Chasing the Rabbit: Official Blog by Author Steven Spear

Chrysler has a business approach proven flawed.  It’s owner, the private equity firm Cerberus, wants the American tax payer to cushion the downside should a modified model not work.  However, do they promise to share the upside or to share participation in other parts of their portfolio  too?

After years botching design and production, Detroit proves itself inept at marketing as well.  Though supportive initially of an auto bailout, even the NY Times is questioning the wisdom of giving cash to these ill managed companies.  First to loose backing of “the Grey Lady” is Chrysler, and rightly so (”Why Can’t Cerberus Foot the Bill?” Feb 23 ‘09). As the Times points out, the private equity firm, Cererbus is more than willing to come with its hand out for a handout for its Chrysler position, but there is not mention of giving you, me, and other taxpayers a cut of the high performing positions in its portfolio.  In other words, they get all the upside, and we eat the downside.

Derrick Jackon, writing in Saturday’s Boston Globe goes one step further in “Pull the Plug on Detroit.”  His argument?  These folks have proven themselves incompetent over many years already.  To think now they’ll figure out how to compete? No way.  Either don’t spend the money or spend the money on something forward looking–mass transit, rail corridors, that have the intended effect of economic stimulus, air space decongestion, carbon emission reduction, and so forth.

This whole “throw money at the problem” is insane.  More about fixing system problems with systemic solutions in a soon posting.

Related posts:

1. Discovering our way out of crisis…
2. Would you buy a car from GM or Chrysler?
3. NY Times Dismisses Brown-Coakley Vote As Popularity Contest…
4. Leadership for a Networked World…
5. MIT News 3 Questions with Steve Spear: Toyota Troubles–Pace of business growth and product and process complexity overwhelm learning and people development capacity