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Can you make a case for the French model, specifically on bailouts and turnarounds of major businesses? It seems to me that there is a good case that the French are indeed better at this than most countries, that they do not just keep propping up dying industries. So, like I've read a lot on the Swedish 90s bank nationalisation, I'd like to get more on what France did with Alstom, and other manufacturing firms. Is there a method? What makes it so successful?
by nanne (zwaerdenmaecker@gmail.com) on Fri Jan 16th, 2009 at 04:14:00 AM EST
[ Parent ]
Alstom is a good example. It was brought down because its reserves were looted by Alcatel and Marconi prior to the spin-off, and thus the company was unable to withstand a big unexpected problem (the GT24 turbines, purchased from ABB without enough technical due diligence, not functioning as expected).

Alstom's problem was a cash crunch over an otherwise sound technical and industrial base.

A lot of the big French companies are still run by people that have engineering expertise. Localised technical problems, however major, CAN be solved - the question is how much it costs. Other kinds of problems cannot all be solved.

So focus on getting the engineering right, and you'll always manage to get the economics and financials right. That's been my approach to offshore wind: the risks are technical risks in industries with long track records of solving technical problems: they will be solved. It's a different kind of risk to betting your company on market growth or price evolution, ie things you cannot control nor influence.

In other words: have only problems that you know YOU can solve.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Jan 16th, 2009 at 09:25:54 AM EST
[ Parent ]

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