Government Partnership During Business Crisis

"Both men believed that the federal government could—and should!—play a key role in helping businesses and municipalities move beyond their troubles."

"Similarly, I came to believe that an institution like the RFC could still be used to promote the economic revitalization of such crucial national assets as Lockheed. A government agency should be formed, I felt, that would work with business and labor to supervise a national recovery program. In exchange for new capital, this agency could demand the management changes, the increased labor productivity, and the price disciplines that would be necessary to bolster American businesses and even its cities during the economic and social crisis caused by the current recession and oil embargo. I had found a disciplined and yet effective plan, I was certain, for the United States to make its way successfully through a time of financial uncertainty and emerge with confidence into a new, prosperous era."

"Ultimately, I helped to save Lockheed the old-fashioned banker’s way—by cobbling together a group of reputable investors and creating a sensible business model for the company. The company would be forced to endure some painful restructuring, it would need to abandon its dream of the Tri-Star, the banks would need to agree to be more indulgent, and the Pentagon and the government would have to provide strong financial support and guarantees. When this was all worked out, Lockheed was saved. A national resource, I felt with pride, could continue its necessary work in protecting the country."

"a three-year moratorium would be declared on the repayment of $1.6 billion of maturing publicly held city notes. This moratorium turned out to be the most controversial action we took during the entire crisis. That reaction, of course, did not take us entirely by surprise. Before we decided to take such a step, we had struggled with the decision. After all, a moratorium is, in many ways, a default by another name. It would be a serious blot on the state’s credit. But we had no choice. We simply were not able to raise the funds to pay off these notes. Our only alternative, we reluctantly decided, was to ask the legislature to declare a moratorium for three years, during which we would pay interest but not principal. At the end of the third year, we felt confident we would have the funds to pay the notes back. But until then, repayment was an impossibility."

"have achieved his success in shipbuilding, steel, dam building, or aluminum without a healthy relationship with the executive branch. The Kaiser story is just one example of how government entrepreneurship relies on both an activist government and venturesome entrepreneurs."

"."28 Kaiser demonstrated the dramatic success government entrepreneurs could achieve by being nimble enough to seize the opportunities presented by an activist government. His enterprises represented a confluence of administration policy and entrepreneurial zeal."

"Even Henry J. Kaiser, the most powerful businessman in the West, could not Page 3 have achieved his success in shipbuilding, steel, dam building, or aluminum without a healthy relationship with the executive branch."

"An unconditional ally of the president of the Republic —more unconditionally with some than with others— and of the PRI, Azcárraga did not conceal his partisanship or his willingness to support the official party with money or in kind. Every time an electoral process approached, Azcárraga would make off-the-cuff remarks at official events about his support for the PRI. The quotations varied, but in essence he repeated the same words: “We are with the PRI, our boss is the president of the Republic, and we are part of the system.”"

"It also illustrates his influence on power that Joaquín Vargas had to wait almost five years to operate a pay-television concession in Mexico City. Azcárraga filed an injunction to delay the entry of this new signal, Multivisión, since it would compete directly with his company Cablevisión. The only explanation that President Miguel de la Madrid gave Don Joaquín was that he would have to wait because Televisa was “very important” to him. Days before his six-year term ended, De la Madrid authorized the concession of Multivisión to begin operations."

"Although there is no doubt he was a man of the system, Azcárraga never courted officials. He spoke with presidents as equals and handled his affairs with the top tier of the cabinet, not with ceremony or reverence, but as if he were closing yet another deal with some partner or client, and to some extent that is what it was: Televisa served the system and the system served Televisa."