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I, Cringely - The Survival of the Nerdiest with Robert X. Cringely
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The Pulpit
Pulpit Comments
December 07, 2008 -- Insanely Great
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If Chrysler were even to think about shutting down all of its manufacturing capacity, there wouldn't be a whimper; there'd be a nuclear explosion. Let me explain to you how it works:

UAW -> Congress -> Chrysler "No, you won't. The law to make sure you don't will be on the President's desk within fifteen minutes, and Our Boy Barack will sign it if he knows what's good for him. Oh, and for America, of course."

But keep on dreamin.' It makes great entertainment.

Tim of Angle | Dec 07, 2008 | 10:08AM

Steve's most important design concept is "user experience"!
(Remember the Mac? The iPod? The iPhone? iTunes?)

This is the difference between American and German cars!
(OK, except the Harleys...)

Maybe your McDonald's/charging stations is in the right direction. Add Starbucks...

Luis Alejandro Masanti | Dec 07, 2008 | 10:18AM

a design, marketing, sales, and service organization. What's wrong with that?

Absolutely nothing! This concept is quite intriguing - and demonstrably profitable.

then sell you whatever is required to fill up the car

But this is clearly the concept's coupe de grace. Bravo!

Mini2Go | Dec 07, 2008 | 10:23AM

If Job's ran a car company the cars would only run on that companies tool roads.

avram miller | Dec 07, 2008 | 10:41AM

Jobs wouldn't have been able to do a thing if he had to deal with a union like UAW (United Apple Workers), and the company would have been deader than dead before the turn of the century.

UAW | Dec 07, 2008 | 10:41AM

Your scenario would be similar to the companies going Chapter 11. And that's been widely refuted as a possible outcome for at least one reason.

An Apple product is a luxury, and even at their prices a moderate expense. A car is the 2nd biggest purchase most people make. Consumer confidence in the company, the support the warranties is critical. It would disappear in bankruptcy or your outsourcing.

More important you should give Thomas Friedman credit for the Jobs idea, he mentioned it in a column several weeks ago.

Jack | Dec 07, 2008 | 10:47AM

Many(most?) successful Businesses and industries seem to get to a point after several decades existence and without crushing competition of find it extremely difficult of making a significant break from the past to return to a progressive, innovative and highly profitable company. Your article does a very good job of possibly how to transplant success via LEADERSHIP AND VISION; which seems to be pretty uncommon in long-standing entities...IT has either been driven out or suppressed to the point that the company/industry is a sitting duck to a competitive and likely newer entity that can out innovate and outmaneuver the lumbering giant. Steve Jobs saw that internal manufacturing was a part of become a slow maneuvering behemoth and was able to get that work done without owning the manufacturing process(and realized the "greatness" of the product was a result of great design, features and quality and NOT controlling the manufacturing process.

I work in Education and most of the Public Education entities are now at least 75 years old since the the last restructuring (one-room schools to consolidated Township and city schools) and 40+ since last big growth spurt(1960's). They too are now lumbering along thinking they are doing a great job when they are merely doing OK(when compared to schools abroad this really shows) but they aren't competing for funding and resources with them so they do not feel compelled to reinvent themselves(and have the same "labor" obstacles to overcome. The cost per student is a bit crazy(our state is about $8000/student/year(!) which means that it take $400,000 to educate 26 students for a year. Our district says that about 86% is people costs...

I would love your take on what K-12 Education would look like if Steve Jobs was it's leader!!!
(BTW, If you think I am off on a bit of a tangent, I believe our schools and their practices are a significant part of our country's current state of affairs including the greatly reduced ability to lead and innovate in the world; being the best at what you do and being creative are pretty much the opposite of what most public schools are imparting on our children; to be bland, similar, and not driven.) Unfortunately, many teachers are that way too and many stick in the classroom for a full 30 years to perpetuate it.

Gozman | Dec 07, 2008 | 11:07AM

A comment on dealing with the Union's; if the Big Three eliminates internal manufacturing, they eliminate the Union's impact on Manufacturing. They effectively remove most of the Union Jobs from within their organization and the competitive drag they cause; The manufacturing contractors would HAVE to be competitive and couldn't get wrapped into the type of Union deals that have ham-stringed the big three since it would prevent them from winning bids to make the next version of that car/truck or new product since the manufacturing process by it's nature MUST be competitive!!!


gozman | Dec 07, 2008 | 11:18AM

Observation 1: So, how's that working for Boeing?

Observation 2: The computer industry uses an iterative design process to develop its products. Put out version 1.0 and use the shrinkwrap agreement to protect itself while it watches and sees what glitches need to be fixed. No shrinkwrap agreement would protect Chrysler when one of those glitches kills people.

Phil Vincent | Dec 07, 2008 | 11:22AM

Some comments:
GM's announcement of the Volt in January of 2007 was an act of desperation (look, we can make a hybrid just like Toyota and it will be better -- wait for us to get there, please!).

The American car companies ARE in a desperate situation from the management's point of view. Yet, this is the US. Most mega-corporate officers are members of the good old boys club. If they drive one company into the ground (while making their millions) then they resign and wait for the next opportunity for a lucrative golden parachute. This time it may be different, however, if they get bought out by a foreign company such as Toyota or Honda. That represents a shrinking job market for US CEO's and CFO's, etc.
As for the radical "let someone else make the hardware" idea, the question is would the investors be OK with that. My guess is no, at least not until the stock loses 90% more of it's value and they become desperate as well.

Bob is right that there are far far too many models. It's especially inefficient and stupid for two GM companies to market the same car -- not even a trim difference -- under a different model name.

One of the stickiest parts of the problem is to reduce long term debt -- meaning auto workers guaranteed pensions, even if they get laid off or fired or quit or hell freezes over. It means that even if you outsource the manufacturing, you still haven't eliminated all of the production related costs since the workers could literally be laid off from GM, go to work for the new manufacturer, and still continue to collect a GM paycheck. I would guess that this one problem might actually drive the US auto makers to Chapter 7 bankruptcy.

David | Dec 07, 2008 | 11:43AM

Like Gozman, would like to see your Jobs take on education. Two bankrupt systems - Autos now, Education next. Both with humongous union contracts and resistant to change.

PXLated | Dec 07, 2008 | 11:52AM

Magma already makes complete cars under contract in Steyr, Austria as far as I know. I expect all car makers will follow the examples of electronic manufacturers and outsource non-critical parts of manufacturing.

Spencer | Dec 07, 2008 | 12:07PM

What the heck happened to the Gozman comment? It was there when I commented. Didn't know you were into deleting comments :-(

PXLated | Dec 07, 2008 | 12:09PM

Ooops - It's there, just not showing on the first page - Sorry!!!!!

PXLated | Dec 07, 2008 | 12:10PM

I think its reached a stage where something as radical as putting Steve Jobs in charge might work. I think he would only be truly successful if he has a personal interest in cars or gets some "car guys" as advisers. Lets face it his advantage in running Apple is that he understands his customers better than anyone else.

martin@talkingfuture | Dec 07, 2008 | 12:11PM

I don't buy the outsourcing thing at all. The US car companies already suffer from a perception of poor quality, and that's unlikely to be improved by outsourcing. If they were a niche manufacturer who just couldn't afford to develop the necessary experience in-house, that would be another story, but if they can't do it in their own plants with their own workers, they certainly won't be able to do it using other people's plants.

Recharging stations at McDonalds is an awesome idea, though. Don't put them on the drive-through, either. Park your car, start the charger, and now you have 20 minutes to waste. What better way to waste it than sitting down and watching your kids run around in the play yard?

Scott Hess | Dec 07, 2008 | 12:13PM

A few problems about outsourcing your entire auto production. Cars are a bit bigger and more expensive to build than computers and other portable electronics. The iPod could be outsourced because it depended upon standard parts and the total cost is about $100 per unit.

Cars would be trickier. It's one thing to take on building iPods. The components are all readily available. The main distinction is the software. Cars are about 99% hardware and a touch of software. You have to build customized components for most of the car, and the cost for each is between $15,000 to $30,000. Outsourcing something like this could be expensive. Look at how the various auto part third party manufacturers are doing. Most are teetering on bankruptcy. Chrysler might be free to redesign their cars every year, but they won't find a company who'd commit to that.

It is also extremely important that the auto companies build a wide variety of vehicles. Unlike PCs, you can't change on a whim every six months. You got to plan ahead a couple of years. One of the problems big three is that they practically deserted the small car and sedan market. They'd become big hulking giant SUV and truck specialists. When the market suddenly changed, they had nothing anyone wanted. Toyota and Honda build a wide range of cars from the tiny Yaris and Fit to the Takoma and Ridgeline pickups. They're prepared for anything that the market might throw at them.

The big problems at GM can be whittled down to one simple statement: Cheap looking dashboards. For the past two decades, auto reviewers have complained about the cheap looking dashboards and interiors on GM cars. Now, is Toyota and Honda making dashboards out of exotic hardwoods and rare earth metals? No, they're making their dashboards out of the same cheap plastic too. But, they've taken care that they don't look cheap. What's the cost for Honda and Toyota for doing this? $100 per car? Maybe $200 per car? Maybe nothing. But, the point is that GM has known about a major complaint on their cars for 20 years, could fix the problem for practically nothing, and hasn't done a thing. This is one tip that the auto companies could take from Jobs: It's all in the details.

GM has an advantage over Toyota (and where I think you do have a point). About five years ago, McDonalds tried to figure out a way to make its hamburgers taste better. They spent two years, and the only thing they could come up with was add a bit more salt. What McDonalds discovered is that anything that might enhance the flavor for one group made other groups like the hamburgers less. McDonalds was stuck making bland hamburgers because anything they did would lower their overall sales.

Toyota, being the industry leader is now in the same position. They make vanilla wafers. If they go all out and make a sportier model, it ends up being a vanilla wafer with banana frosting. Toyotas are good cars, they handle competently, and they are well built, but they're boring. Toyota can't make more exciting models because anything they do will lower their sales.

GM and Ford can make more exciting cars. Their model should be Volkswagon and Audi. Make cars that are taut, handle well, and are nicely put together. Charge a bit more for them. People will buy them. Also, they should stop thinking that they are each other's biggest competitors. One of the few GM bright spots is Cadillac. A decade ago, Cadillac was running after Lincoln and dying. Suddenly, Cadillac realized their big competitor wasn't Lincoln, but BMW and Mercedes. They upped the quality of their cars, improved the ride and suspension, and completely redid the drive train. They even created a new engine: The Northstar.

