The Auto Industry Is Radio

The auto industry and radio have a lot in common.

Let's start with the most important things first -- flying private.

The big three automakers went to beg Congress for $28 billion in stopgap, bail out money recently and they hit Washington in style. The heads of Ford, GM and Chrysler all showed up on private jets (and limo rides to Capitol Hill).

I always say, if you're going to beg, go in style.

Some of the companies said flying private was for safety reasons?


Northwest isn't safe?

Ordinarily it is probably none of the public's business how CEOs choose to travel unless, of course, taxpayer money is being requested to keep them afloat.

Many of the radio CEOs fly private even as they complain about the economy, fire people, cut budgets at radio stations and just can't seem to find the money (or resolve) to get into digital media in a meaningful way. Taxpayer money isn't paying the freight. The shareholders are. And apparently these see-no-evils don't see anything wrong with stock prices under $1 and their CEO geniuses avoiding the incivility and inconvenience of flying scheduled carriers.

Now that I got the important stuff out of the way, here's a trivial item -- I suppose.

Automakers have been able to finagle their way out of building fuel efficient, green cars. That's why shipping docks are overflowing with cars local dealers can't sell and don't want. Yet you can't find a fuel-efficient Prius for a discount.

In other words, Detroit has had no vision or willingness to see the changing market. That's funny because Japanese automakers have. They build fuel efficient and increasingly environmental autos.

The American automakers want a bailout that doesn't restrict them from spending the money on building fuel efficient cars. The president backs such a plan. So, the bigger sin is that even after getting themselves into this fine mess they are in, they still aren't visionary enough to know now is the time for change.

Take radio, their leaders will assassinate the character of anyone who dares to say that terrestrial radio is on the decline. After all, it's just a glitch. The Internet is a mirage. There's a recession -- that's it. We beat the age of television and we can beat the Internet, too -- damn it! Unfortunately, none of them -- that's spelled none -- have built a bridge to new and generational media, the kind that is taking the world by storm. Instead, it's towers and transmitters.

They want to sell ads in between talk or music because that's the cleanest, simplest and least complicated way to build a free cash flow bonanza -- never mind that the party is over. The world has changed. Advertisers have changed.

But the radio industry has remained the same. One suspects that these radio CEOs actually think that they haven't done anything wrong.

Automakers have laid off tens of thousands of skilled employees due to their inability to direct their companies toward the evolving marketplace with consideration of the world economy. Their employees, the ones who build the cars and make their products, must now pay the price while CEOs take their bonuses and inflated annual paychecks and while their lawyers insert clauses that say they must fly private for safety reasons.

When radio fails, the CEOs are immune from repercussions. They get to fire everyone else but themselves. No one including their our boards of directors will hold them accountable. The people who made the product that they profited from when they went public now have to pay for their bosses mistakes with their jobs.

It's not business economics. It's nonsense.

Over the years that led to today's economic crisis, the automakers had successfully lobbied for consideration from Congress so that they would not have to meet higher standards such as tough emission laws (as they have in California) or MPG improvements on a progressive, yearly basis.

In other words, they have been coddled by the lawmakers to let them off easy even though it was not in their best interests in the end.

Radio and it's lobby group, the NAB, won passage of The Telecommunications Act of 1996 that was the instrument that allowed consolidation. They bought up competitors at a record pace. Mini-monopolies were created in the interest of deregulation. In fact, they had hoped to win a second law enabling further deregulation to tighten their control over local radio markets which never materialized.

Turns out consolidation was not in their best interests. As I said back in 1996, these CEOs cannot run that many radio stations successfully because radio is a local mom and pop business -- not a national, investor fed money machine.

Some politicians are saying that the automakers should just be allowed to go bankrupt and the free market will fill the void. That means Toyota comes in and increases its market share because Toyota is smarter.

By the way, the Japanese have the best auto workers in the world.

They are called Americans -- and they are building high quality cars in this country under the leadership of managers who know what they are doing.

The big three autoworkers are often blamed for building inferior quality vehicles.

Same workers -- Americans.

Different leaders -- selfish, destructive and without vision.

Doesn't that also describe the radio industry today?

There is no need for the radio industry to be on the decline. It should be leading the way into the digital future (that is, not just streaming terrestrial stations online). They need to be investing at least 20% of its budget in new and generational media -- with more earmarked for subsequent years.

It is unnecessary for radio to be on the decline when it has skilled workers who are capable of building the digital future to compliment its existing terrestrial platform. Just as Americans are quality workers for Japanese automakers, radio people could be the absolute best resources for new age CEOs who actually grasp the digital future.

A lot of radio's CEOs are old, tired and out of touch. They haven't run a station in decades and they know nothing about new media other than how to work their own personal Blackberrys.

I'm thinking of writing a piece next week on a radio tactic that can be embraced by those great and talented radio workers who have to suffer fools to keep their jobs.

It's about one easy to implement strategy that can build a station -- even in hard times -- and doesn't have to cost money.

If I throw the idea out there, watch some of the smart people in radio run with it -- and their bosses will never even know what happened.