Private Equity Is Agent of Efficiency for the US Today
I may be a little rusty after the hiatus, so I am going to take this slow to avoid a headrush...
A while back I mentioned that the UAW has a terrible hand going into the next few years. Well, this article just adds solid confirmation to the trend. The capital flowing in to take public companies private appears limitless. Size will not protect you anymore. Nobody is safe. Not Chrysler, not Ford, not GM. If you have a failed business model, brought to its knees through decades of appeasing labor unions, you have a fat bull's eye on your corporate keister right now. The money is there.
Not that this is a foregone conclusion. Alan Mulally and Rick Wagoner could yet sell the UAW on the merits of swallowing a little castor oil now to avoid further imperilling the companies and ensuring a new set of bosses will be running the show with a much more anti-union management playbook. Chrysler, I think, is gone. Its German overlords don't have the stomach for the fight. The unions will do all they can to keep private equity's hands off Chrysler, because anything that new owners demand of Chrysler's UAW members will eventually be matched at Ford and GM.
The forces of efficiency-promotion are at work via our capital markets and the energy is gathering too fast to resist at this point. Corporate managers that stub their toes for a mere second and unions that have heretofore run the shop, will get swept away.
A while back I mentioned that the UAW has a terrible hand going into the next few years. Well, this article just adds solid confirmation to the trend. The capital flowing in to take public companies private appears limitless. Size will not protect you anymore. Nobody is safe. Not Chrysler, not Ford, not GM. If you have a failed business model, brought to its knees through decades of appeasing labor unions, you have a fat bull's eye on your corporate keister right now. The money is there.
Not that this is a foregone conclusion. Alan Mulally and Rick Wagoner could yet sell the UAW on the merits of swallowing a little castor oil now to avoid further imperilling the companies and ensuring a new set of bosses will be running the show with a much more anti-union management playbook. Chrysler, I think, is gone. Its German overlords don't have the stomach for the fight. The unions will do all they can to keep private equity's hands off Chrysler, because anything that new owners demand of Chrysler's UAW members will eventually be matched at Ford and GM.
The forces of efficiency-promotion are at work via our capital markets and the energy is gathering too fast to resist at this point. Corporate managers that stub their toes for a mere second and unions that have heretofore run the shop, will get swept away.
posted by Donny Baseball at 2:46 PM
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