Archive for December, 2008

01
Dec
08

Arguments Made Too Simple

Last week, I took an unfair potshot at the Big Three car CEOs, one that was commonly made by the press and that I latched on to in order to make a point:

One of the best examples of words taking the place of much-needed action was the Big Three CEOs in Washington begging the government for money. Never mind that they flew there on their private planes (undermines the “need” argument a bit).

Joni Hubred-Golden called me on it, rightly enough, with her comment:

I am not generally a defender of the Big 3, but it has to be said the problem is more complex than them begging the government for money, private jets notwithstanding. And in that regard, I don’t recall a hue and cry of the current magnitude when we bailed out the mortgage industry, where prosecuted fraud was involved. It’s easy to take pot-shots at the execs, but if the Big 3 fail, hundreds of thousands of people who aren’t making seven-figure salaries will pay the price. I live in Detroit, and I know many already have.

Too Simple

She’s right. I did something that I abhor in others and try to avoid doing myself: I simplified a piece of information to make my argument, ignoring the nuance that can influence one’s perspective. My argument should have focused more on the lack of planning by these CEOs than whether they took private jets to D.C. I still see it as a bit of contradiction, but focusing on their transportation instead of the true issue of the American auto industry distracts from reality that we’ve shoveled money to some companies with little thought or transparency. Why are we hitting the brakes on these three?

Note: I’m not a fan of sending billions to companies who made bad decisions, but I’m equally frustrated by the seeming randomness of the largesse and lack of transparency about the exchanges. If the government is going to become the lender of last resort, shouldn’t the people who own its resources have some idea where their money goes and why?

With the recent bailout of Citibank, Joni’s point is again reinforced: where’s the hue and cry over bailing out financial institutions?  Now the Big Three will again descend on D.C. with the hope of convincing politicians that they deserve some of the money that’s been so freely shared with others. However, going back to the question of the real issue, I saw this story about how one CEO will make his way to D.C.:

When the Big Three automakers come back to Washington for hearings later this week on the proposed auto bailout, Ford CEO Alan Mulally will be making the more than eight-hour trip from Detroit to the Capitol by car, the company said today. The company won’t say yet, however, what kind of car Mulally will take (a Ford F-150 pickup truck or a Ford Focus compact car?), whether he will be behind the wheel, or when he will arrive: “It depends on traffic,” says a spokesperson. (link)

Is It Too Late to Change?

Perhaps Mulally is looking to make a statement, but the extremes between the two positions again, to my thinking, overshadows the main issue: can the American car industry pull itself out of a hole dug with expensive union liabilities, SUV mania, and poor management decisions?

This thinking leads me to an even bigger question: does American industry as a whole have what it takes to turn the magnifying glass on itself and diagnose the challenges it faces in the coming decades? Can it survive a Global Revolution on an even larger scale than the Industrial Revolution? For instance, if the Big Three get their money, do they honestly believe that pouring money down the same holes will fill them any faster? Do they see the need for rethinking their business from the road up? Do you believe that America needs to rethink industry?




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