Corin Dann interviews Chris Liddell
Sunday November 11, 2012
Corin Dann interviews Chris Liddell.
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Q + A – November 11,
Fmr General Motors CFO
Interviewed by CORIN DANN
CORIN Chris Liddell, thank you very much for joining us. You were on the losing team. How are you feeling at the moment?
CHRIS LIDDELL – Fmr General Motors CFO
Uh, I’ve felt better. I feel a little like I did after the ’95 World Cup final.
CORIN Ooh, that bad?
MR LIDDELL Only took me 16 years to get over that. But, no, it was an amazing experience, and I was delighted to do what I did, so it’s a shame to be on the losing side, but—
CORIN It is an incredible story. Tell us what exactly were you doing?
MR LIDDELL Most recently, I was the executive director running the operations on the transition-planning side, so that was setting up for the transition phase which starts immediately after the election.
CORIN And just remind New Zealanders who might not be familiar, the transition – the potential transition – is an enormous exercise, isn’t it?
MR LIDDELL Yeah, what happens here, and it’s unlike New Zealand, but essentially January the 20th in this cycle, one party in the White House moves out and the next day another party moves in. And you have 75 days between the election and inauguration to basically plan your whole administration, so it’s a massive exercise, because you’re effectively setting up to run the whole US government and everything associated with that, and you have this 75-day window. So what you have to do is, in order to maximise the time during that window, you have to do a massive amount of planning before that.
CORIN And you were essentially running that?
MR LIDDELL Yeah, I was executive director, which runs the operational side of all of that, and that’s a project that I’ve been working on for about six months. I was working on the campaign for about 15 months in various ways, but on the transition planning for the last six months.
CORIN And in the campaign you were fundraising, primarily?
MR LIDDELL No, I wasn’t fundraising per se. I was the treasurer of the joint fundraising committee. What happens here is basically each of the campaigns raises a large amount of money. You’ve probably seen we both raised about a billion dollars, so a massive amount of money. The individual candidates raise money, and then when they become the nominee, they get together with the Republican National Committee and states and form what's called a joint fundraising committee, and that allows them to raise massively more.
CORIN So you had plenty of money. What went wrong?
MR LIDDELL Well, the other side got more votes! There's a number of factors, really, and I would say, if you had to boil it down to one, the Obama campaign did a really good job on what we call voter turnout – their ground game. They got— They were very good at galvanising their base and getting them out.
CORIN You wouldn’t have underestimated them. You must have known that was going to come, did you?
MR LIDDELL We always knew it was a challenge. One of the issues here is the incumbent has a massive advantage in that respect. He effectively has four years to build his infrastructure, whereas the challenger only has a relatively small number of months.
CORIN So you were consumed, in some ways, by that primary race and—
MR LIDDELL The primary takes a lot out of the challenger. It helps them in some respects, but it takes a lot out of them. It drains his resources financially, and it also gives him relatively little time to then fight the major battle, whereas the incumbent has all of that time there.
CORIN What about the message? Was there an element where the Tea Party and some of the more extreme elements on the edges of the Republican movement – did they hurt Romney in the end, do you think?
MR LIDDELL Well, certainly the primaries, again, are a bruising factor, and what happens in those primaries is you see extreme views come out, so people can often form a view around some of the opinions that are raised in that; again, whereas the incumbent tends to sail through. So certainly some people formed an impression through the primaries—
CORIN And the Obama camp really honed in on those, didn’t they? And they made it difficult for you.
MR LIDDELL Yeah, they certainly did that immediately after the primary. Once it became clear that Mitt Romney was going to be the nominee, they sort of drilled in on a lot of the factors that had been discussed in the primary.
CORIN Tell me, was that fair? I mean, you must have got to know Governor Romney reasonably well. Was that unfair, the way he was portrayed. I mean, what sort of a man was he from your perspective?
MR LIDDELL Well, you know, it’s the old rugby expression – play the ball, not the man. And I think there was definitely a lot of playing the man. I think Mitt Romney is a fine, outstanding man. One of the reasons I got involved was I met him and his wife Ann 15 months ago, and I think they are outstanding human beings, and that’s one of the things that appealed to me. A lot of the attacks were character attacks, which personally I don’t subscribe to. I think issue attacks are fine; personal attacks not so much.