Interesting, the Cadillac Northstar engine is one of the few dual overcam engines GM makes. Most other engines found in GM cars still use the older pushrod design. Toyota, Honda, VW, BMW, nor Mercedes has made a single production pushrod engine for years. That certainly says something about the problems at GM.

One more little detail: If I was GM and Ford, I'd be pushing for national healthcare. Both GM and Ford are paying for former employees' medical benefits. GM claims this comes out to $1800 per car. Imagine if the government picked up this cost. GM could then lower their overall costs by almost $2000 per car. Imagine if the cost of medical insurance was paid out of standard income tax. That would mean money losing GM and Ford wouldn't be paying for their own employee medical costs. Instead, these costs would be picked up by profit making Honda and Toyota. You think this would be something GM and Ford would have picked up on long ago.

David W. | Dec 07, 2008 | 12:26PM

Fahrvergnugen. Like the Packer's ex-quarterback. ;o)

al | Dec 07, 2008 | 12:32PM

What a great plan... to complete the economic colonization of the U.S.

Who would buy the Chrysler plants? I can only imagine a foreign company (whose home market is protected by the government). Like the Japanese and Germans, they'd employ Americans but play financial shell games and hardball extortion of local taxing entities to the point that the American tax payers would be subsidizing this new competition for the "domestic" industry.

My point is that these multinationals would either export profits to their "home" nation or shop for tax havens as their "HQ."

Unlike the fashionable (and super-rich) Tom Friedman, I'm totally mercantilist. Pull up the welcome mat for foreign entities that want to exploit our market. Make companies who sell in the U.S. pay their fair share of taxes for the privlege.

We've got a major market that they crave. Why should we "race to the bottom" by selling off our manufacturing and reducing our middle class to coolies?

SaltyDawg | Dec 07, 2008 | 12:35PM

Great ideas, as always! Now can you please give us a hint about the status of NerdTV Season 2?

Derek | Dec 07, 2008 | 12:36PM

What a great plan... to complete the economic colonization of the U.S.

Who would buy the Chrysler plants? I can only imagine a foreign company (whose home market is protected by the government). Like the Japanese and Germans, they'd employ Americans but play financial shell games and hardball extortion of local taxing entities to the point that the American tax payers would be subsidizing this new competition for the "domestic" industry.

My point is that these multinationals would either export profits to their "home" nation or shop for tax havens as their "HQ."

Unlike the fashionable (and super-rich) Tom Friedman, I'm totally mercantilist. Pull up the welcome mat for foreign entities that want to exploit our market. Make companies who sell in the U.S. pay their fair share of taxes for the privlege.

We've got a major market that they crave. Why should we "race to the bottom" by selling off our manufacturing and reducing our middle class to coolies?

SaltyDawg | Dec 07, 2008 | 12:36PM

Bob, you missed a trick by not suggesting that Steve and/or Apple will be the big investors in Gordon Murray's new venture, the T25.
Gordon's been working on a 'holistic' concept that offers:
1. Lower purchase price – substantially less than current small cars.
2. Low cost motoring – approximately half the annual running cost of a hatchback and purchase price pay back in 4 years compared with a small hatchback.
3. Parking – 3 cars in one parallel parking space.
4. Congestion – 2 cars in one motorway lane.
5. Running emissions – less than half the UK average.
6. Lifecycle admissions – at least a 40% reduction.
7. Protecting our mobility.
8. Putting the fun back into driving.
... and he recently announced: "Gordon Murray Design is already in discussion with potential customers for other versions of the car. We can offer anything from a simple licensing agreement for the manufacturing I.P through to a turn-key car programme to Job 1, including factory building design and assembly line layout."

peter from UK | Dec 07, 2008 | 12:39PM

Outsourcing might be helpful for bottom line profit. It sure won't help the middle class worker in the USA make a living wage with affordable health care and a decent retirement package. No middle class = less demand. Less demand = less market for any new automobile. Class dismissed.

Steve Stone | Dec 07, 2008 | 12:47PM

David W.,

I've been waiting to see if Obama uses the Neo-cons shock and awe tactic in this context. Obviously, a major factor in the Big Three's inability to compete is simply the health costs they're forced to pay.

Obama should roll national health care into a recovery package and let the Hooverite Republicans campaign on deepening the depression.

SaltyDawg | Dec 07, 2008 | 12:53PM

For starters thanks for a good read.

Personally I like your idea on paper. In real life i think there are many other factors at stake.

1. your going to run into problems with the employees losing there jobs. If you lay off the whole company i would bet that steve would have to have armed guards follow him around because someone would definitely try to assasinate him

2. I think the government has to high a stake in the companies... north american car companies are run like they are part of the government then and actual company

On paper though I think this would definitely work.... i mean really who thought apple would have recovered. and in reality they really didnt do that much.... they just made there products make more sense to people

I would say that steve running a car company the first car he made with an "i" in it would become a global selling phenomenon

Scott | Dec 07, 2008 | 1:06PM

The big 3 all have major quality issues compared to the Japanese and Germans. Their net labor costs are almost double because they've entered into an ever-escalating series of suicide pacts with their labor unions. Between labor greed and management incompetence these companies' net worth doesn't much exceed their cash on hand and physical assets. The market values their actual product lines, management, and labor as worthless. New cars - no matter what they are - aren't going to save the companies unless they're better designed and more competently and cheaply manufactured. The foreign competitors are doing this, and they're doing this right here in the USA.

The Big 3 are crawling to Washington to try to get cash to do ... I still don't know what. The $15 Billion bandied about won't even buy them 90 days at their current burn rates. We'd be better off just not printing the money (since the government doesn't really have it anyway - all they can do is dilute everyone's dollars). The only hope the Big 3 have - and it's slim hope at that - is bankruptcy. If the government must throw money at the problem, then it should guarantee the warranties of the cars made during the bankruptcy period (a very, very cheap option by comparison). Bankruptcy accomplishes two things - it allows them to renegotiate their crippling labor deals, and it puts a gun to management's head and forces them to make the other cuts necessary (lose the private jets, unprofitable product lines, etc) to get them back on their feet long-term. Yes, there will be a lot of short-term pain and job loss but otherwise we're just paying them to dig themselves a deeper hole (like the government did with the mortgage mess). Sooner or later, you can't dig any deeper.

Socializing health care as a solution cracks me up. Health care's an insanely complicated issue that I'm not going to delve into, but at best (with regards to auto manufacturing) it's a symptom, not a cause. Hypothetically, if the government eliminates health care costs (which it won't'; it will just move the costs from cars and whatnot to taxes), it reduces the costs of the competing companies as well. Remember, Honda, Toyota, BMW, etc. are busy profitably making high-quality cars right here in the USA. They just haven't tied boat anchors around their necks with insane labor agreements.

The other hysterical solution is electric cars, which most people want nothing to do with. Now that the problems with the financial markets have popped the speculation bubble, which combined with decreases in demand have dropped the price of oil back to reasonable levels, demand for paper-mache enviro-boxes is going to go back down too. And I can't be the only person to consider the fact that millions of plug-in cars will push our already strained-to-the-limit electrical grid right over the edge. Let's see: we want to drive electrical cars because they're environmentally friendly (whoops, except for the batteries) but we can't build more power plants because they're not environmentally friendly. And please don't even bring up solar and wind until they're capable of making a dent in the supply problem, because right now they're not (feel free to check actual production of wind farms versus predicted capacity, and then try to find something over 50% - you can even find nice little numbers like 10%).

Trying to solve real-world problems in the here and now with pie-in-the-sky solutions is fine, but do it with your own money. Oh, you won't? Then shut your hypocritical mouths.

ErikTheRed | Dec 07, 2008 | 1:08PM

Henry Ford the first had the right idea in terms of product line consolidation. There was only one version of the Model T, and you could get it any color you wanted as long as what you wanted was black.

Dean Loomis | Dec 07, 2008 | 1:12PM

The aircraft business was once like the auto business. I live in Wichita, KS where virtually all the major general aviation aircraft manufacturers are located. The biggest of all was Boeing which had an enormous factory here since World War II that had slowly become underutilized and every three years they had a hugely contentious negotiation with the union that often resulted in a strike and always resulted in Boeing continuing to be uncompetitive and inefficient.


And so Boeing did what Bob suggested. The sold the entire factory to a privately held, entrepreneurial company for not much more than the value of the real estate. They then contracted with that new company to build the exact same products they were making before. The union refused to play ball with the new company so the new company simply walked away and started one by one offering jobs to the employees they wanted as well as new ones. The conventional wisdom was that this was going to be a disaster for the community.


Except that it hasn't been. Out from under the shackles of we-can-only-build-Boing-products the new company Spirit Aerosystems is now manufacturing advanced composite parts for most of the big aircraft companies. And because they are profitable, and growing they continue to hire and expand their payroll.

And now Boeing has a scrappy, entrepreneurial and lean vendor they can turn to to make the new products they design. And so do all the other aircraft companies in town. And the community as a whole did not lose jobs in the long run but rather gained them. The factory is still there but now it is busy and so are the workers.

If Chrysler spun off its factories as a separate company that company would have an enormous amount of manufacturing assets and knowledgeable workers. And once it renegotiated its labor deals and community tax incentives it could begin making cars not just for Chrysler but for GM and Ford too.



AMD recently went through a very similar transformation splitting its chip design business from its chip manufacturing business. There is reason that so many companies in so many industries are doing this. Being good at product design and customer service doesn't have anything to do with being good at manufacturing things. It would be a rare company that could do both well.



I believe Bob is right. The traditional American car companies have mindset blinders on and until it takes them off it will continue to spiral downward.

MarkBookPro | Dec 07, 2008 | 1:21PM

one more thing to add about the reason that US car companies cant survive.

when compared to foreign companies both have the same amount of money. The reason that NA manufacturers cant make a buck is that they spend there money a different way......

NA makers - 70% goes to employees 30% goes to R&D and whatever else

Foreign Makers - 70% goes into R&D 30% goes to employees

i mean really get bob to put a $3 part in your ford for $25 an Hour or get Jose to to put a $15 part in a car for $5 an hour

THIS is the main reason people buy german or japanese.... the quality is better

Scott | Dec 07, 2008 | 1:22PM

First, thanks for years of thoughtful informative reporting. I will miss you.

On to the topic of cars...
Perhaps if one of those executives would declare the elimination of the internal combustion engine. It has recently proved itself to be old technology. The future has very little place for the beast. Analog TV, Analog radio, buggy whips, adjustable mortgages, internal combustion engines. All at the end of their lifespan.

Thanks!

