Auto impact not just about Detroit
TEXT OF STORY
Scott Jagow: We’re joined now by David Buick. He’s with the Cantor Index in London. David, there’s obviously a lot of angst in the markets. What’s the biggest concern?
David Buick: It’s the realization that, frankly, the U.S. auto industry’s been living in the dark ages for the last 20 years. And there is a grave concern they’re not going to be in a position to provide radical plans for Congress by the end of March. Because this is a huge industry — probably employs 2 million people — so it is a very, very serious issue. It’s not just Detroit, it’s affected U.K., China, India. It’s a dramatic problem.
Jagow: What do you think is the best scenario for the carmakers at this point?
Buick: Scott, you won’t want to hear this, but shall I tell you?
Jagow: Yes, please.
Buick: I would do everything, if I was President-elect Obama, in my power to make sure that the banks were strong as quickly as possible. Because banks don’t want to carry on lending money to a lame duck, do they? But what Mullaly and his colleagues Nardelli and Wagoner have to do, and they have to do it quickly, is they have to agree massive redundancies and huge cuts. And however devastating it is for Detroit and the surrounding areas, you have to take some remedial action. And I think they will fudge through a deal some time in the next two or three weeks, or they’ll wait till President Obama takes office on the 20th of January. But all it means is the old begging bowl for Oliver Twist is out there for another $30 billion, and that’s not fair on the U.S. taxpayers.
Jagow: OK, David Buick from the Cantor Index. thanks for joining us.
Buick: It’s a great pleasure.
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