Fixing a Flat

Since having blogged about The World is Flat, I came across Thomas Friedman's comments on the Detroit bailout in his NY Times op-ed piece titled Fixing a Flat as well as the follow up titled While Detroit Slept.

It's really interesting to talk to people about the issue of the bailout (I've posted some of my views previously) - it's a really polarising topic. And as with most polarising topics, it's not nearly as simple as everyone wants it to be.

Yes, GM & Chrysler are terribly run businesses and need a kick in the butt more than they need taxpayer's dollars. But I suspect if you do the economic modelling (and I haven't), you'll find the ripple effect on the US economy (and therefore the global economy) would be pretty bad. Even worse would be the impact to confidence - a key underlying driver to the global economy - a point Friedman makes in an article on the GFC.

Another counterpoint (and an argument that also makes more than a little sense) is Jack Welch's article How to Save Detroit.

But rather than debate this more than already done around the world, let's take a look at Ford.

I think Ford and the work Alan Mulally has lead there (and no, I'm not suggesting Alan by himself did all the work) is what we should all be focusing on.

Just Google "ford alan mulally" and you can see some of the highlights:
Ford has renegotiated credit terms in advance of the GFC, started the painful process of downsizing, critically reviewed it's business, taken steps to increase the return on capital and focused on the product pipeline.

Alan himself was bought in from outside the industry to bring a fresh but experienced take on things. This is exactly what GM & Chrysler need to be doing now. I guess it's fair to say that Chrysler have bought in Bob Nardelli to do exactly that... but in my mind, the jury is still out of whether Bob can do that job in the time needed.

I'll end this blog with an interview with Alan on YouTube:

Labels: , ,

posted by Lee Gale @ 2:33 AM,


Post a Comment

<< Home