Tim Keeling | Dec 07, 2008 | 1:23PM

The BMW X3 is basically "outsourced", as described.

Syd | Dec 07, 2008 | 1:24PM

Ok,

This article is interesting...

How would Steve deal with the union contracts? He never had any of those to deal with (as I understand it). And frankly, the current Big 3 CEOs weren't the ones that originally agreed to union contracts -- but, more than any of their predecessors have been able to gain historic "concessions" from them...

One tactic Congress might take -- dissolve the union contracts (use the TARP, National Security, conservatorships, whatever), and say that no unions may be formed at the Big 3 for 20 years. Then, see what they can do -- maybe they have some great ideas, but haven't brought them to market (though, I doubt that).

In terms of bundling vehicles and the fuel they run on -- Honda is (sorry to say this), way ahead of everyone. Hydrogen can be easily created from the natural gas that is in a huge percentage of homes in America. And, they've invented a cheap device (costs a couple hundred dollars and is easily installed) that allows one to fill their vehicle with natural gas. So, they've already beaten Steve to that punch -- and have created *way* more possible refilling stations (1 at every home, including your own) than we'd get using McDonald's or some other drive-through that exists ubiquitously (though, that wasn't a bad idea).

Electric isn't bad, but storage in some other means (petrol, hydrogen, etc) seems to be a better way to carry around more potential energy better (and is much faster to replace quickly).

The chicken-and-egg problem of fuel replacement could also be easily tackled by the government as a means of national security (the feds could take over all the existing stations, and install hydrogen conversion pumps using existing natural gas resources -- imagine, never needing a "delivery" of fuel ever again). And, McD's could participate as well (if they chose): they could even provide both natrual gas *and* biodiesel (thus, enhancing their own bottom line by finding a way to turn what is likely their current largest waste product into something someone will pay them for.

Why GM especially doesn't recognize that selling the exact same product under the Pontiac, GMC, Chevy, Saturn, Saab, and Buick (plus others under Cadillac, Hummer, and Olds) -- that's clearly the "old boy" network at work (or perhaps, some strange side effect of dealership franchise laws that must also be suspended.

The practice that does appear to work is to have 2, 3 brands maximum (see, Toyota/Lexus; Honda/Acura; Nissan/Infiniti; VW/Benz; etc). I propose the following US brands for GM: Chevy (sells sedans against Honda/Toyota), Cadillac (sells sedands against Lexus/Acura), and GMC which sells trucks and specialty vehicles.

Ford already seems to understand this, and has started its brand elimination strategy. Chrysler is basically 3 brands already.

The last thing that needs to change, and Ford uas unfortunately gotten in league behind Microsoft rather than Apple already -- is the user interface/experience (as one of the previous commenters pointed out). Sync is the beginnings of radical thinking for these people. And, more electronics will likely help move this further along. Perhaps Detroit should reach out to Silicon Valley for more talent and ideas on how to enhance or change the user interface/experience. There's a lot of bright talent with creative ideas out there -- the culture needs to change to take advantage. And perhaps, that is some place Steve Jobs could help with.

Health care and education need to be dramatically over-hauled. Doing so now *would* help Detroit, but it would also help everyone in the country. Its a tougher nut to crack, and shouldn't slow down or distract from solving the Big 3 issues.

M Sheridan | Dec 07, 2008 | 1:34PM

Scott's comment that here in the U.S. we spend more paying labor is correction, but it doesn't get the full picture. Both Japan and German have nationalized health systems. The auto companies don't pay for health care, everyone shares in the expense. If here, in the U.S. we had single payer (not socialized) health care, the cost per car--according to the car companies--would be $1,500 less to consumers.

However, the real problem is that the heads of the car companies are not "car people." They are marketers, and they have made so many mistakes--repeatedly--that they should be fired and replaced by people who are actually familiar with the industry.

Don | Dec 07, 2008 | 1:46PM

Fahrvergnügen, that is. With an ü. :-)

Greetings from Old Europe,
SK

SK | Dec 07, 2008 | 1:49PM

Hi Bob,

Like many people, I have enjoyed your column immensely over the years and already miss its imminent non-appearance. I can't believe there wouldn't be at least 1000 people (and I suspect a lot more) who wouldn't stump up $5 a year for a weekly email version of your column. If you have no interest in $50,000 fine, but why not give it a go?

Best regards,
Francis Ainley

Francis Ainley | Dec 07, 2008 | 1:51PM

Of course, one person who always did proudly compare his company with the Detroit auto makers was Scott McNealy. Look how well they're doing now.

leeg | Dec 07, 2008 | 2:13PM

Love the thought of Cringely applying different thinking to a new industry. There's certainly lots of room for new ideas in the Big Three. But there are a lot of things about the current debate that are very bothersome.

Bad as management at these companies has been (and there's a wide variation there, with Ford having made many good moves in the last few years), the government and the American public are not completely innocent, either. CAFE regulations which penalized car companies for the corporate average fuel economy of their sales created a situation where they were fined for complying with market desires. By refusing to do the right thing and decrease domestic fuel consumption through a gasoline tax that would modify demand, and allow auto companies to respond to real market conditions, we've made it very difficult for a manufacturer to function with the US as his home market. Heavy gasoline taxes in Europe and Japan have guaranteed their domestic manufacturers with a stable base of demand for fuel efficient vehicles. In the US, American consumers go from demaning SUVs and gargantuan gas guzzlers one week to super efficient superminis the next --- and when gas prices dropped a couple months ago, then right back to demanding gas guzzlers. The reality is that heavy manufacturing can't retool in a time frame much less than a couple years, and part of keeping your country's auto business world-competitive involves padding out fuel cost fluctuations to provide a stable environment that pushes them in the correct long-term direction (at least for national security, which we now begin to realize overconsumption of petroleum risks). The thing Americans and the Congress seem to forget is that the Asian and European manufacturers were kept from deluding themselves that they could survive on the niche of building fuel-inefficient trucks, SUVs, and piggish sedans only because the high fuel taxes in their home markets made that impossible.

Cringely's suggestion for Chrysler pulling out of the manufacturing business is interesting but has some problems. As others have pointed out, manufacturing quality is one of the biggest determinants for most buyers in buying a vehicle, and quality is obviously tied closely to who builds your vehicle. The obvious lesson of the auto market is that auto production is still not the commodity business that laptop production seems to be.


However, the idea of separating, consolidating, and winnowing the manufacturing arms of at least a couple of the American manufacturers (think GM and Chrysler) and then setting up independent design companies carrying the traditional names would could certainly be at least worth some consideration and discussion.


Incidentally, Ford and GM DID speak out about the need for national health insurance reform about 10 years ago. They specifically pointed out --- correctly in my opinion --- that, by providing coverage for all their employees in a system that lets other employers get by without offering coverage, they were essentially subsidizing other businesses. But eventually they were told to "butt out".

J. Bounds | Dec 07, 2008 | 2:17PM

If you want to look at what is possible to help the US Big 3 transform themselves, look at NUMMI.

Saturn was an opportunity that wasn't fully realized; Saturn's main problem once they launched was their bland cars that weren't as high quality as they should have been starting from scratch, being separated from the other GM brands and aiming for Japanese and European car makers...
They unfortunately ended up more like GM which is what the brand was trying to break FROM.

gozman | Dec 07, 2008 | 2:32PM

Brilliant idea! (as usual...)

Too bad Obama didn't get you as a visionary advisor. There's time yet.

Some of the comments refer to all those manufacturing employees losing their jobs... well, that's not really what would happen. Some smart enterprising people (maybe even people from Chrysler) would band together and get financing to buy those plants from Chrysler. Lots of people currently employed at those plants would remain employed under new ownership.

The new owners wouldn't necessarily be foreign (as if foreign ownership is a bad thing), so all you worry warts about economic colonization can calm down. It's happened anyway... who owned Chrysler before Cerberus came along?

The point is that if nothing radical is done, either all those Middling 3 will be owned by foreigners thanks to our horrendous national debt (the Chinese own us right now, by the way) or they will shut down completely. Take your pick. Americans have had their say in how they run their own car companies, and they have blown it.

TKN | Dec 07, 2008 | 4:07PM

They won't get a bail out if they say they are going to outsource car production. And if they don't get a bailout, they don't even have enough cash to get to the point where the could outsource.

Besides, who wants their car made in China? At that point it's just a race to the bottom. I don't like that.

Sean Benton | Dec 07, 2008 | 4:21PM

UNIONS would stop Steve in his tracks. UNIONS for the most part don't exist in tech, so Steve can set his won rules and everyone plays by Steve's rules or bye bye. The Japanese auto companies saw the UNIONS as a problem and worked around them quite nicely. Our big 3, like Microsoft in the not to far future, will be no more. Doesn't Steve drive German car(s)?

hiscross | Dec 07, 2008 | 4:21PM

Better idea: Clone Steve and send the clone to Detroit. Don't screw things up at Apple. My first computer was an Apple II Plus, and I've been Apple ever since.

Dave Hoban | Dec 07, 2008 | 4:25PM

Better idea: Clone Steve and send the clone to Detroit. Don't screw things up at Apple. My first computer was an Apple II Plus, and I've been Apple ever since.

Dave Hoban | Dec 07, 2008 | 4:26PM
In this scenario, Chrysler becomes a design, marketing, sales, and service organization. What's wrong with that?

Everything, actually.

First, once manufacturing is gone, serious R&D becomes the next casualty. The top managers typically, with good reason, try to put it off onto the new system builders. That durability problem isn't a design problem it's a fabrication problem. Without serious R&D both the company and country begin to suffer with all advancement taking place elsewhere to someone else's benefit.

Second, by outsourcing manufacturing the company/country begins to subsidize the learning curve of another company/country that will eventually move up the supply chain and begin designing their own products. Case in point - Lenovo and the multitude of other Asian manufacturers that made their bread and butter building other companies' specs but are now making/selling their own designs.

Retaining our manufacturing base, R&D and basic science research is critical to the long term success of this country as well as the companies that rely on these things or their intangible benefits.

Once a nation no longer makes things and merely acquires them, they are at the mercy of their suppliers. That is not a position that is in the strategic long term interests of this country or any company operating in it.


Suggested reading: Winner Take All: How Competitiveness Shapes the Fate of Nations, by Richard Elkus.

