Leadership and the Bully Pulpit
Michael Jackson (no, not that Michael Jackson) loves the bully pulpit. AutoNation’s Michael Jackson, we’ll call him the “non-gloved-one,” is everywhere these days. Officially, he serves as the CEO of the largest automotive dealer group in the US. Unofficially, he serves as the primary spokesperson for all curmudgeons who are good with a hammer (so they think everything is a nail).
MJ seems like a great guy – the non-gloved-one is well-spoken in an everyman sort of way – he exudes both a confidence and an “awe shucks” humility that seem genuine. Great traits for leaders.
Character (on the surface) does not appear to be his problem – Jackson, you see, is quite the character. Our issues with Mr. Jackson stem from his inability to wean himself off his love of the camera and microphone; and his incredibly narrow sense of how to fix what’s wrong with the economy.
It’s Not All about the Cars, Stupid
Certainly, it’s as prudent for this Michael Jackson to advocate for the auto industry as it is for that other Michael Jackson to advocate for unsupervised slumber parties at Neverland Ranch. We get it – your shareholders benefit if the auto dealers benefit – that’s your job.
To this end, Mr. Jackson is advocating (in a big, big way) for Congress to dramatically raise the gasoline tax at a time when Americans need every penny in their collective pocket. An increase in the gasoline tax? Are you serious?
Let’s put aside whether or not a gasoline tax increase will help his industry (though we think its benefit would be dubious, at best). Raising taxes in a recession would be disastrous for the economy, driving consumers to spend less and hurting the overall economic health of all retailers (including the health of car dealers) even more.
One could argue that part of the woes his industry faces today were directly caused by the very $4 per gallon gasoline he so desperately wishes would return. Jackson’s argument – that his dealers (and manufacturers) will sell more electric and hybrid vehicles with a huge increase in the gasoline tax – is probably a sound assumption… for the short term.
Leadership is more than a Great PowerPoint Presentation
Like Al Gore’s An Inconvenient Truth, Jackson appears to be crisscrossing the country looking for converts. We are not moved.
We cannot buy-in to his assertions that increasing taxes, especially gasoline taxes, is a good idea for what ails car dealers today. Automotive retailers, unfortunately, are selling vehicles today that are built better and last longer than their predecessors. This is really no different that a few years ago, of course. In 2006, when America’s car dealers sold over 16 million new units, consumers felt good about their present and future situations. They were willing to spend $30,000 on a new car even though their current vehicle was running just fine.
Buying a car in 2006 was a discretionary event; ripe with impulses and emotions. Buying a car in 2009 is a necessity event; driven by the need to get from point A to point B. Increasing the tax on gasoline (or raising any tax for that matter) makes any major purchase a necessity event. We will only buy a new car when it becomes necessary for us to do so; and if we purchased one of the 60 million new cars sold in the last four years, we probably don’t need another just yet.
This is why Jackson is advocating a hike in the gas tax. He believes that we’ll be forced to get rid of that 2006 Hummer once and for all. Okay Mike, once we trade in the gas guzzler for a Honda Civic Hybrid out of necessity, then what?
America’s car dealers, especially AutoNation, need Americans to make discretionary purchases to thrive and survive. Discretionary purchases cannot happen without discretionary income. Increasing taxes decreases discretionary spending; decreasing taxes increases discretionary spending. Sorry to break it to you Mike, but it really is that simple.
America Needs Higher Gas Taxes
From national security and environmental perspectives, we would love nothing more than for America to be 100% energy independent. OPEC, and especially the countries that make up OPEC, concern us. America cannot, over the long term, be dependent on “third worlders” for the growth of our economy.
Once our economy stabilizes, it may make sense to raise gasoline taxes. The revenues generated from these taxes could be used to make necessary infrastructure improvements; and the higher price of fuel, as Jackson notes, will drive consumers to purchase more energy-efficient vehicles. It will also drive them to drive less. All good for the environment.
In a recent podcast available on AutomotiveNews.com, Jackson even jokes that he could eventually become a Democrat with his drive for higher taxes. Really? Hey Mike, we’re sorry to inform you that advocating higher taxes probably makes you the Chairman of the Democratic Party today. Interestingly, in this particular podcast Jackson has moved off of his stance of advocating for the immediate tax increases, and has a newly stated goal of increasing these taxes in 2011 or 2012.
Hmm, then why shout from the rooftops for these increases in 2008 and 2009? Wouldn’t Jackson’s shareholders be better served if he lobbied for something that would actually spur economic growth? Perhaps something like a tax decrease?
As much as we like him, we have to tell this Michael Jackson to stick to moon walking and leave the economic decision making to someone (anyone) more qualified. Great leaders know when to use the bully pulpit and when to avoid it. They also understand that just because someone is giving you a microphone, doesn’t mean you should speak.