National business summit to convene this week

Executives, politicians, academics meet to find solutions to current crisis

The country’s economic troubles already were brewing when organizers announced in September that business and other leaders would gather here to craft a plan for keeping the U.S. competitive in manufacturing, energy, technology and environmental efforts.

But few predicted the plunge to follow: Banks failed, stocks tanked, homes foreclosed and two once-mighty U.S. automakers landed in bankruptcy court. Congress has poured billions into hopeful fixes, and the new president has made it a personal mission to right the nation’s ship.



So, where does that leave the three-day National Summit, which starts Monday and brings more than 90 leaders from the public and private sectors to the especially hard-hit Motor City? The answer: scaled back but no less determined to do something.
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“The need is more crucial now,” said Tom Dekar, a vice chairman of accounting and consulting firm Deloitte LLP, which helped create the conference.

“I think we may be where we are because we did not have the right policy set in each of those topic areas,” he said. “Had we had a better set of policies in the industrial sector, had we looked at automotive market as a market ... we might not be where we are today.”

Conference organizers initially hoped to draw as many as 5,000 to Ford Field, home of the NFL’s Detroit Lions, but to cut costs they moved it to the Detroit Marriott Renaissance Center. Nearly 3,000 are expected to attend. The summit is being convened by the Detroit Economic Club.

Still, the vision hasn’t changed: assemble leaders from business, government and academia to discuss issues facing the four sectors and come up with recommendations for increasing the nation’s competitiveness. Organizers hope the summit’s nonpartisan approach offers credibility to the ideas among policy-makers.

The conference includes dozens of top executives from corporations such as Microsoft Corp., Delta Air Lines Inc., ConocoPhillips Co., Citigroup Inc., Dow Chemical Co., General Motors Corp. and Ford Motor Co. Members of the Obama administration expected to attend include Commerce Secretary Gary Locke and Van Jones, special adviser for green jobs, enterprise and innovation.

Dekar said the government’s heavy involvement in the government-led restructuring of GM and Chrysler LLC doesn’t dissuade conference leaders from offering recommendations. He said the U.S. auto industry illustrates what they can do beyond the scope of internal reorganization.

“They enjoyed 100 percent of the market share in the 1940s, ’50s and ’60s ... then along came the transplants who didn’t have the same kinds of costs,” Dekar said. “Given we are where we are, what do you really want it to be in the future? How do we ensure the marketplace is fair to all participants?”

The focus on the marketplace concerns organizers of the People’s Summit, a simultaneous alternative gathering consisting of marches, rallies and workshops.

“The whole thrust of the summit, in our opinion, is misguided,” said spokesman Abayomi Azikiwe, a Detroit community activist. “The financial community, as well as the industrialists, have created the conditions for the worst economic crisis we’ve faced in 75 years. We don’t feel they have a solution.”

He said the People’s Summit is advocating for foreclosure and eviction moratoriums, full-employment programs and national health insurance.

Dekar said backlash based on the current economic condition is understandable but the National Summit’s attendees and agenda are important to finding ways out of it.

“We need a set of policies to remain competitive and be leaders in the world,” he said. “We’ve got to cure ourselves first, before we can be of benefit to the rest of the world.”

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Government’s role starts to chafe Big Business

As crisis starts to slowly give way, movement to get Feds out of exec suite

By Theo Francis

It remains an open question whether the much-heralded "green shoots" truly signal a turn toward a U.S. economic recovery. What's clearer is that the business backlash against government is well under way.

Not so long ago, business and policymakers alike were calling for Uncle Sam to step in and stop the bleeding — in the financial sector, at the automakers, in the housing and job markets. Most of the sniping that occurred came as various government figures criticized one another for doing too little. Now, however, the grousing is shifting to arguments that the government is overstepping that subjective line between helpful intervention and harmful meddling, including in areas where business only recently welcomed Uncle Sam's dollars.



"They're making business decisions in a way that is political," John A. Allison IV, chairman of BB&T Bank, told BusinessWeek at a Beltway gala on June 11. BB&T was cleared this past week to return $3.1 billion in federal bailout money. "Where does it stop? The people making the decisions don't have the knowledge of the industries, of the institutions, to make good business decisions."
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Certainly, last week brought plenty of revelations about the government's role as an activist investor, both now and at the height of the crisis. The Treasury unveiled broad principles for executive compensation and backed legislation to give the Securities & Exchange Commission and shareholders more say in how compensation policy is shaped; it also appointed a "pay czar" to police compensation at the seven companies that have received repeated federal aid.

The Food & Drug Administration got the go-ahead to regulate tobacco as a drug. The Supreme Court stood aside, letting the Obama Administration's plan for Fiat to acquire Chrysler go through, despite arguments by some creditors that it stood on end the usual bankruptcy process. And the Administration's role became clearer in everything from picking board members and top executives to "changing the culture" of also-bankrupt General Motors.

On Capitol Hill, indignant lawmakers listened as Bank of America CEO Kenneth Lewis described the pressure he felt late last year at the hands of Fed Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson to go consummate the acquisition of an ever-shakier Merrill Lynch.

So perhaps it should come as no surprise that the U.S. Chamber of Commerce — perhaps the business lobby's most persistent voice against government regulation — picked this week to launch its "Campaign for Free Enterprise." Declaring that "capitalism is at a crossroads," Chamber officials called the effort to "defend and advance America's free enterprise values in the face of rapid government growth and attacks by anti-business activists … one of the most important and necessary initiatives in [the Chamber's] nearly 100-year history." Two days later, the Chamber sent an open letter to Senator John Thune (R-S.D.) supporting a "transparent exit strategy to ensure the timely withdrawal of the federal government from these most extreme and unusual forms of intervention."

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The Republican Party of Florida put it a little more bluntly, headlining its criticism of the Obama Administration's forays into business (and some other issues) "Back in the USSR" and decrying that the Administration has more czars — over health care, autos, executive pay, and more — than did three centuries of Romanov rule. (Never mind that some of the U.S. czars date to GOP Administrations or that the Romanovs and the Union of Soviet Socialist Republics didn't exactly overlap.)

The Administration's approach has real dangers. Attempting to reorganize and tinker with the culture of a giant corporation like GM is risky in the best of times. Taxpayers may find themselves hopelessly entangled in lost corporate causes, with billions of loans never returned. Companies that are shackled with pay restrictions may lose top talent to those that aren't. Countless historical examples show the potential for unintended consequences from well-intended policies. (Just one example: the costly distortions in employee titles and pursuit of tax loopholes that followed imposition of government wage and price controls.)

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