Monday, March 24, 2008

Close to Home 

For some, the meltdown of the financial service industry is a distant affair taking place in Manhattan. What they see are "For Sale" signs in front of homes in their neighborhood. This case of financial meltdown is occurring down the street from where I live, and the company was a client years ago. It is interesting that CIT's difficulties did not come in its traditional business. They came from the CEO's decision to expand into riskier but more lucrative markets.

CIT had long been considered a sleepy, but profitable company that performs vital financing to industries such as heavy machinery. It was a hard company to publicize because much of its business was bland, and it wasn't a market leader. Its invisibility was the fate of most companies in the world that do good but boring business. Perhaps CIT was best left alone to do what it did best, but, on the other hand, there was less chance of long-term growth. That is the kind of conundrum that keeps a CEO awake at night.

I wish the company well in its present difficulties. It is now in the news columns, but not in the way the company would like. If CIT emerges whole and still independent, my guess is that it will be relieved to return to anonymity and the largely invisible work that it has long been doing.


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