hit your a** on the way out!”

How’s that for a change in style and demeanor? You can’t make this stuff up, folks… Jekyll and Hyde have nothing on this White House.

Earlier this week, a Taipan Daily reader and VIP Inner Circle member suggested I should write Grisham-style novels about all the nutty stuff that happens in high finance. But you know what? Truth is more fun than fiction… if I tried to put a twist like that in a fictional novel plot, no one would believe it. They’d write it off as too crazy.

Now don’t get me wrong… I agree that Rick Wagoner (the now ex-CEO of GM) should have been canned. He should have been canned a long, long time ago. The guy handled his exit with class and grace, I’ll give him that. But really now – when your company loses a mind-boggling $90 billion, the share price falls from $70 to $2, and you’re still talking up incremental change in your media memos, it’s long past time for the ax.

No, the amazing thing in all this is not Wagoner’s long overdue White House-engineered demise. It’s the insane difference in treatment between Wall Street and Detroit, as displayed in back-to-back instances over a single weekend.

Let us gladly grant that automaker heads had to roll. Many months ago in these very pages, we called loudly for the resignation of Wagoner and his fellow dead-enders. I mean for Pete’s sake, both Toyota and Honda felt compelled to tap new leadership as a result of the crisis… and those two companies are actually healthy and profitable!

Wagoner’s Big Mistake

The funny (or not so funny) part of the deal is where Rick Wagoner went wrong. Not from a “running GM” perspective, but from a “saving Rick Wagoner’s career” perspective.

As the long-time head of a doomed behemoth, Wagoner had proved himself to be a championship-caliber contestant in the game of “CEO survivor” – where the objective is to keep from getting voted off gravy-train island for as long as possible.

Wagoner’s ultimate mistake, though, was to fail too small. He should have failed bigger.

Here’s what I mean…

For quite a long time, it seemed that General Motors had the lock on “fail.” In terms of a hopelessly doomed, dire outcome muscle-flexing contest, who could compete with the mighty GM?

Just look at the sheer scope of it all: The dying industry (coupled with a dying city)… the deteriorating quality… the vibrant competitors… the gigantic-epic-humongous pension obligations… the desperate suppliers lined up like domino chains… GM seemed to be the undisputed king of fail, with tens of billions in mounting losses to make the case.

But that was all kid stuff once Wall Street’s “weapons of mass destruction” (Warren Buffett’s pet name for derivatives) hit the scene.

In perhaps the most stunning instance of “top this” ever recorded in American financial history (or ANY financial history for that matter), the megabankers came along and made Rick Wagoner a mere piker. In comparison to Citigroup, Bank of America and the like, the GM failboat started looking like a dinghy moored next to an ocean liner.

And so the megabankers – the new undisputed champions of fail – wrangle themselves a high-profile meet-up inside the White House (as opposed to some other less “cordial” place), complete with smiling faces and post-chat photo op… while Wagoner gets tossed like yesterday’s trash.

Rick my man, you should have done it bigger… if only you’d had the gumption to, say, juice GM’s pension fund with 10 cubic kilotons of derivative toxic waste. You know, a couple truckloads of inverse-floater triple-leverage mega-mortgage reverse-collateralized AIG swaps. Something like that.

Ah well. Better luck next time… and let this be a lesson to all you other bailout-hungry fail-prone CEOs: This is America! Dream Big!!

A Tear for Detroit

One of the saddest aspects of all this – apart from the plight of the many auto workers and related auto industry workers who don’t deserve this – is what’s happening to Detroit.

There is a personal tinge to this whole saga: Your humble editor was born in Detroit. I still have relatives in Detroit and Ann Arbor. On top of that, a good chunk of family history is rooted in Grosse Pointe.

My connection to Motor City has grown tenuous over the years… having spent the last 11 years out West, I am now a Nevadan more than anything.

But I did get the chance to visit Detroit this past Thanksgiving. That visit included the opportunity to drive around and see the semi-apocalyptic conditions firsthand.

Believe it or not, there are some real insights to draw from Detroit’s automotive plight, and maybe a trading idea or two to boot (no pun intended). We’ll touch on those in a future Taipan Daily.


