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Do US automakers deserve a bailout?


November 19, 2008/12.29

[Excerpted; full post here] Today at the Vista Group luncheon, we’ll be discussing the US auto industry’s desire for a government bailout. My view: of course it’ll be great to protect US manufacturing jobs, since the situation is not of the plant workers’ doing. As mentioned in one of my papers, ‘Saving Detroit’, the troubles are self-made: brand mismanagement by the Germans when Chrysler was part of DaimlerChrysler, which I have documented elsewhere; and internal politics within Ford, which is the stuff of legend. GM isn’t totally in the clear but it has done more to attempt to integrate an unwieldy structure (just not quickly enough, with hindsight), coordinate automotive platforms, spread its risk with small cars than its other US rivals, and even engage with consumers via its blog. It’s also taking a useful innovative chance with the Chevrolet Volt, reversing the failures of the EV-1 electric car project.
   I say the US Government could provide some guarantees and certainty for the sake of jobs, but the conditions need to go well beyond salary caps and executive compensations. We are talking serious rebranding (and I mean the vision-, culture- and process-changing definition and not slapping on a new logo) here—something that large US corporations tend to have a problem understanding, executing and absorbing. Or, they get caught up in the rhetoric of branding thanks to the way some of the consultancies work. We’re talking major cultural changes. Read full post here.

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Filed by Jack Yan

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