Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Turnaround Pros Want Obama Focused On Job Creation and Credit Access

January 4, 2009

The most critical task for the Obama administration, according to members of the Turnaround Management Association responding to an annual forecast poll, is to take steps that will overcome consumer fear and credit paralysis.

“Any form of positive movement is the most important thing,” said Thomas S. Henderson, a Houston bankruptcy attorney and TMA Board member. “Everyone is in a state of malaise, and that won’t change until something is done to inspire people.”

Most respondents to the Trend Watch poll put job creation, tax cuts, and freeing up credit as the top three means to jumpstart the U.S. economy.

“If the government issues contracts for companies to fix roads, sewer systems and other public works, they will put money back into the economy,” said TMA Vice President of Public Affairs Margaret M. Good, who is a Certified Turnaround Professional (CTP) and president of The Meridian Group. “The way you get out of a recession is to get people working again.”

Industry Outlook for 2009

When naming the most troubled industries for 2009, poll respondents said:
1) Automotive industry, up from 3rd place in last year's poll
2) Retail, jumping up from 6th place
3) Homebuilders, falling from 1st place last year
 
 

Healthcare, energy, and commercial banks were named by one-third as most likely to show some improvement in 2009.

Those responding to the poll taken during the first two weeks of December had a strong reaction to a government bailout that was still being considered by Congress at the time:

  • 76% disagreed that Congress should approve federal loans to the Big Three.
  • 77% thought filing for Chapter 11 bankruptcy would be a better solution.
  • 68% said if bankruptcy was filed, the government should guarantee the Debtor In Position loans necessary to reorganize.
  • Only 39% thought the government should also provide Chapter 11 exit financing.

“The fundamental problem is there (currently) is no plan,” said Steve Mischo, a member of the TMA Board of Directors and an adjunct professor of finance at Adelphi University’s School of Business.  “Simply infusing money into an industry will not solve the problem.”

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