I haven't worked through recessionary times like these before, having weathered the storm of the early 1990s inside a particularly cosy Ivory Tower, emerging blinking into a commercial world that was just beginning to find its feet again.
Reading the financial pages today, the view from the UK and the US is both interesting and alarming. Having bailed out the financial sector, the US is facing the triple whammy of the 3 largest car manufacturers holding out the begging bowl for federal cash to save themselves, with Ford, GM and Chrysler bosses appearing on Capitol Hill to try and secure a rescue package before they run out of money to pay the bills. A nice irony pointed out by Congressman Sherman was that they had all flown in by corporate jets to ask for cash, but this shouldn't mask the human cost of hundreds of thousands of jobs at risk if the big 3 are allowed to go under.
When MG Rover went under a few years back, the knock on effect on smaller suppliers further down the food chain was devastating in the West Midlands region. Imagining the knock-on effect if the Big 3 went down in the US should force a deal of some sort through one would hope.
Back in the UK, Mini are taking a month off from production in December, and Honda have announced a 2 month mothball for production in Swindon next year. With airfields across the country doubling up as car parks for unwanted new cars, this shouldn't be surprising, but somehow it still is. Jaguar are also asking for £1bn in interim loan finance, as Tata, their parent company struggles to finance the debt incurred to buy the luxury brands a couple of years ago.
On the other side of the pond, Citigroup shares have taken a battering this week, down 23% on Wednesday, 26% on Thursday and 20% on Friday, despite announcing a further 50,000 job cuts globally earlier in the week. Confidence, or lack of it, seems to be driving the share price down, as the fundamental financial health of the business is apparently reasonable. Though what this means anymore is debatable, the rules of the game have changed so much in the last few months that the pen and the word are indeed mightier than the sword. Confidence in the markets is everything, and without it, not even the mightiest financial institutions are safe. Again, the human cost if Citigroup implodes would be immense.
Finally, what to say about Woolworths? For too long now, a brand in chaos, with no clear consumer proposition and massive product ranges displayed in chaotic shelving. The commercial situation is clear - without a rescue deal being agreed with the bank syndicate providing the existing debt mountain, the business will be out of cash before Christmas and likely to be in administration before the month is out. The human cost is also clear, 30,000 staff in 840 stores face a Christmas without a job to return to.
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