View all newsletters
Have the short, sharp Spear's newsletter delivered to your inbox each week
  1. Wealth
November 18, 2008

Saying 'no' to Motown graspers

By Spear's

Is Obama about to make his first major error before he even gets to the White House?

Is President-elect Obama about to make his first major political and economic error before he even gets to The White House?

This week he urged President Lame Duck to get on with his $25 billion re-tooling subsidy to Motown. He might as well give a sticking-plaster to someone who has just been shot through the heart.

Politically, Obama’s landslide victory means he owes nothing to anybody, other than to the American people to do the right thing. And the risk that the Republicans can sort themselves out, like get a leader and sort out some policies that work, before 2012, is not a bet the bookies would even take your money on.

Yet Obama is shaping up to repay his backers, starting with the Auto-workers Union, like the good teamster he is. Wait a minute: haven’t these Teamsters been as much to blame for the coming demise of Motown as the rotten management?

Economically, bailing out Motown is a total waste of money and won’t even prolong the death throes of this dinosaur beyond a year or two at the most. The mere fact that Motown has asked for a retooling allowance shows the depth of the demise: they have got the wrong tools to make the wrong cars on the wrong cost base; they haven’t even got the right designs at the right price for the right markets.

Whereas Honda and Toyota have been developing new models and new technologies and new production facilities with new designs at the right price ever since the First Oil Crisis in 1974, Motown has just gone on producing gas-guzzlers that now threaten to suck in bail-out dollars quicker than the banks, and that’s saying something.

It is time for Obama to use the incredible strength of his newly-won position to embrace his equivalent of Maggie Thatcher’s 1984 fight with Scargill – remember him? – and Tony Blair’s 1996 Clause Four moment. And to put up dollars for Motown’s viable businesses post-bankruptcy, and use the dollars “saved” to fund new deals in the area. That would be much smarter, both politically and economically.

Content from our partners
Why investors should consider investing in nature
HSBC Global Private Banking: Revisiting your wealth plan as uncertainty abounds
Proposed non-dom changes put HNW global mobility in the spotlight

Select and enter your email address The short, sharp email newsletter from Spear’s
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network