CORIN So in terms of the issues, in terms of the economy, his vision is very much in line with what you think needed to be done as well?
MR LIDDELL Yeah, I think he had a very strong pro-growth initiative and certainly in all the transition planning we were doing and the sort of people— One of the really interesting sides of what I was doing was looking at who would fill the administration, and a lot of the people he was looking to bring in or thinking about bringing in would have been very pro-growth orientated, and I think a lot of his policies were pro-growth orientated. So from an economic point of view, I certainly felt, you know, very positively about him.
CORIN And so did he—? When you met him, did he approach you a bit further down the track or did you volunteer your services?
MR LIDDELL I volunteered. I met him— As I said, I met him and his wife, I spent about an hour with them, and I basically said, “Look, I’m happy to give you a year of my life.” I’d just left my previous job at General Motors, I was looking for something meaningful and interesting to do, and this is something where, had we won, it would have potentially led to a really interesting new career, and if we lost, I thought it’d be a year of fascinating experiences, which is what it turned out to be.
CORIN So you would have potentially looked for a position within his administration?
MR LIDDELL Possibly. I would have been executive director of the transition, which I think would have been a fascinating and wonderful 75 days in its own right. And then who knows where to afterwards?
CORIN There's another cycle no doubt coming with the Republicans. You keen to get involved again?
MR LIDDELL Oh, who knows? Who knows? Four years is a long time, just like the—
CORIN But did you enjoy the experience, the political experience?
MR LIDDELL Oh, it’s fascinating. This country is— You know, this is the big leagues of politics. There is a fascinating process that happens, and what they do and what happens after the elections counts.
CORIN How worried are you about their debt problem, about the fact that they could fall back into recession and that we could have global growth slowing and risks to countries like New Zealand? How much of a threat is it?
MR LIDDELL Well, I’m generally optimistic. Not as optimistic as I was two days ago! I mean, seriously, I think Romney principles would have been much more favourable, especially with the challenges that the country has – the fiscal cliff coming up, the level of unemployment and so forth. But having said that, my fundamental belief is that growth is the natural state of things. You have to do negative things to stop growth, and there are a lot of aspects about America that continue to be very favourable. It’s a relatively young country, surprisingly. It’s very well educated. Things like energy costs, again, surprisingly are relatively low here with the gas boom.
CORIN But are you worried that if—? Obama, for example, has made it pretty clear he wants to raise taxes – that type of thing you think will stymie growth, do you think?
MR LIDDELL Tax and regulation – those are the two big negatives. So I talked about growth being the natural state of events, unless you have negative forces which stop it. Taxation is clearly potentially a negative force. The other, which wasn’t really discussed a lot in the campaign, is the level of regulations. So one of the things that has happened over the last few years is the amount of regulation that has come – the size of government, effectively.
CORIN And is that where your experience comes in, given your roles as chief financial officer in big corporates? You know first-hand what those regulations can do.
MR LIDDELL Well, certainly my views are less regulation, and generally speaking you need to have some, just for orderly markets. But less regulation, less tax, less government – smaller government. So basically, the ideological argument that was going on in the last election, which was lost in a lot of the flavour, was around a larger government versus a smaller government. So generally speaking, I favour smaller.
CORIN On the fiscal cliff – this idea that we’re going to see a sort of convergence of tax hikes and spending cuts at the same time – what can be done? Do you think that the Republican house and the President can get an agreement on this?
MR LIDDELL Well, that’s going to be fascinating. That’s, you know, a multibillion-dollar question.
CORIN Is there potential for disaster if they don’t?
MR LIDDELL There's certainly potential for a lot of uncertainty. The combination of the tax increases associated with the fiscal cliff and the cut in spending. So it’s both sides of it. It’s tax increase and lower spending in defence and across all of it. It represents something like 4% of GDP – that’s the generally agreed number. So if you take 4% of GDP out of a country in one single year, you obviously are risking another recession. Nothing’s certain in the world. Nothing ever plays our exactly the way you think it is. But to have something like that as a dead weight on the economy – which is generally speaking just getting back on its feet, or starting to – that’s a tough call.
CORIN So in a word, it’s serious?
MR LIDDELL Oh, it’s absolutely serious, yes.
CORIN Chris Liddell, thank you very much for coming on Q+A.
MR LIDDELL Thank you.