Blog: Detroit deadlock
Dave Leggett | 20 November 2008
I was just catching up on the latest news. Asian stock markets have followed the Dow Jones downwards, there's still political deadlock in Washington over the Detroit bailout and worries have intensified over the recessionary outlook for 2009.
It would seem that the markets have taken fright partly because of the deadlock over the US auto industry and are considering the implications for the US economy if no 'bailout' is forthcoming.
I reckon it will be, but politicians want to give the leaders of the Big 3 (or Big 2.5) a bit of a public going over first.
It's almost painful to watch as Wagoner/Mulally/Nardelli put up a united front and are subject to some fairly predictable barbs. It was inevitable though.
They may well have to offer their heads up, but I'm not sure that would be the right thing to happen. Wagoner was actually doing the right things before the rug was pulled by the financial crisis and the GM recovery plan was blown off course. Is one person to blame for an allegedly complacent corporate culture and the mistakes (always easy to identify with the benefit of hindsight) of the past ten years or longer?
Whatever the rights and wrongs of GM's leadership, the big picture is not throwing the baby out with the bathwater or political point scoring right now. It has to be loans with conditions and a commitment from all parties to deal with underlying structural problems so that lawmakers are reassured the money isn't being wasted. And that's in everyone's interests. I'd work it so they can access the USD25bn retooling loans already agreed to stave off immediate cash problems. And then a commission, or something like that, takes it from there with a more in-depth look in terms of what's next.
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