Vista Group on US Auto
Sitting at a roadside table in the sunshine eating fish, the Vista Group pondered the parlous state of the Big 3 US auto makers:
- Getting his retaliation in first, Jack Yan had already written up his perspective, which essentially supports some form of federal bailout, with conditions attached to force reform.
- Mark Di Somma favoured Chapter 11 administration (reorganisation), to take the creditor pressure off while the companies restructure themselves. Companies often manage such processes themselves.
- I, being somewhat cynical about the industry’s failed makeover attempts over the last 30 years, argued that Chapter 7 administration (ie. send in the
receiversliquidators) is the only way to achieve the required level of change, effectively breaking up these giant companies into more nimble businesses, because they won’t do it to themselves. I’m not alone in this; Lance Wiggs has expressed similar sentiments. - Natalie Fergusson didn’t have strong views on industry restructuring, but hoped that Hummers won’t be made anymore.
As usual, we failed to stay on topic, with diversions into well-meaning but crass attempts to serve ethnic customer groups, hitherto undiscovered programming gems on satellite TV, and how hard it is to write a pithy description of your own business. We suggested that Jack runs as the non-aligned, non-parochial candidate for Executive Mayor of Greater Wellington, if and when that miracle of local government reform ever happens. And Jack somehow managed to have his linguini ai frutti di mare made with chorizo sausage.
PS I forgot we also covered social network sites.
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November 20th, 2008 at 4:08 pm
I found this interesting…
What Toyota knows that GM doesn’t http://edgehopper.com/what-toyota-knows-that-gm-doesnt/
November 24th, 2008 at 10:31 am
[…] pre-dash to Mt Maunganui was the monthly Vista Lunch with Jim, Jack, Mark and […]
November 25th, 2008 at 2:44 pm
I’m with Jim. Close them down and sell off the assets. There’s a guy in India doing a great job of making a five seater four door sedan for US$2500 retail, why keep subsidising a 1920 business when there’s a 21st century one waiting in the wings?
BTB Iacocca was good - he dropped his salary to $1.00 p.a. when he asked the unions for help, this lot won’t even give up one each of their corporate jets but are asking for billions to pay out as dividends (which is what the banks have done with their handout!)
November 25th, 2008 at 3:00 pm
To be fair, Nardelli from Chrysler is already on a $1 salary but presumably has a big bonus in his contract!
June 2nd, 2009 at 1:33 am
[…] in a jacked-up deal that will see creditors bilked with the connivance of their own government. I favoured Chapter 7 administration, which would have produced a fairer deal for creditors, and produced faster action […]