TexasRob | Dec 07, 2008 | 4:32PM

They don't need Jobs, just reprint this article as a company HowTo should do the trick

Rob | Dec 07, 2008 | 4:44PM

I often think about the comparison between the car industry and the computers. Computers evolve gradually over time - but they do evolve. Compare your laptop from 10 years ago with the one today - it is substantially improved along many dimensions. Cars don't change that much. We are still using the internal combustion engine. It's what 27% efficient at best? Yet we don't evolve into anything better. Car companies are extremely slow in adopting new technology and embracing change. Its for that reason that you have really interesting start-ups like Tesla or Aptera who can quickly make revolutionary cars that, if they ever could be released, have the potential to rock the industry.

I really just assumed that the car companies were in the oil company's pocket. I guess I was wrong and they are just purely incompetent.

roz | Dec 07, 2008 | 5:05PM

Bob, your man-love for Steve Jobs is apparently in full bloom.

If he took over a car company would his first product be a car named Lisa that looked like a lamp (only with tires and a steering wheel)?

Have you ever even stepped into an automobile assembly plant? The idea of outsourcing final assembly is "insanely" impractical. Cars don't just snap and screw together like computers. There is a lot of hands-on finishing involved. That sort of work requires a very close association with the engineers. Small problems crop up continually.

In addition, the investment required to tool and set up a plant for car assembly is huge. Computers are much more simple. I can assemble my own computer in about 3 hours -- but I'm not planning on building my own car. Cars and computers are VERY different animals.

Johnny

Johnny | Dec 07, 2008 | 5:28PM

Why does everyone praise Jobs? Why not praise Linus Torvalds?

Apple is only in business due to American anti-Monopoly laws, otherwise it would have gone down the same path as Commodore, Atari and Osborne. In the same way, Chrysler is only in business due to the same anti-monopoly laws.

My suggestion is to tell the government to stop intervening and let them stand on their own feet. If they fail too bad.

If necessity is the mother of invention, when the time is right the auto industry will make an appropriate advancement.

snappytom | Dec 07, 2008 | 5:49PM

Bring on the iVette!

(They can make fiberglass in translucent Bondi Blue, right?)

$5 a year for 52 weeks of Cringely? Send me a PayPal request.

unitron | Dec 07, 2008 | 5:52PM

"farfegnugen" - I am German and smiled reading this word. You spell it "Fahrvergnügen" in German.

Andi | Dec 07, 2008 | 6:02PM

Since Jobs loves German cars so much, let's have a German company run Chrysler!

Oh wait, a German company did own Chrysler, and then dumped it. Leaving it with no products in the pipeline (and asking for billions from the US government).

Bob, you are the one having delusions.

Larry | Dec 07, 2008 | 6:12PM

$5?? My $10 is waiting...

Ron Burns | Dec 07, 2008 | 6:20PM

farfignewton a cookie on a hill far away.

cowhide | Dec 07, 2008 | 6:22PM

Bob,

I'm a huge fan. The unfortunate thing about reducing makes is:
1) buying out dealerships. This system is bad and they shouldn't create new dealerships going forward, yet they have a quagmire with existing makes.
2) Brand Loyalty, if you discontinue the Bonneville, will people buy a new model car from you?

Alex Birch | Dec 07, 2008 | 6:25PM

the fallacy to this arguement is that cars are complete systems and have to be reliable. Imagine your engine dying due to software / hardware incompatibility driving on the freeway...

nick | Dec 07, 2008 | 6:25PM

The first problem is that in good times, automakers are revenue gushers. This helps them paper over such errors as emphasizing trucks over cars because trucks are more profitable.

Indeed, the Big Three essentially did what you suggested -- concentrated on gas-guzzling SUVs and large pickups because the Japanese and Europeans couldn't compete in that sector. They let their car business atrophy at the same time, making the bet that gas would never spike in price -- much like Wall Street gambling that housing prices would never drop.

Even given that error, in better times they could have regrouped into the car sector again, but the gas price spike and Wall Street implosion together made it too difficult. By the way, look overseas; Germany, France and China are being asked for money by their native automakers.

Sal Hepatica | Dec 07, 2008 | 6:41PM

You missed the most important part: eliminate the dealer networks and sell direct.

Oh, but that's a violation of antitrust laws (really).

The biggest problem with Detroit is their lousy dealers. Most of them are so big now that they wield ultimate power, hold the factories hostage (give us "factory to dealer incentives" or we'll put your cars in the back lot), They order a ton of vehicles that they know they won't be able to sell, they sit on the lots for months, and they finally hold a blowout sale. The customers know this and are more than happy to sit on their hands and watch the prices fall.

Meanwhile, the factory demands just in time inventory control from their suppliers, just to get cars to the dealers to sit on the lots. Why not tell the dealers to order on demand, all cars custom, just like Dell. Heck depending on how you tool the plant, it may be possible to develop multiple product lines in regional plants to reduce delivery times.

Eric | Dec 07, 2008 | 7:04PM

Bob, you don't understand Apple, cars or outsourcing.

1. Apple's secret sauce is software. The hardware is nicely designed, but look how fast competitors can copy it? Software is hard. It gives them a 5-year advantage on someone just mimicking an mp3 player, touch screen, or cpu in the monitor.

2. Outsourcing in the computer world works because they all use the same plug-in parts, and there are numerous contract assemblers all competing for your business. Car plants are all one-off custom designed. You can't just put out RFQ's because nobody has that capability. They would all have to start from scratch with a multi billon $ plant and tools design.

If Chrysler just sold and re-leased their own plants, nothing would change because the new owner would have the monopoly on their production.

3. The GM Volt will never ship in production volume. You heard it here first. The whole idea is a marketing ploy to get some buzz and give the politicians cover for their bailout funds.

I believe they will produce no more than hundreds or a few thousand a year. Then they can say they did it, and quietly shut the whole thing down. That is their entire history... fighting change, but at the same time pretending to embrace it. Even if they had a religous conversion and really wanted to ramp things up, there wouldn't be enough batteries to produce more than a few. Remember, despite long waiting lists, toyota can only make a few hundred thousand Prius's per year because they can't get any more batteries from their vendors.

Keep it up, Bob. I find your weekly naivete entertaining. Please don't ever grow up.

Mkkby | Dec 07, 2008 | 7:13PM

Sell the factories to the UAW at cost if they agree to split into 4 companies and bid for your contracts.


Neurotic Nomad | Dec 07, 2008 | 7:30PM

Maybe next week you can find the obvious parallel between cars and Moore's law...

Or how the financial crisis is like either Apple or Moore's law.

0r how radical religious fundamentalism can be solved by Steve Jobs, and explained by Moore's law.

Maybe in your next career you can teach a college course on how Steve Jobs and Gordon Moore pertain to everything past and future.

Mkkby | Dec 07, 2008 | 7:36PM

As my comment, I'm pasting in letter to Barack Obama and our Montana Congressfolks. The auto companies MUST go through Chapter-11 bankruptcy. Otherwise we're flushing more taxpayer dollars down the drain.

I write to express opposition to any taxpayer bailout of “Big Detroit” without a lot of strings attached; the first of which must be firing of the entire executive suite and most of the top-level senior management. Why?

1. These executives are incompetent.

It is their mismanagement which has brought their companies to bankruptcy. They are not worth their $$$$multi-million salaries, bonuses, perks, platinum parachutes, luxury aircraft and whatever else there is. I am very confident that we can obtain people who can run these companies just as badly (hopefully much better!) for one heckuva lot less money. The first place to start looking will be lower down in the ranks, plus replacement top management from outside.

2. The linkages between Big Oil and the
automotive industry (“Big Detroit”) must be broken.

Let’s face it: Big Oil does not want the nation converted to electric vehicles which need very little gasoline, or better yet, no gas at all. Big Oil has sabotaged alternatives-to-gasoline and gasoline-efficient technologies for decades.

It is only due to our Internet of today that inventors can freely communicate with one another, not be murdered or picked off one-by-one by Big Oil, and so innovative concepts are instantly distributed world-wide.

Big Oil and “Big Detroit” don’t like electric cars because they’re too reliable. The Direct-Current electric motor has only one moving part instead of hundreds, and, if equipped with good-quality ball bear-ings, like pre-WWII motors, can last for decades. Also, this fuel-cell-hydrogen stuff is a lot of nonsense. Big Oil wants everybody to have to fuel up for hydrogen at high prices, at their service stations. And Big Detroit has always wanted cars to break down frequently and need lots of replacement parts; plus not last too long.

3. These companies need to enter Chapter-11 bankruptcy.

Only a bankruptcy judge in the courts can quickly clean this mess out. The first thing he’s going to say is something like:

“This company is broke. It has no money left. If it is to emerge from bankruptcy as a viable restructured entity, I am ordering the following changes immediately.”

a) The stockholders are out; the stock is worthless. In exchange for a taxpayer bailout, the taxpayers will own the new company for an indefinite period of time.

b) The CEO and executive suite is fired. They will be escorted to the entrance. Their salaries and all benefits cease immediately. Their contracts are herewith declared void. Their luxury aircraft are to be sold as soon as possible for cash. If rented, these contracts are void and the aircraft are to be returned immediately to their respective owners. All employees involved with “serving or coddling” the executive suite are dismissed without notice or severance pay.

c) Current employees: All contracts with the UAW and other labor unions are null & void and terminated. Provided cash is available, one-half of current salaries and wages will continue to be paid for one month, during which time all employees may apply for re-employment with the taxpayer-owned reorganized company, on a case-by-case basis -- at wages to be set by its management, in individual private agreements for 5 years; and relocation to another part of the nation at the employee’s expense may be required.

Pay for any employee not actually doing work (such as at “standby” in an idled plant) shall terminate immediately without further notice nor severance pay.

d) Retired former employees: All contracts, including retirement plans, pension plans and medical benefit plans with the UAW and other labor unions are null & void and terminated, because the company has no cash remaining with which to pay.

4. The taxpayers are to own the company.

If taxpayer’s funds are necessary to bail out these companies, then in return the taxpayers must own the company so that these funds are not wasted away. It is not going to stop at just $12-13 billion for General Motors. Some are saying this will become $30-50 billion or even much higher.

The present management cannot be left in place because under their direction the money will be dissipated away and routed to other countries, rather than have a company based in America and employing American workers. These executives of today have no loyalties to America; and as to American workers, the attitude seems to be: “Let Them Eat Cake.”.

At this very moment General Motors is building a new plant near St. Petersburg, Russia; reportedly to build SUV’s. This is not what we need in the United States -- to put Americans back to work.

There must be a very careful examination of what our nation’s priorities need to be. I venture to suggest: we must end our dependency on Middle East oil, and I assert we can do this in less than five years. Then we won’t need their oil nor even care what happens in that unstable area of the world filled with religious lunatics. They’ve been fighting with each other for at least 5,000 years and that’s not going to change.

