Quote of the day – WSJ
Opinion Journal: "
Forcing us to save GM, Ford and Chrysler is to force us to buy what we have already decided we do not want. That's about as un-American as you can get." – reader Paul Cooper responding to "
Bankruptcy is the perfect remedy for Detroit."
2 comments:
I admit, in a perfect world bankruptcy would, in fact, be best for Detroit's Big 3. I also agree that there's a lot of opposition to it, both from politicians and the CEO's of those companies. That alone ought to tell us something.
Back in the late 70's/early 80's, when Chrysler had to take what was then the biggest federal bailout of a private-sector company ever, the situation was a bit different. Lee Iaccoca had been an up-and-coming wheel at Ford prior to taking the driver's seat at Chrysler. While I'm not a fan of Mopar, I have to admit that seeing Iaccoca's drive even then to fight the ossification of the industry was pretty inspirational. Would that more auto execs had learned from his example.
Getting back to point, the first auto bailout had protections built in for both parties above and beyond those normal bankruptcy proceedings call for. The upshot was that Iaccoca was responsible for getting Chrysler to pay off its federal loan within 7 years (well ahead of schedule) by getting the UAW, primarily, to rethink its approach (ahem) particularly where Chrysler was concerned, and creating much more spending oversight than that company had seen before.
Regrettably, none of today's CEO's come close to resembling Lee I. As I remember him, Mr. Iaccoca -- while not entirely a humble man -- didn't flaunt his wealth or position anywhere near the level this current crop of execs do. He didn't possess the same arrogance and myopia this bunch does, for sure. He was well aware of the dangers his company faced from foreign competition, as well as excellent insight into what the future would hold for the industry worldwide.
Don't get me wrong -- I don't hold Lee I as some kind of divine authority to be worshiped and glorified. He certainly had his faults and made his own mistakes along the way. I do, however, remember his example; and while still imperfect, realize how what he did during his proverbial 15 minutes not only set an example but kept the industry going during a really rough stretch. Long story short, the bankruptcy worked for Chrysler because of the real leadership embraced and exemplified by its CEO. I don't see that happening this time. At least not without far more radical modifications than what conventional wisdom holds we should expect.
I keep thinking back to when Ross Perot was on the board of GM. He asked far too many difficult questions and didn't accept B.S. answers. Eventually they bought him out for $700 mill, then continued their steady decline into bancruptcy.
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