...Long live the King!

While I was flipping through Lido Anthony Iacocca's autobiography (which I feel has more lessons in management than two years in a b-school) I couldn't help but draw parallel's to the present state of the big three in Detroit. When Iacocca took over Chrysler way back in the 80's, the company had, then too, resorted to the drastic 'anti-capitalist' measure of going to congress for a bailout. Iacocca defends this as being capitalist in that it was preserving competition. That seemed like a good enough argument; though it's obvious that the bailout was approved more to safeguard the image of politicians as being sympathetic to the plight of thousands of workers (in their constituencies) who would be laid off. Don't get me wrong; given a choice I'd prefer Democrats over Republicans, but that's a lot like choosing the Congress over the BJP.

Iacocca says that the failure of the big three had been a result of the unexpectedness of the Iranian Revolution and the sudden shortage of oil. Indeed, GM and Ford followed Chrysler to the taxpayers wallet soon after. Despite being a fan of free markets, I couldn't help but feel that the man kinda had a point.

But thirty years later, it's the same story all over again. Sure the global recession and all is to blame but Toyota also took a bad hit but I don't see them filing bankruptcy, and they're headquartered in Japan of all places!

I think that Iacocca is a great man. I think what he did for Chrysler back then was astounding and, by many accounts, considered impossible. But after getting bailed out twice and still ending up in Chapter 11, I don't imagine - rather I don't hope - that socialism in the self-proclaimed land of the free is an experiment many would dabble in.

On the eve of the more recent auto bailouts (or was it just after, I can't recall), Thomas Friedman, in an article on the New York Times, compared the bailouts to "investing in the Walkman the day before the ipod was released", a metaphor I personally enjoyed.

"Preserving" competition? More like freezing it. I hear adding a bit of salt helps as well.