When Franklin D. Roosevelt was President, and World War II faced the country, Roosevelt said to General Motors and Ford: “You’re not going to build cars anymore. You’re going to build airplanes and tanks and guns and the things that we need for this war because we have a national crisis.” And so General Motors/Ford had to do what Roosevelt told them they had to do.

Today, Mr. President-Elect, you need to say to these companies: “Yes, we’re going to use this money to save these jobs. But we’re not going to build these gas guzzling vehicles any longer.”

We’re going to put the companies into some sort of receivership and we, the taxpayers (government,) are going to hold the control over these companies. They are to build hybrid cars. They are to build cars that use little or no gasoline, and plug in at home for overnight recharging. And they are to build mass transit.

There must be an urgent plan set in place to find other ways to transport ourselves besides using fossil fuels; we’re running out of time.

There must be a whole new management team at General Motors and Ford. The managements must be controlled and follow orders, just as it was under Roosevelt, in World War II.

The government has to step in and say,

“This is what you’re going to build. This is how it’s going to be built. Besides efficient high-mileage cars, we’re going to have a mass transit system in this country. We’re going to bring back light rail. And, instead of outsourcing everything to foreign nations: we’re going to employ not only the people that are currently employed, but a lot of the people who have lost their jobs around the country.”

We need a huge public works program. We need the infrastructure of General Motors. We need to restructure these auto companies so they become mass transit companies and companies that build cars that are hybrid or much more fuel-efficient and better for the environment. That’s what the country needs. That’s what the world needs.

We don’t need more badly-engineered, planned-obsolent garbage built by “Big Detroit,” of which Big Oil is the principal beneficiary, not the American people.

5. There must be no illegal alien amnesty

I am deeply distressed to learn last week that amnesties for illegal aliens are again set to be rammed down the throats of the American people, despite all the opposition from them that’s been recently expressed.

If you want to ever put Americans (meaning: Citizens and Legal Immigrants ONLY within our nation) back to work, such an amnesty must never happen; the illegal immigrants and others overstaying their visas will always be hired over Americans because they work cheap. In addition, we must vigorously enforce our existing laws requiring employers to check with Social Security for a valid SSN before hiring. Some heavy fines and jail time for a few executives will get the message across real fast.

Electric car technologies are here right now. They only require implementation, and this can be pursued within the existing automobile manufacturers once converted to taxpayer ownership and new management not controlled by Big Oil.

-- Joe

Joe | Dec 07, 2008 | 7:47PM

1. Bashing the UAW is pointless. They didn't create the problems, and they don't get all that much money. UAW labor is now less than 10% of the cost of a car.

2. I disagree that dramatic styling and performance are all that important. Look at the best sellers: F-series trucks, Camry, Corolla. Dull, dull, dull, dull. Except if you get the Camry with its V6, then it's very fast and dull.

3. Chrysler WAS doing great when they were chasing niche markets in the 1990s. Chrysler now is half-dead because of nine years of Superior German Leadership.

4. I agree about the brands and such, but a bit of car history: back when all those brands were first created, NONE were full-line. Chevrolet was entry level; there were one or two basic cars sold under each brand, with different labels for trim lines. You got "the Plymouth" or "the DeSoto." Sometimes they were even almost identical, as they are now, except for wheelbase and/or engine... but they didn't have a luxury Plymouth or a base model Chrysler, a luxury Chevrolet or base Cadillac.

5. I personally believe each automaker, like each auto customer, is different. The problems are different though arrogance runs like a common river across all three.

6. You nailed it when you pointed out that there's no great mass market of customers; each person is different. Detroit was nuts when they started making cars and small SUVs look bigger to try to appeal to truck buyers... car buyers are car buyers, and truck buyers are truck buyers, generally speaking.

7. A lot of the problem is perception, and there's nothing much reality can do about that.

david Zatz | Dec 07, 2008 | 8:17PM

When will the people begin to understand that electricity is not a form of basic energy. It is only a way to transport energy from one place to another. All the talk about eliminating the use of fuel is stupid -- you still have to consume some kind of fuel (or use wind or solar or nuclear) to make the electricity in the first place. Currently over half of the power produced in the U.S. is from coal. The massive power infrastructure needed to power electric autos doesn't currently exist nor does the does the generation capacity. It will take years to develop this power infrastructure and capacity so we need to get over the idea that we can mandate the use of electric cars by government.

--- Dan | Dec 07, 2008 | 8:25PM

It pains me to see the amount of union bashing and blue collar bashing going on during this crisis. We didn't see the media railing about white collar workers being overpaid. We didn't see calls for the white collar workers to give up their retirement benefits, health insurance or a third of their salaries. Yesterday on the radio I heard Bob Brinker spreading the lie that auto workers earn $73 an hour. That is absurd. That statistic was generated by summing up all conceivable costs for workers and retirees and dividing by the number of current workers. Note that workers put their own money into the pension funds. This did not all come from the companies.

I don't understand why the autoworkers have to give up their lives and their homes because of bad decisions in the corporate suites or greed and theft on wall street. They made an agreement to supply their labor in return for certain benefits. They provided their labor. They are entitled to the promised benefits to the extent possible.

I think it is important to keep the autoworkers employed at something close to their current wages and benefits. This is the middle class. If you put these people out of work you'll see a cascade of mortgage failures and bank failures that will dwarf what we are going through now. It sounds like a simple solution to

Some of what is being said is useful. Note that some of the expenses are written into a number of state laws. Most states protect auto dealers. It would take a joint session of governors and the feds to somehow come up with a nation wide rewriting of laws allowing the automakers to consolidate their dealerships.

I do agree that Detroit has far too many brands and is far too hide-bound in their designing. I would note however, that many people like boring cars. The point is not to make exciting cars but to make cars appropriate for the market. Some will be exciting, others will be staid.

I'm not sure that Steve would out source all manufacturing. There are plusses and minuses. Note that Steve seems to be bringing some manufacturing back in-house with the technology for building laptops. Manufacturing is very value added. If you do it well you make a ton of money.

Mostly I think that fixing the liquidity crisis will help the automakers. All of the auto companies are hurting, not just the US manufacturers. If we fix the liquidity we'll go a long, long way to helping Detroit.

John | Dec 07, 2008 | 8:52PM

"fahrvergnuegen"
"eerie"
Now that you're on your way out, you don't have an editor?

Dan | Dec 07, 2008 | 8:55PM

1. Bashing the UAW is pointless. They didn't create the problems, and they don't get all that much money. UAW labor is now less than 10% of the cost of a car.

2. I disagree that dramatic styling and performance are all that important. Look at the best sellers: F-series trucks, Camry, Corolla. Dull, dull, dull, dull. Except if you get the Camry with its V6, then it's very fast and dull.

3. Chrysler WAS doing great when they were chasing niche markets in the 1990s. Chrysler now is half-dead because of nine years of Superior German Leadership.

4. I agree about the brands and such, but a bit of car history: back when all those brands were first created, NONE were full-line. Chevrolet was entry level; there were one or two basic cars sold under each brand, with different labels for trim lines. You got "the Plymouth" or "the DeSoto." Sometimes they were even almost identical, as they are now, except for wheelbase and/or engine... but they didn't have a luxury Plymouth or a base model Chrysler, a luxury Chevrolet or base Cadillac.

5. I personally believe each automaker, like each auto customer, is different. The problems are different though arrogance runs like a common river across all three.

6. You nailed it when you pointed out that there's no great mass market of customers; each person is different. Detroit was nuts when they started making cars and small SUVs look bigger to try to appeal to truck buyers... car buyers are car buyers, and truck buyers are truck buyers, generally speaking.

7. A lot of the problem is perception, and there's nothing much reality can do about that.

david Zatz | Dec 07, 2008 | 8:58PM

It simply isn’t so that the electric grid will be swamped by electric cars being recharged at home overnight.

To begin with, millions of people actually drive less than 20 miles per day. They go to the office or workplace in the morning, perhaps stop by the store for a few items on the way home, and that’s it. Recharging a car used in this manner overnight is relatively easy.

Overnight is when the electrical grid has the most unused capacity. Generators are still spinning because a minimum of residual capacity must be maintained. Thus I cannot visualize any killer overloads of the grid in overnight recharging -- also if a car has been driven less than 20 miles the previous day, it isn’t going to take that long to recharge, and then no more demand from it.

But let’s look to the future when we shall have hundreds of thousands, and then millions of electric cars to be recharged. A special plug-in “box” on the garage wall combined with a “smart” electric meter will make the car capable of being recharged during a time frame set by the utility; at a special overnight lower rate. Such a lower rate will incentivize car owners to utilize it.

Computer-controlled by way of the power line, some cars -- for example -- will recharge from 9-10:00 PM, the next group starting at 10PM, the next group 11PM and so forth. If a car needs a little more time to fully recharge, it will continue to do so. By 6AM nearly all the cars will be done. As a part of this the car owner will advise the utility what time the car is normally needed in the morning -- the cars needed at the latest time could begin their recharge cycle as late as 4AM or 5AM.

We’ve got lots of real smart engineering people here who read Bob’s column and feedback would be appreciated.

And Bob, put me down for $10 annual subscription for your new email column!

-- Joe

Joe | Dec 07, 2008 | 9:00PM

Electricity IS MOST CERTAINLY a basic form of energy! We need to concentrate a huge amount of effort in researching solar cell technology. Converting photons to electrons so the energy can be stored in rechargeable batteries is so important! Only by reducing our dependence upon coal and oil will we reduce our dependence on our enemies to provide our energy. And only by reducing our burning of fossil fuels will we get the environmentalists to stop whining. Besides, they could be right about human-induced climate change.

Any time you can break the addiction or dependence upon some sort of input material that has to be purchased, you free up resources for another use. Look what happened in the photographic industry when we gave up film and film processing... Now we just recycle memory cards! We still consume some raw materials for DVDs and CDs and hard drives, but we no longer use as much silver and as many harmful chemicals and fresh water. The sun has all the energy we'll ever need! Let's find a way to harness it.

Bill Burkholder | Dec 07, 2008 | 9:34PM

UAW. They have strict guidelines on how many cars have to be made by the union or they walk. There is too much power in the union to rollout products like Apple. Outdated work ethics combined with lackluster products, the companies will never be saved.

dma | Dec 07, 2008 | 9:55PM

The Saga of "Foolish Carriage" and General Motors

This is a follow-up to my earlier letter and the second of a series.