Justice Litle is editorial director for Taipan Publishing Group. He is also a regular contributor to Taipan Daily, a free investing and trading e-letter, and editor of Taipan’s Safe Haven Investor. He is the founder and editor of Taipan’s newest research advisory service, Justice Litle’s Macro Trader.

The Mistake of Not Using The 3 Kings of Internet Marketing

You want to get on Page One Google and Page One Bing and Page One Yahoo – the three major search engines at this time……and most importantly, you want to have a site that converts your visitors to customers. Right?

You have a killer website, great content and precisely targeted SEO planning with implementation (I call these the 3 Kings) But are they enough? If you do it right, the 3 Kings will include results in converting your visitors to paying customers.

Your internet marketing, like your other sources of advertising, should pay for itself, otherwise, why do it?
Now I know companies like Geico who spend over 70% of their income on ads to build a brand…….they have unlimited sources and are trying to get a name in the market, not unlike CocaCola has done. (Interesting note is that both Geico and CocaCola are owned by Warren Buffett who said of Coke’s branding, “If you had a hundred million dollars to spend on ads, I don’t think you could match Coke’s market penetration”).

We’re not talking about brand building here……we’re talking about being first to the market and capturing the customers! The internet is different than the outside world of interruptive marketing (radio, tv, billboards, etc.) It is a marketplace of directness, one where people are already looking for very specific information, products, and services.

Done properly, your internet marketing approach will bring your company and products to those who are already looking. Your goal is to surface among those who looking for your type of product or service!

The goal is to get your consumer to land on your page and purchase your product or service. Getting consumers to engage your website is not a liability or expense but rather a necessity regardless of the method used to drive traffic.

Getting to the top of page one Google and the other major search engines for your product entails exact strategies, SEO work and Internet Marketing that should pay for itself.

You have all the bells and whistles and the sizzle, and now, at the end of the day, it is still all about the steak and how many orders you get, how many leads were generated and how many prospects are in the pipeline.

Sometimes we forget to look at the big picture of search and fully embrace “the marketing part” of Internet marketing that is supposed to generate a return on your investment.

Increasing traffic is important but fine tuning your approach to make it about increasing the conversion rate of the traffic you receive is ultimately what it’s about. Let’s be realistic, SEO delivers traffic but what good is it if they bounce or never get to your ordering page?

What about targeting “your best page”? Engagement matters and the notion of “your best page” is a perspective that is unique to everybody who visits your website. But the idea is, this elusive concept and it may impede you from viewing each page as its own best landing page by infusing it with something more than just traffic and attention.

Combine that with the fact that even “that attention” will change based on the variable of the visitors original intent and mood. Are they simply there to window shop or research or is buying the intent or their visit?

With the advent of analytics our websites are like having a live litmus test running in the background around the clock. To see which pages have the highest yield of visits, traffic and engagement is no marvel. It is available to everyone.

If sales from your site is your objective, it’s important that you understand that SEO is only one part of the equation. Traffic must convert or you should change the format of your value proposition and call to action so that it does.

People either approve of your content, layout and design and invest enough attention to contextually extract relevance from your web page or they don’t.

Depending on how well you implement “the total package” (clear conversion objective, clear benefit to them) can illustrate and provide a solution to their problem or manage to hit an emotional or trigger.

If you make that the priority, then no amount of SEO will ever matter because each visitor that lands on each page will have a higher rate of conversion which it the basis of return on investment.

Getting to the top of page one in Google and Bing is great, but just makes sure that you have done your homework about who your audience is and what expectations they have when it comes to what they get and what you give.

At the end of the day, SEO should pay for itself. If it does not, then perhaps you should think about the most cost-effective method to sell whatever type of information, product or service you offer so that it does.

Killer web design, relevant content and properly executed SEO Strategy, all work together as a whole. Bring the 3 Kings to your internet presence and make it all work for YOU. Miss one and you miss maximizing your ROI and conversions.

Getting your website to page one in google is entirely possible and maximizing conversion is too! Hang in there! Call on the pros when you need them.

Here’s to your success!

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Marty Collins, developed a proprietary web optimization system that maximizes web ranking and usability. He is an entrepreneur and owner of Page One Marketing and Consulting and PageOneGoogle.Org and PageOneBing.Com, in addition to several websites and related companies. He works one on one with companies to get to the top. Contact him at mail@pageonegoogle.org

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