As I wrap up three days in Detroit let me give you my key takeaways.
1. Detroit will reinvent itself. I have no doubt. It will be a struggle but they understand what lies ahead and they know how important manufacturing is to this economy. Manufacturing jobs employ at least 10 million people and pay 20% more than service jobs. Manufacturing jobs are highly technical, require highly skilled workers and there is a talent shortage for some of those jobs. It will be a long road ahead but the blueprint is located in the city of the upcoming G20 summit this fall; Pittsburgh.
2. Too much overregulation and higher taxes are a big concern for corporations. They're concerned about remaining competitive. Ultimately about repatriation. They want to make sure U.S. companies are not disadvantaged. Some executives said U.S. companies are competing with other countries as opposed to other companies. They want to make sure the U.S. is doing its part to make business more viable. They all agree it takes both the government and the private sector working together.
3. Certainty is crucial. Ambiguity is dangerous. The perfect example is the proposed changes to CAFE standards. Many executives pointed out how each stakeholder contributed to an agreement that everyone mutually agreed upon. Each party made a concession but a long the way they removed uncerainty and created clarity for business, government and each stakeholder at the party.
4. To win, to compete means we need to innovate. That means taking risks. We have the lowest cost of capital in the world and we better keep an eye on China. Some say we are the G2. We are so interconnected and co-dependent on each other. China is innovating. Making huge technological strides and making a tremendous investment in climate change. Spending $12 million an hour on renewable energy. They have some of the best and most efficient manufacturing facilities in the world. Some of the best education systems. We need them financially to finance our debt and they need us to export those goods. This relationship is crucial. Protectionism is dangerous but it is imperative that the U.S. still remember that we are the free market economy that fuels the engine, that supports rule of law and freedom of information. Bremmer from Eurasia Group noted China's savings rate was 25% last year. The U.S. negative 2.5%. We will save more and as they're middle class rises they will save less. Interesting thought!
5. Nuclear power will be a part of the energy portfolio and the groundswell to raise awareness about its merits and its costs are gaining steam. When I questioned the green czar Van Jones about the nuclear portfolio he quickly pointed out that we (the administration) did select Secretary Chu as the Energy Secretary. I.e. Chu is a big supporter of nuclear as an option.
6. RIM's Balsillie sees an opening with healthcare reform and he is beginning what could be a revolutionary way of accessing your physicians, nurses and practioners. Think concierge service through your smartphone. It's not just about electronic records. It's about diagnostics.
7. Watch Van Jones, the White House's green czar on jobs. I see a future in politics and his name and face in the spotlight. Trust me.
8. Michael Klein former Vice Chairman of Citi who left last summer will be running a major financial institution when his non-compete expires. He didn't get the top job in the management shake up but did secure the funds needed from Abu Dhabi when the Citi crisis began. He consulted on Barclays purchase of Lehman's asset. Has been consulting for the U.K. Government on banking regulations. Watch him. He had an 18 month non-compete which I believe expires this fall.
9. Watch Codexis. Big investments from Royal Dutch Shell and big partnerships with pharma space. They pulled their IPO last year. Sounds like they're here to stay and they're technology is gaining steam.
10. Look for Mulally to announce a new deal with the UAW very soon. The contract with the UAW is open ended and they know what Chrysler and GM are paying. They won't tap the equity markets right away but they know they need to show improvement on the balance sheet. That is one place they can make improvements right away.
i'm back. china is strong yes, and i like their ability to "borrow" technology from other countries. the sad thing with them is they only have about 800 billion u.s. dollars in reserve and we will need a lot more than that to finance the 5 trillion dollars we will be spending just this year alone. china can't feed their own people, they are a producer based economy that is 100% dependent upon the u.s. (a 100% consumer based economy) for it's growth. we can go to any semi-third world country out there right now and have cheap, poisonous, garbage consumer products made. we don't need china. without the u.s. china starves figuratively and literally speaking. china can't bail us out and it is scary when you think that they are the only country out there that actually is somewhat solvent and they are the one we are looking to to buy our debt. i feel china is in a bad way right now and will need every resource they have just to contain the civil unrest that will arise when the global recovery does not come. china is in critical condition and they know it. i wonder what china's savings rate is this year? i just read ours went to almost 6% and look at the global impact that increase in the yoy u.s. savings rate had. what would happen if we jumped to 25%? yes, i agree with you that we are the fuel that powers the global economic engine. keep it real.