It happens that I, an American citizen, still actually drive an American-made car. Its name is "Foolish Carriage" and it's going on 45 years old. She's a 1964 Buick Special 4D Sedan, with a V-6 engine. Made by General Motors (GM). Dad bought the car new in 1964 and I came to inherit it after he was gone. Since the car belonged to the folks, I've always had a sentimental attachment to it, and besides have always enjoyed driving it around.

That's the good part. Regrettably, it must be said that General Motors never intended for this car to still be running and in daily use today. It is only due to my stubbornness and determination that "Foolish Carriage" is still on the road. There's been problems.

Problem #1 was when the car came out of the factory.

It never had a good carburetor and automatic choke system for getting started in the morning. Dad turned the key, and VAROOM!!!
Off it went at 2,000 RPM. It stayed this way for about 20 minutes. The choke could not reset to a normal idle speed sooner as GM used this cheap 5¢ doohickey that picked up heat from the exhaust maniford, and the car couldn't get down to a normal idle speed until the lousy nemesis got warmed up enough.

The high idle speed at startup was obviously GM's El Cheapo solution to save the cost of producing a proper automatic choke system.

Now all of us here know about winter, and the hazards of driving around on icy, slick roads. What do you think is going to happen when a car has a stuck accellerator at 2,000 rpm? It ain't good, not one little bit. In fact to this day I wonder how the folks survived winters in Wisconsin! I do know Grandpa had to start up the car, open the garage door, and just let it run for 20 minutes until the idle slowed down. Gee... well at least gas WAS cheap then; and with the heater turned up to max the car was a toasty oven inside by the time it was safe for the folks to leave the house and head down the road.

No doubt Big Oil just LOVED cars like this.

So the first order of business when I took over the car was to fix GM's bad design and choice of this lousy carburetor and "automatic choke" system. Fortunately I know a real smart mechanic who'd fixed this problem before on GM vehicles. In later years GM finally switched to an electric choke device which could be installed in earlier carburetors IF you know exactly what little part to order, and "Foolish Carriage" has had this modification ever since. Problem solved. Now which suit at the top of General Motors was responsible for this defective model to go into production? We'll probably never know.

Persistent Problem #2 has been the lousy turn signal switch.

Made out of cheap plastic, it never lasted very long until one of the fingers would break off, then after that it wouldn't reset after a left turn until a new cheap plastic switch was purchased and installed. I wish I had a movie of this process to show you. The job requires about 2½ mechanics plus a small boy to supervise. It is EXCRUCIATINGLY DIFFICULT to replace this turn signal switch. Dealers had a special jig to assist, which made it a little easier but not much. Nowadays you can't find one of these jigs.

I've had the switch replaced several times, but now have just about capitulated and have to remember to reset the turn signal manually after each left turn.

In this I'm not inclined to blame the design engineers further down the corporate ladder. They probably started out with a very good switch which might have cost $50 to manufacture, but then a suit said "NO! You have to produce this switch for not more than $5.00, and that's final. Do it."

After all, the fat cat suits have to justify their multi-million $$$$ salaries, perks, massage therapies, $100 lunches, $200 haircuts, bonuses and platinum parachutes, and their luxury aircraft they fly around in and who knows what else.

Aggravating Problem #3 has been the cheezy driver's side door latch.

The latch might have been ok if it wasn't for this cheap plastic thing inside which went bad and then the latch jammed with the door shut. Has anyone ever tried to get a car door with a jammed latch open? It ain't easy. Fortunately my friends at the Billings machine shop have a very clever young welder who was able to cut the latch post off, then we could get the door open, remove the jammed latch, and I found a replacement post for 50¢ at the junk yard. No, the dealer didn't have any.

Inside the latch was the cheap plastic whatzis that had busted and caused the latch to jam. Funny thing is, I was able to knock the whole whatzis out with a screwdriver, and then without the whatzis the latch worked fine! So we put it back in.

However, I really want to buy a NEW door latch, but there aren't any!! The whole country has been scounged on the Internet. After much difficulty, I found a used one in a Joisey junkyard, and it's waiting in my spare parts stock.

Thus, whenever someone says GM doesn't really wants its cars to last very long, I believe it.

Problem #4 was the Clock.

American-made Car Clocks have always been notorious for not lasting very long, they are so cheaply made. A dollar pocket watch is better constructed than these things. Dad said the clock only lasted a few months.

Now, these Clocks were often installed/replaced by the dealers, who kept some in stock. But you can't get an original Clock for a 1964 Buick Special any more. I suspect that somewhere in the USA, perhaps even Michigan, there's a whole roomful of New Old Stock dozens of these clocks still in their original boxes.

Oh, well. The suits who run GM probably don't care about little me who'd like a replacement car clock.

I found a very nice little square "travel clock" at Walmart for about $3 and was able to improvise it into position in front of the old clock. Keeps perfect time, even has a light inside!

|===========================|


The above chronicle has been the worst of the annoyances. Several years ago I had the V6 engine rebuilt and it seems almost better than new. Amazingly, parts were no problem and the new valve seats are for unleaded gasoline. Should run fine many more years or until we have an electric retrofit available so the Buick's gas engine can be replaced with a DC electric motor (one moving part instead of hundreds.) On most days, like millions of people, I drive less than 20 miles. All we need is a good electric car which can be plugged in overnight to recharge, and no more Ga$$oline Expen$$e.

This past Spring I had the brakes replaced 100%: new drums, linings, master & wheel cylinders and all new brake lines. This ought to be good for a number of years yet.

Coming next is a full body and interior restoration.

One thing's for sure: I'm keeping "Foolish Carriage" running, but no way will I ever buy a new car anything from these General Motors turkeys, not even for Thanksgiving.

And, "Foolish Carriage" is so old that I don't have to buy license plates every year any more. It has a permanent registration.

I'm fond of telling young people and anyone else who will listen: "If you don't smoke and you don't drink, and if you drive a car that's 45 years old like I do, you'd be AMAZED at what you can afford to buy just out of the savings in petty cash!!!" And Pay Cash too! No 25% interest at those greedy banks.

So concludes my tale of how I'm still driving an American car, even though I know it's not supposed to be still running today.

I've just received another marvelous email fom Michael Moore, who has similar problems. He's such a terrific writer, don't want anyone to miss it, so pasting it in:

Saving the Big 3 for You and Me:
..... a message from Michael Moore

Wednesday, December 3rd, 2008

Friends,

I drive an American car. It's a Chrysler. That's not an endorsement. It's more like a cry for pity. And now for a decades-old story, retold ad infinitum by tens of millions of Americans, a third of whom have had to desert their country to simply find a damn way to get to work in something that won't break down:

My Chrysler is four years old. I bought it because of its smooth and comfortable ride. Daimler-Benz owned the company then and had the good grace to place the Chrysler chassis on a Mercedes axle and, man, was that a sweet ride!

When it would start.

More than a dozen times in these years, the car has simply died. Batteries have been replaced, but that wasn't the problem. My dad drives the same model. His car has died many times, too. Just won't start, for no reason at all.

A few weeks ago, I took my Chrysler in to the Chrysler dealer here in northern Michigan -- and the latest fixes cost me $1,400. The next day, the vehicle wouldn't start. When I got it going, the brake warning light came on. And on and on.

You might assume from this that I couldn't give a rat's ass about these miserably inept crapmobile makers down the road in Detroit city. But I do care. I care about the millions whose lives and livelihoods depend on these car companies. I care about the security and defense of this country because the world is running out of oil
-- and when it runs out, the calamity and collapse that will take place will make the current recession/depression look like a Tommy Tune musical.

And I care about what happens with the Big 3 because they are more responsible than almost anyone for the destruction of our fragile atmosphere and the daily melting of our polar ice caps.

Congress must save the industrial infrastructure that these companies control and the jobs they create. And it must save the world from the internal combustion engine. This great, vast manufacturing network can redeem itself by building mass transit and electric/hybrid cars, and the kind of transportation we need for the 21st century.

And Congress must do all this by NOT giving GM, Ford and Chrysler the $34 billion they are asking for in "loans" (a few days ago they only wanted $25 billion; that's how stupid they are -- they don't even know how much they really need to make this month's payroll. If you or I tried to get a loan from the bank this way, not only would we be thrown out on our ear, the bank would place us on some sort of credit rating blacklist.)

Two weeks ago, the CEOs of the Big 3 were tarred and feathered before a Congressional committee who sneered at them in a way far different than when the heads of the financial industry showed up two months earlier. At that time, the politicians tripped over each other in their swoon for Wall Street and its Ponzi schemers who had concocted Byzantine ways to bet other people's money on unregulated credit default swaps, known in the common vernacular as unicorns and fairies.

But the Detroit boys were from the Midwest, the Rust (yuk!) Belt, where they made real things that consumers needed and could touch and buy, and that continually recycled money into the economy (shocking!), produced unions that created the middle class, and fixed my teeth for free when I was ten.

For all of that, the auto heads had to sit there in November and be ridiculed about how they traveled to D.C. Yes, they flew on their corporate jets, just like the bankers and Wall Street thieves did in October. But, hey, THAT was OK! They're the Masters of the Universe! Nothing but the best chariots for Big Finance as they set about to loot our nation's treasury.

Of course, the auto magnates used be the Masters who ruled the world. They were the pulsating hub that all other industries -- steel, oil, cement contractors -- served. Fifty-five years ago, the president of GM sat on that same Capitol Hill and bluntly told Congress, what's good for General Motors is good for the country. Because, you see, in their minds, GM WAS the country.

What a long, sad fall from grace we witnessed on November 19th when the three blind mice had their knuckles slapped and then were sent back home to write an essay called, "Why You Should Give Me Billions of Dollars of Free Cash." They were also asked if they would work for a dollar a year. Take that! What a big, brave Congress they are! Requesting indentured servitude from (still) three of the most powerful men in the world. This from a spineless body that won't dare stand up to a disgraced president nor turn down a single funding request for a war that neither they nor the American public support. Amazing.

Let me just state the obvious: Every single dollar Congress gives these three companies will be flushed right down the toilet. There is nothing the management teams of the Big 3 are going to do to convince people to go out during a recession and buy their big, gas-guzzling, inferior products. Just forget it. And, as sure as I am that the Ford family-owned Detroit Lions are not going to the Super Bowl -- ever -- I can guarantee you, after they burn through this $34 billion, they'll be back for another $34 billion next summer.

So what to do? Members of Congress, here's what I propose:

1. Transporting Americans is and should be one of the most important functions our government must address. And because we are facing a massive economic, energy and environmental crisis, the new president and Congress must do what Franklin Roosevelt did when he was faced with a crisis (and ordered the auto industry to stop building cars and instead build tanks and planes): The Big 3 are, from this point forward, to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail (a corresponding public works project across the country will build the rail lines and tracks.) This will not only save jobs, but create millions of new ones.

