Dward Farquar's Blob
• Dec. 4, 2005 - Q: What's wrong with American cars?
A: The American auto industry.
The answer lies in the nature of corporate America
and the qualities necessary to succeed in that environment. The
established corporations, like GM, Ford, and Chrysler, are made up of
men that rose to the top by being managers rather than innovators in
design and product. Just think Edsel as opposed to Henry Ford. Of
course these fellas can change, but the areas in which they excel are
cost management and maximizing return on investment. Unfortunately the
investment is in facilities to make traditional American sedans and
trucks. They have coasted on the success and stability of pickup trucks
and truck based SUV's while market share has shrunk and the very nature
of the industry has change dramatically. Take away those trucks and
SUV's and all that's left is a burned out shell of former greatness.
Even their economy cars are of Japanese design with slightly different
trim and nameplates.
The man in
charge is a committee. It is made up of homogenous WASP, middle age (or
older), upper middle class men. They are not the kind of people that
love cars or are passionate about them. For decades their styling
departments have produced new concept vehicles for auto shows that were
never produced. The success of the American auto occurred in an era of
cheap fuel and pre-European and Japanese competition. Foreign cars were
ridiculed in the fifties and sixties and branded impractical due to
lack of a service network and parts availability. They were the
vehicles of geeks and eccentrics. The failure of the Americans to
respond to the gas crunch of the early seventies was a continuation of
a long running phenomena. Almost every innovation in design and
technology came from individuals rather than the industry. Even the
design of the van came out of southern California
car culture. When people began to customize them, the auto industry
introduced factory packages based on the same concepts. The force for
innovation came from that peculiar American trait that results in
wondering what would happen if you put a chain saw engine on a
skateboard! They have been years and even decades behind in fuel
economy, safety, and styling. The age of their typical customer has
risen steadily to where they are making cars for 50-60 year olds.
But eventually
foreign cars made inroads as a result for of the need for fuel economy
and a smaller size to fit in the city. This led to another trait of
American industry. When faced with real competition, they fall back on
the one sure thing they have, Politicians in their pocket. They cash
the check and call in the markers. They hold off safety standards, fuel
economy, and anything else necessary to maintain their survival and
protected status. They needed to squeeze the last drop of utility out
of their aging industrial base.
In contrast,
the Japanese industry has way fewer mangers, they make about 10-15%
more than the line workers. They are masters of incorporating new
technology in product. Of course the western industrial world is the
innovator in new breakthroughs but they are really slow in the area of
incorporating them into products. The Japanese have it in a car or a
piece of consumer electronics by next Tuesday. American corporations
have a whole bureaucracy of management making 50- 300% more than the
folks on the factory floor. One other aspect of resistance to change is
organized labor. They want to keep making the same thing in the same
place in the same way. This is "job security" And let's not even
mention robots and automation. The deserted factory towns and the decay
of cities like Detroit are the social manifestation of all of this.
Every now and
then an exception comes along like Iacocca and the Mustang. But the
future, it looks bleak. Can it be salvaged? Probably not. It is running
counter to the most significant economic change since the dawn of the
industrial age. The west is a small percentage of the world's
population that consumes the overwhelming majority of the world's
resources and production. If you think that won't change then you are
living in a world where 4500 pound Roadmaster's will rule eternal. The
one big "if" is whether this change can occur without ending in the
same way these conflicts were resolved in the past. In that area the
big technological breakthrough has been nuclear. Nightmares about the
"bomb" anyone?
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