June 18, 2009 at 11:16 am
jobu
very thurough piece. you covered many topics here. i worked in manufacturing for a few years an a variety of different jobs. skill is not a word i would use to describe the attribute of the worker. more like specialized. i could train a blind one arm monkey to do any of my jobs i had because, now get this, it is repetition based! skill is gone when you understand that these people become robots performing the same task over and over again. humans are not needed anymore. hyundai builds cars from the start to finish with robots. they only need a few humans to monitor and fix the robots when they need maintenance. the uaw needs to crawl off the stage and die in a hole. i understand how unions work because i have been a member in 2 of them. they are 100% socialist organizations. they send out mock voting ballots to tell you who to vote for in upcoming elections. it doesn't matter if the politician aborts babies and turns them into dog food, just as long as they support the unions, you will be required to vote for them. that is all i have room to type. peace out.
June 18, 2009 at 10:55 am
Ray
Great recap, thank you. I hope that they are able to do what needs to be done in spite of the government's actions.
June 18, 2009 at 10:50 am
Mike Bishop
You are wrong about GM. The Koreoans are just getting started and VW will be a major producer in the US over the next ten years. There are also niche companies that are beginning like the one announced today in LA. There is too much competition and GM is still the same GM. There is no fresh blood in top management. These are all GM lifers. Add to that the fact that they have to serve the government. They will be back in bankrupcy in the next five years.
June 18, 2009 at 8:41 am
aboutthis blog
Alexis Glick is an anchor for FOX Business Network. Prior to joining FOX, Glick served as a correspondent for the Today Show and co-anchored the third hour of that program. Before her stint at NBC News, she was the senior trading correspondent for CNBC and reported from the floor of the New York Stock Exchange.
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jobu
i'm back. china is strong yes, and i like their ability to "borrow" technology from other countries. the sad thing with them is they only have about 800 billion u.s. dollars in reserve and we will need a lot more than that to finance the 5 trillion dollars we will be spending just this year alone. china can't feed their own people, they are a producer based economy that is 100% dependent upon the u.s. (a 100% consumer based economy) for it's growth. we can go to any semi-third world country out there right now and have cheap, poisonous, garbage consumer products made. we don't need china. without the u.s. china starves figuratively and literally speaking. china can't bail us out and it is scary when you think that they are the only country out there that actually is somewhat solvent and they are the one we are looking to to buy our debt. i feel china is in a bad way right now and will need every resource they have just to contain the civil unrest that will arise when the global recovery does not come. china is in critical condition and they know it. i wonder what china's savings rate is this year? i just read ours went to almost 6% and look at the global impact that increase in the yoy u.s. savings rate had. what would happen if we jumped to 25%? yes, i agree with you that we are the fuel that powers the global economic engine. keep it real.
jobu
very thurough piece. you covered many topics here. i worked in manufacturing for a few years an a variety of different jobs. skill is not a word i would use to describe the attribute of the worker. more like specialized. i could train a blind one arm monkey to do any of my jobs i had because, now get this, it is repetition based! skill is gone when you understand that these people become robots performing the same task over and over again. humans are not needed anymore. hyundai builds cars from the start to finish with robots. they only need a few humans to monitor and fix the robots when they need maintenance. the uaw needs to crawl off the stage and die in a hole. i understand how unions work because i have been a member in 2 of them. they are 100% socialist organizations. they send out mock voting ballots to tell you who to vote for in upcoming elections. it doesn't matter if the politician aborts babies and turns them into dog food, just as long as they support the unions, you will be required to vote for them. that is all i have room to type. peace out.
Ray
Great recap, thank you. I hope that they are able to do what needs to be done in spite of the government's actions.
Mike Bishop
You are wrong about GM. The Koreoans are just getting started and VW will be a major producer in the US over the next ten years. There are also niche companies that are beginning like the one announced today in LA. There is too much competition and GM is still the same GM. There is no fresh blood in top management. These are all GM lifers. Add to that the fact that they have to serve the government. They will be back in bankrupcy in the next five years.