2. You could buy ALL the common shares of stock in General Motors for less than $3 billion. Why should we give GM $18 billion or $25 billion or anything? Take the money and buy the company! (You're going to demand collateral anyway if you give them the "loan," and because we know they will default on that loan, you're going to own the company in the end as it is. So why wait? Just buy them out now.)

3. None of us want government officials running a car company, but there are some very smart transportation geniuses who could be hired to do this. We need a Marshall Plan to switch us off oil-dependent vehicles and get us into the 21st century.

This proposal is not radical or rocket science. It just takes one of the smartest people ever to run for the presidency to pull it off. What I'm proposing has worked before. The national rail system was in shambles in the '70s. The government took it over. A decade later it was turning a profit, so the government returned it to private/public hands, and got a couple billion dollars put back in the treasury.

This proposal will save our industrial infrastructure -- and millions of jobs. More importantly, it will create millions more. It literally could pull us out of this recession.

In contrast, yesterday General Motors presented its restructuring proposal to Congress. They promised, if Congress gave them $18 billion now, they would, in turn, eliminate around 20,000 jobs. You read that right. We give them billions so they can throw more Americans out of work. That's been their Big Idea for the last 30 years -- layoff thousands in order to protect profits. But no one ever stopped to ask this question: If you throw everyone out of work, who's going to have the money to go out and buy a car?

These idiots don't deserve a dime. Fire all of them, and take over the industry for the good of the workers, the country and the planet.

What's good for General Motors IS good for the country. Once the country is calling the shots.

Yours, Michael Moore.

------------------------|

-- Joe

Joe | Dec 07, 2008 | 10:47PM

You are missing the points about saving the big 3.

It ain't about saving any of the companies, it is about saving the worker jobs.

Nice piece, but useless.

Eric | Dec 07, 2008 | 11:39PM

Couple bad management with ridiculous union salaries and benefits, and what do you get? Companies that can't even sell the fuel efficient cars they produce (see Saturn). Oh, and who is the disgraced President? Jimmy Carter or Richard Nixon?

David1225 | Dec 07, 2008 | 11:59PM

Just finished reading those four columns from 1997. Wow, that third one about Apple throwing away the hardware biz and just becoming a software biz ... that was so far off the mark as to qualify as satire!

Dan | Dec 08, 2008 | 12:02AM

Lets not forget that the car companies have huge regulations to contend with, like fuel standards that are un realisitic, at a time when the economy has slowed due in part to government regulation that kept gas prices high, a year ago. Consider Apple having to contend with rules that said each iPod had to include a large solar powered panel to keep it charged, even though customers didn't want it. Nice article, but I have to contend that it is a bit more complex than giving your business over to the competition, and see if they will contract to build a better car. The big 3 need to trim the models, and concentrate on the 5 that sell, and load them up with all options, safety and extras.

Will Wagner | Dec 08, 2008 | 1:03AM

Gosh, I'm going to miss you...

Thanks for another great read.

Dave | Dec 08, 2008 | 1:04AM

Your article cleanly punches a hole twixt the folks wanting to miraculously save overpaid, non-competitive jobs, and those who realize the jobs will be gone soon, anyway. The difference is that the companies can survive and even thrive. The real choice is lose the jobs and the companies, or just lose the jobs.

Jack Campbell | Dec 08, 2008 | 1:15AM

Interesting article, and lots of interesting comments!

Any plans to get the government as visibly involved in car-building as the big-3 will fail. The government is at least as inept as these corporations have shown themselves to be. The biggest problem with discussions about what to do is that so much of what has gone on is hidden from view. Decades from now, such information will be found (probably after certain influencers are dead), and published, only to be disbelieved by the large majority who cannot believe the fairy-tale was a sham.

Jerry | Dec 08, 2008 | 1:19AM

Put them into bankruptcy, break the union contracts, and then bring in Steve Jobs. He'll push for whizzy new cars, the stock in the new company will shoot up, and he can reward all the UAW workers with backdated stock options. No one knows more about backdating than Steve, the only CEO of TWO companies that backdated, and thanks to Dianne Feinstein, he has no fear of prosecution.

SolvesTheProblem | Dec 08, 2008 | 1:44AM

In the short time I've been reading your column, this was by far the most amazing one. Will anyone make the right and very bold move? I doubt it. Instead, they'll get and waste tax dollars just like the banks did.

Sad, really.

(I do hope you'll tell us where you're going next and/or where we'll be able to continue reading your thoughts after you're done with PBC.)

James | Dec 08, 2008 | 1:48AM

I think the idea of Ford, GM and Chrysler becoming like Apple is a brilliant concept. All R&D and design could be done in the US or anywhere, and the manufacturing in China, India or Vietnam. Quality control can still be in place. But...

...the problem is JOBS! The US has to protect it's domestic market and also keep people employed! Unemployment leads to lower tax revenue, social problems and an increase in crimes.

Besides, GM, Ford, and especially Chrysler, are rotten to the core. Already decaying. Why not let them die a natural death and start new, sound companies? How about Apple Motors or Google Automotive?

Like Apple back in 1997, the only real assets GM and Ford (I refuse to include Chrysler) have left are their brands and distribution channels. The rest should be thrown overboard before they sink.

It amazes me how bozos in smart suits and with MBAs can get to run big-name companies like that.

Customer-oriented technology companies should be run by visionaries. People like Steve Jobs, Sergey Brin, Larry Page, or indeed Clive Sinclair or Richard Branson.

Staffan | Dec 08, 2008 | 1:57AM

Yep, you could even give options for the "Cringely fix":
* $10 priority email
* $5 low priority (a day or two later)
* $0 free online subscription with "lots" of ads (and a week or two later)

billrobo | Dec 08, 2008 | 2:42AM

While I like the ideas, there's a whiff of naïveté in the air.
Do we know that retooling a factory from producing Jeeps to Volts is on par with converting a factory from Thinkpads to MacBooks?
And going with contract manufacturers automatically ships all those jobs overseas. I'm all for progress, but how do we practically deal with masses of unemployed factory workers at this scale?
And there must be a reason that car companies pre-announce their products. Perhaps it's just not practical to keep a secret in the auto world like it is at Apple or Google. Or maybe Joe Consumer needs a couple of years notice to start thinking about the 2nd biggest purchase of his life versus buying a laptop.
I'd like to hear from an auto industry insider to see if experience can offer some insight.

Vince | Dec 08, 2008 | 2:49AM

Although Jobs (well Apple) has been doing brilliant as of lately they will get into trouble within the next two years. And the reason is exactly what you state as their strength. The tie-in of everything.
Microsoft got a couple of billion dollars in fines for putting media player in Windows. And other examples are there too. It will be a matter of time before apple gets it

Charlie Mason | Dec 08, 2008 | 2:57AM

All you ignorant people who are trashing the auto execs are just wrong. Ford is quite profitable everywhere outside the U.S., and so is GM.

Why is that?

Both Ford and GM could easily make a profit here, too, if only Congress would allow them to import their own small, highly fuel-efficient foreign-made models, which are top sellers around the world, and shut down their domestic passenger-car factories. Then they would produce only trucks, vans and SUVs here - which are also domestically profitable.

So, blame the car companies and their execs all you want but remember this truth: Politics is the enemy of economics.

And the car companies have been fighting the unholy political alliance of the unions and the bureaucrats for decades.

The unions and the bureaucrats are destroying the goose that lays their golden eggs, and they are too stupid, cowardly, or venal to admit it.


Great column Bob - you always have interesting ideas and insights, even if the details need rounding off.


If there's anybody in the world who could conquer the unions and the government, and radically re-energize the auto industry in this country, Steve Jobs would be the guy.


After all, who else could have told global giant ATT what to do and where to put it, and made them swallow it - without holding either a gun or a government regulation to their head? Nobody I can think of.

Fred | Dec 08, 2008 | 3:00AM

Fred, above, makes a good point.

A swift kick in the groins for Ford and GM's US operations might be enough.

Sort the product and squash the unions a little and they may be alright.

martin@talkingfuture | Dec 08, 2008 | 3:10AM

I'm surprised that I haven't seen Dean Kamen mentioned. While the Segway was why off the mark, Kamen has a proven ability with things electronic and mechanical. Someone needs to tell him we need a multi-passenger vehicle to use on our existing roadway system. wages are the only thing that trickles down. Entire local economies probably are built on those union wages/pensions.

Doug | Dec 08, 2008 | 3:57AM

Close all the factories and sack all the workers?
Ford had the opposite approach: pay the workers enough so that they could actually afford to buy the cars they were building: thereby boosting the economy as a whole, including car sales.

Martin | Dec 08, 2008 | 5:13AM

I hope the great Dan Lyons is also reading the column. An imagined world of Steve-o running GM would make a terrific follow up to Option$...

The ideas are really good, Bob, but I think America needs a a few more like Steve. Jobs can't change the industry on his own.

Final thought: Throwing tech at the problem is the way to go. The engine might be a problem for a while (but making the car lighter, and the internal combustion engine more efficient might shave off 25% consumption) - so why not make the driving experience better?

I'm sure some sort of smarter car on a smart highway could make the limited fixed resource of roads more efficient. Couple that with road pricing (or tolls) and you might be able to change the game. Then you can get car owners willing to switch. Save 30 minutes on commuting? Maybe a car that really does drive itself? On a special iWay? ;-)

I guess that's too futuristic. Better design will have to do in the meantime.

adam d | Dec 08, 2008 | 5:32AM

With computers, you have multiple corporations building separate parts (motherboards, memory, graphics cards, etc.). This works because there are standard form factors--my company's DIMM will fit into every computer's DIMM slot because this standard is enforced.

Automobiles don't have standard form factors. A Ford gear train will only fit in a Ford. This means each auto component can only be built by one company. If that company's workers are unionized, there's nowhere else to go--them's the breaks. Entrepreneurs can't sell a cheaper, faster gear train because Ford has absolute control.

The gov't should attach a requirement to the Detroit bailout money demanding standardized form factors for auto parts. This way, the industry opens up to competition and innovation, and we the customers aren't constantly dependent on three over-privileged companies.

When you become America's Tech Czar, Bob, please make this a priority. In the meantime, you need to pick a successor--pass the name Bob Cringely to a new scribe in the same way that Dread Pirate Roberts gets passed on to new pirates. Hold a contest or something! You can't let all your contacts and experience just evaporate.

