In the December 9th, 2008 edition of the online Wall Street Journal, I found this very interesting quote. If it weren’t for the fact that the entire U.S. population seems to be either off its rocker or smoking crack, it would be hilarious. Considering our current predicament, it is beyond the pale. Here it is…
The first thing I find interesting about this quote is that this respected “gray lady” of journalism is quoting a corporation. Not a spokesman, or a press release, but the corporation itself. Perhaps all employees and board members yelled this blurb in unison… This is something we would have done on my high school newspaper.
Secondly, Ford has firmly assured us that losing one of their chief competitors would evidently be bad for Ford financially. Wait for it… Give that a second to soak in. I’ve always rejoiced in the past upon losing a competitor (in a sportsmanlike way, of course).
For it to be possible for this type of statement to be made by a major corporation, and to be accepted verbatim by the WSJ and put immediately into print, our financial system has to be either run by clowns, or by charlatans. This kind of economic thinking could very well lead a corporation into bankruptcy; that is, if the federal government will allow it.
I can think of two reasons why “Ford” takes this position. (Please do not mistake my suggestions as endorsement.) One, while “Ford” may not want assistance at this time, it may in the future. Supporting aid for the other two of the “Big Three” curries favor. “Ford” could then ask the other two to support “Ford’s” request for aid. Along with this “Ford” get the positive PR of being a business that during the current dificult economic situations it did not need aid. The “Big 3” long ago quit being market entrepreneurs years ago and now are political entrepreneurs. “Ford’s” actions may help it as a political entrpreneurs.
Two, “Ford” may be concerned about anti-trust allegations. “Microsoft” invested heavily in “Apple” when “Apple” was about to go out of business. “Microsoft” was concerned that without “Apple” as a competitor that it could face a very expensive anti-trust litigation. “Ford” may have this or a similar concern.
Regardless of “Ford’s” justifications, Ken’s statement about the financial system being run by clowns or charlatans is correct. I would only change the statement to clowns and charlatans are running the financial system.
Well, Mattel hasn’t had such an illuminated attitude towards MGA, much to the chargrin of millions of little girls.
Back to the topic at hand. Is anyone really surprised? Among automakers there are all kinds of “gentlemen’s agreements” and non-written pacts: ever since the demise of British Leyland no automaker has been allowed to go belly up, either through government intervention (backed by the entire industry, including “competitors”) or through private agreements. Did GM really needed Daewoo car division? No, but Daewoo needed to a bailout and the Korean government at the time was stripped for cash since it had just helped out many chaebol.