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Avoiding the time warp

19/11/2008

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Scoopit!

The WSJ has an opinion piece on why there should be no auto bailout of GM. It makes sense to Adam. However, the Democrats will probably bail out GM and then a few years from now, or sooner, it will be bankrupt and cost even more.

GM became stuck in a time warp, with a cost structure that made no economic sense.

We need to avoid doing the same.

NZ should be a nimble economy, focusing on high value add niche products. Apart from anything else such as approach is likely to increase national wealth and over all productivity. In addition it may well reduce resource stress caused by dairying.

Consequently Adam continues to be bitterly disappointed by Fonterra. Fonterra is still overly dependent on commodity products such as milk powder. It has not managed to move substantially up the value chain.

Farmers and others should be asking hard questions as to whether Fonterra is in fact achieving what it was established to do.

There is a danger that Fonterra, the meat industry and possibly NZ may become stuck in a time warp, rather than moving forward.

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