A lesson for China to learn from Chrysler's fall
- Source: The Global Times
- [21:38 May 05 2009]
- Comments
Illustration: Abdul Saeed Ala Atik
On April 30, Chrysler LLC, for years the third-biggest automaker in the US, filed petitions in the US Bankruptcy Court for the Southern District of New York. The process that led to this path for Chrysler – which the US President Barack Obama called “a pillar” of the industrial economy – is quite enlightening for China’s young auto industry.
Chinese automakers will never exult over Chrysler’s fall, nor will they even think about fishing in the troubled waters in Detroit, since GM and Ford also face difficulties. The coolest proactive analysis is probably that Chrysler made a decisive choice with the help of the US government. President Obama supported its bankruptcy protection and stressed “it is not a sign of weakness, but rather one more step on a clearly charted path to Chrysler’s revival.”
Although it is early to say how far the Chrysler Fiat Alliance will go, China’s automakers can already learn a lot from how the US economic system handled a big company on the brink of failure in a cyclical industry. We can clearly see how the government stimulated the vitality of the company and helped it as much as it could during a downward cycle.
In contrast, what did our system do to encourage large companies in difficulty to do to save themselves? Which way is more appropriate for market development – the government takes it all or lets enterprises save themselves? The Chinese auto industries haven’t experienced the summit that Chrysler once had. If the Chinese companies sink into such a predicament one day in the future, what can we do? We should see much more than the deathbed struggle of Chrysler.
(Shanghai Business Daily)
