Blog: Dave LeggettObama administration and Detroit

Dave Leggett | 5 June 2009

I have just read something that puts some of the turmoil going on in Detroit and the Obama administration's handling of it in perspective.

What's going on is, of course, painful and it is hardly surprising that there is controversy and disagreement at every turn. Many in Detroit also resent the involvement of 'outsiders' who aren't car guys (er, right, like the car guys running the industry clearly knew what they were doing...). 

But when you stand back and consider the auto industry mess that Obama stepped into, has he really played it badly? It is too early to give a definitive judgement on that, but he has, perhaps, prodded an industry that could not adequately reform itself in the right direction.

Detroit had got itself in a frightful mess at home. Legacy costs clearly weren't all Detroit's fault. But much else - like inferior or wrong product - was. In the good times, the profits hid the deficiencies in the vitally important US market. 'Oh, sure, share is down again, but check out the bottom line.'

Look, it wasn't all bad (especially overseas) and even GM was slowly putting things right before the mother of recessions hit last year and exposed all the bad stuff again.

But the dire situation Obama was presented with late last year clearly called for some executive action. And, to be fair, that has been delivered. 

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