Traverse City Record-Eagle

Betty Werth

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December 7, 2008

Betty Werth: No bailout for Santa

By BETTY WERTH

In this serious worldwide economic downturn, did you ever ask yourself why Santa isn't on Capitol Hill asking for a bailout?

He faces a huge demand for product, a lot of it bought on credit, and has to meet payroll for his factories and delivery company just as the economy is frying faster than Frosty in Florida. It would seem that if anyone has cause to cash-in on a Congressional Christmas present, it's a guy who hasn't done any business since this time last year.

Yet Santa doesn't have his mitten out. Why is that?

-- No, it's not because he's imaginary. He's as real as the plight of those poor high-paid Wall Street banking executives.

-- It's not because he has cheap labor. Reindeer may work for food and shelter but elves are a specialty workforce and Santa has to keep them happy. If labor walks (expect short little steps), management will have to look high and mostly low to find highly skilled replacement workers with the small motor skills, the willingness to work 24 hours a day through November and most of December with little complaint, and the stature to stand behind their work.

-- And it's not because of lack of competition. Yes, Santa has a decent reputation, but some people don't believe in him and never will, and if he just once fails to call on Christmas his market share will crumble like a Christmas cookie in a kindergarten cafeteria.

No, Santa has to come through, recession or not, and I am sure he will. Know why?

He thinks small.

While the Big Three auto companies are turning into the Subcompact Three, Santa is living large off the biggest car company in America: Hot Wheels. That's right! An article by Keith Naughton in the Nov. 3, 2008, edition of Newsweek says Hot Wheels' parent company Mattel Toys has a "market capitalization" larger than GM which, based on my two semesters of econ back in '02 (you guess which century!) tells me something good is happening for somebody!

Naughton says Hot Wheels does $1 billion yearly in global sales and last year, while the Big Three got nothing for Christmas, Hot Wheels' sales rose 16 percent! Yes, Santa and Mattel have found their niche (North Pole); filled it (they're big into small); and found that the tighter money gets, the more people turn to toys. But Ford, GM and Chrysler could definitely learn something from the Fat Man by taking a page from his Hot Wheels business plan and finding someone who can read Elf.

As far as the rest of our economy is concerned, Santa doesn't have established operational patterns for making toy banking and insurance products, because kids don't play at that ... unless you count the game of "Monopoly," in which the winner drives everyone else out of business.

Hmmm.

I guess when it comes to toys and Christmas, he's got that covered, too.

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