Capital assets vs Intellectual assets

As we see companies which were previously called “blue chip” fall down one after the other, I was looking to see if there is commonality between them and came up with the following observation: most have substantial funds tied up in legacy agreements or capital assets which are not reflective of today’s business realities.
GM is one case in point. Tons caught up in their legacy distribution and branding model (many brands for same items), factories that have lots of improvements required to catch up to the manner in which Japanese car makers run theirs (with far fewer workers, they put out far more cars per employee) and with brands that have suffered in recent years due to the image flip (japanese now better than american), these are companies stuck in the past.
When I decided to offload the factories which ICP Solar had built or acquired it was because I learned that the value of the capital asset today is far less than the value of the intellectual asset (your brand, your products, your vision). It is in fact the root of ICP Solar back in 1988 when I founded it, to be focused on product and brand development. Being now in that mode, ICP Solar’s future is assured, with or without the potential merger to Ibersolar (announced earlier this month).
My fear for the current economic situation is that government rarely runs things better than the free market and so the injections are being put left, right and center yet must be done in a manner to reward or protect the productive sectors of our society. If it is done to protect legacy sectors which have no future, it is throwing good money after bad. If it is done to help those sectors reposition and then ensure a repayment to society which is equitable, then by all means protect them now yet hold them accountable for the future. CEO’s of such companies should be taking substantial paycuts or moving aside to let those that have a history of addressing the issues I mentioned above with proof of delivery.
It is not an easy time for most, yet with the largest order book at this period in recent history, ICP Solar is poised to capture market share in an increasing market. We believe that the funds being pumped in by various governments around the world will eventually reach those in need and help to stabilize things, yet the only assurance of a positive future is if there is a mindset change in those industries in which we depended on and a focus on the new industries, such as renewable energy, where the new jobs will come from.
Sass

2 Comments

  1. Trip Young says:

    Sass,
    Great posting. I would agree that the government needs to truly evaluate their ballouts of legacy sectors and the rationale behind such moves. The Solar and broader Alternative/Renewable Energy sector could certainly benefit from such a backing; whereas I am wary that GM would re-position themselves without a change in Senior Management. Nevertheless, ICP Solar is well positioned to capitalize on the wave of growth I see coming on the horizon.
    sass comment: thanks trip. indeed we should be out there with our hands out too, and i think that they would be better served to invest in renewables than in autos…

  2. Ken Roots says:

    Hi Sass…Sorry for the late post..I just discovered your company on Linked In and have found your blog to be insightful and very relevant.
    I agree with both you and Trip…unfortunately it seems that both industry & government get caught in a loop whereby they make the same mistakes repeatedly, each time expecting different results.
    Isn’t that one of the definitions of insanity?!
    I read that $54B will go towards green tech industries – if true, it’s a good start…certainly a better place to put taxpayers money than into the banks that caused the mess in the first place. They were supposed to open the credit gates with bailout money but none of them have done so yet.
    You commented above that you offloaded your mfg…how so? If you find yourself looking for strategic help in improving TCO for your product development & production, I may be able to help you.
    Keep up the great blog and the wonderful work you’re doing for the planet and humanity at large!
    Ken

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