Thursday, November 20, 2008

Auto Bailout

The auto giants are faltering. Hundreds of thousands of unionised workers with powerful political backers have mobilised. The towers of Government ring with urgent demands for money. How will the Government respond? Will cool heads prevail? Is an intelligent and dispassionate leader there to calm the agitators and reassure the worriers, while guiding the nation down a sensible path? Unfortunately, sensible seldom equates with easy and, as they say, time is the ultimate judge.

Money was passed to the desperate hands of the auto giant and for a few more years things were good. However, US$16.5 billion later (admittedly a paltry sum in today's rescue parlance, but a mighty sum in the '70s and '80s), British Leyland was no more. Now, all that is left of the company are painful memories and the odd restored Triumph.

Of course this isn't a fair comparison. Ford and General Motors are iconic American companies. They're guided by the America dream and underpinned by good old sweat and tears. British companies are different. They're, well, British. Everyone knew British Leyland was a structually flawed company ... didn't they?

My advice, for what it's worth, is let them go. It will be better in the long run.

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