Matt Scarpino | Dec 08, 2008 | 5:43AM

Not sure I buy the outsourcing idea, although it is interesting. Seems like just too complex of a part with too many significant safety issues to be be currently set for outsourcing. This idea works with the military to a degree, but they are outsourcing the entire project and it's a very expensive model.

What I keep trying to figure out is some way for a company like Tesla to buy out Chrysler and have a completely new type of CEO (non-detroit, non-finance) run the company. It gives Tesla manufacturing capability immediately and a name to use for marketing if they chose to.

Big issue is they still have the union baggage as some other people mentioned above. That is always going to be a problem for these companies as they signed deals they just shouldn't have.

Going to be very, very interesting over the next months and years.

Kent Smith | Dec 08, 2008 | 6:47AM

There are already examples of outsourced plants.

One such is in Finland. As far as I know unlike some of the other outsourced plants it has nothing (like design capacity) other than the car-making plant.

For a long time this plant made normal Saabs (and according to something I just read, Swedes tried to get hold of Finnish-made Saabs because the quality was better,[sounds far-fetched to me]).

Then they started making the more exclusive cabriolet Saabs and Porsche Boxers. I have a feeling today they are (were?) making the Porsche SUV.

(A quick look at Wikipedia for the Parent company Valmet produced this list "Historically Valmet Automotive has produced cars for Saab Automobile, Talbot, Renault, Lada, Opel and Porsche")

I suppose it's typical that this kind of model (making cars for other companies) has led to a lot of fluctuation in the workforce. Showing that someone would have to pay for making Detroit lean and mean.

Mike Walsh | Dec 08, 2008 | 7:53AM

The rub, for all this so-called green tech to fuel cars-of-the-future, is: where is the power coming from? For electric and hydrogen, there needs to be a national program of massive new electrical generation plats built to supply the power needed to make the electricity to ppwer the cars or make the hydrogen. Next, someone needs to convince the Greens that power transmission lines are a good thing.

So Steve, looking at this mess, would either a) wisely stay away, or b) find a small car company to run and produce three of four cars which make a handsome profit.

In any case, the big three are mostly toast, so black and crispy, that nothing short of chapter 11 will solve. IMHO.

PIF | Dec 08, 2008 | 8:09AM
Edward Jones | Dec 08, 2008 | 8:29AM

Chrysler already tried their hand at outsourcing, see the Crossfire, produced by Karmann. Maybe the deal was wrong, but I read that Chrysler lost their shirts on those cars.

Now, in that case, they also outsourced the design (which Chrysler is pretty good at) and kept with the marketing (something it is not very good at).

Outsourcing needs to be applied carefully with tight controls to ensure quality of product and protection from espionage. It's certainly not a silver bullet.

Joseph Tate | Dec 08, 2008 | 9:29AM

One problem with manufacturing cars like consumer electronics is that if some plant builds 20,000 iPods with a defective part, it's no big deal. Even recalling them after they've been sold is no big deal. The company maybe loses a few thousand dollars. If a plant builds 20,000 automobiles that all turn out to be lemons or need a recall, that's a much bigger problem and a lot bigger write off.

thefool | Dec 08, 2008 | 9:29AM

I would agree with PIF and I think any fixes will only provide temp relief for American car companies. Our whole economy is a testimony to bad leadership in companies and in government. It is hard for a culture that only respects greed to put together anything that functions well over time. I think Richard Stivers' Culture of Cynicism would best describe the real problems we have.

Roger | Dec 08, 2008 | 9:30AM

I would agree with PIF and I think any fixes will only provide temp relief for American car companies. Our whole economy is a testimony to bad leadership in companies and in government. It is hard for a culture that only respects greed to put together anything that functions well over time. I think Richard Stivers' Culture of Cynicism would best describe the real problems we have.

Roger | Dec 08, 2008 | 9:31AM

I would agree with PIF and I think any fixes will only provide temp relief for American car companies. Our whole economy is a testimony to bad leadership in companies and in government. It is hard for a culture that only respects greed to put together anything that functions well over time. I think Richard Stivers' Culture of Cynicism would best describe the real problems we have.

Roger | Dec 08, 2008 | 9:32AM

So the "Jobs" plan would result in the vast majority of the 3 big car manufacturers being "right-sized" (an obnoxious way of saying they'd be made redundant - who ever "right-sized" a company to be bigger?). And for this, hundreds or billions of tax dollars would have to be paid (i.e. wasted) so as to prevent imminent collapse (i.e. mass redundancies) and give a Jobs time to be effective, i.e. time to make mass redundancies so he had a manageable sized organisation. And the current alternative is, the same people get made redundant, plus the rest (just a few more, including the executives and senior managers that got it all so wrong for oh so long) and no billions of dollars need to be spent.

Sounds like a no-brainer to me: bye bye the big 3!!! And if Jobs (or an equal) really was interested in building cars, it would be simpler, quicker and cheaper to hire the best of those made redundant and start from scratch - there'd be some great tooling and premises going cheap!

Paul | Dec 08, 2008 | 9:54AM

While, I agree that it was the car companies own inaction and antiquated thinking which got them into this mess. I also have to place the blame on the American consumer who, up until recently, thought bigger and better was just that: better.

When RXC mentioned the plan about the car company selling a technology-rich, beautifully designed, efficient and safe car, I immediately thought "That would sell faster than they could make 'em" (which, actually, is also very Apple). We need a car company to offer something that is clearly better and more attractive than the rest, and people would buy it.

I thought that Tesla Motors was going to be that company, but I guess that the economy, falling gas prices, and probably their own lack of movement has kept them as a niche option.

Pete | Dec 08, 2008 | 10:02AM

This all supposes that the North American engineered vehicles are actually reliable, which at this point they are not.

Badger | Dec 08, 2008 | 10:11AM

farfegnugen = fahrvergnügen

What translating you use?

John | Dec 08, 2008 | 10:13AM

Did you mean 'Fahrvergnügen'?

This is the German word for 'driving pleasure' or 'fun of driving'.

Charles Judd | Dec 08, 2008 | 10:17AM

Did you mean 'Fahrvergnügen'?

This is the German word for 'driving pleasure' or 'fun of driving'.

Charles Judd | Dec 08, 2008 | 10:19AM

By 'farfegnugen' I take it you mean 'Fahrvergnügen', the German wword for 'driving pleasure'.

Charles Judd | Dec 08, 2008 | 10:25AM

Well, I wouldn't put Steve Jobs at a car manufacturer - namely because he doesn't understand that market like he does the computer market, and that makes a big difference.

That said, I think you touched on a key here that could easily work to save any or all of the "Big Three" - outsourcing. Why?

Well, their big collective problem is the UAW, which makes it really expensive for them to make vehicles. All other costs aside that is their one problem. (Everything else can probably be considered at market to start with.)

So I would make one change to your solution: The Big Three should sell their plants to the UAW, and outsource building to UAW. Give them a 2 year exclusive contract to get things under control, and then open it up. Make the UAW see what it means to compete by making them compete. Right now the UAW has a pretty good strangle hold over the Big Three that makes is very hard for the Big Three to compete.

That's not to say there aren't other issues - there are, and brand competition is certainly one of them. But instead of killing off all the brands, they could make the brands more specialized and less overlapping - it doesn't really cost them that much to make all the brands, but it does cost a lot in market share when the brands have to compete with each other, though the accountants probably just add them together internally, so the CEO's at the top probably don't see such a big difference.

Needless to say, the outsourcing of the manufacturing could be the biggest thing to save them since it would remove any dependence on the UAW. They would also be able to change from having a janitor with UAW to another firm (for the buildings they have left) if they so desired, and further reduce costs.

I'm not usually one for outsourcing; but the scenarios the Big Three are in - it just makes sense as it gets rid of their collective UAW problem. It's high time the UAW was taught a lesson in competitive markets, and that looks like the best way.

TemporalBeing | Dec 08, 2008 | 10:27AM

The Chevy Volt is typical of the resistance to change that has overcome the thinking of GM executives these days. There was a time (1955) when they were thinking out of the box, when they designed the Corvette. The Corvette became the ultimate concept car. A harbinger of forward thinking technology and design. It also drove sales, polarizing car buyers who even if they didn't drive a Corvette, would want the next best thing - the engine or disk brakes derived from the Corvette in their family sedan or truck.

Its so obvious to me what should happen. There should be NO Chevy Volt. There should be an ELECTRIC Corvette. Plain and simple. A lightning-breathing monster of a Corvette, able to lay down 60 feet of burning rubber on your neighborhood's street. Something so insanely powerful that everybody who saw one would want what it has - that electric drive train in their car.

Nope, the GM people have it all wrong. Instead of putting forth the least amount of effort in their electric car offering it should be the best, the hallmark of what driving any car is all about.

ElectricCorvette | Dec 08, 2008 | 11:09AM

One of Detroit's big problems is the investment community, who have historically seen research and development as a waste of profits, thank you Milton Friedman. The list of developments that the big 3 had a hand in, then walked away because of the expense is extensive, but the best single example of might have been was the Cosworth Vega of 1974, with electronic fuel injection, twin cams and a modern 4-valve combustion chamber (Yes, Honda had those lovely 4-valve race bikes, but they had them to allow high RPMs more than for efficient combustion.). MBAs have been more costly to the big 3 than the UAW.

Tim Harness | Dec 08, 2008 | 11:20AM

A very interesting read. Ironic that Germany and Japan have socialized medicine and are able to beat the US car industry.
Perhaps these comments should be sent to congress and the current CEO's

John Hails | Dec 08, 2008 | 12:16PM

Don't send this to the CEOs. Fire them. Send it to Congress.

Dale Garrison | Dec 08, 2008 | 12:35PM

Dumb.

Boeing tried this with the 787 - give up nearly all the manufacturing to outside companies. They're about to announce the FIFTH delay of the program since its inception. The first plane wont fly until middle of 2009 (supposed to be mid 2007), and wont EIS until summer 2010. If there aren't any more delays. Granted an airplane is more complex than a car, I don't think the big 3 could handle it.

Anthony | Dec 08, 2008 | 1:43PM

You got to admit that is some pretty cool stuff.

jess
www.online-privacy.se.tc

Johnny Five | Dec 08, 2008 | 1:52PM

Germany and Japan also have socialized auto industries

asdf | Dec 08, 2008 | 1:58PM

It takes a vast amount of stupidity to allow your design firm to allocate a product for manufacturing and assembly to a co-operative manufacturing facility/contractor that could inevitably manufacture your competition. Oh Yea! That makes sense.

Mike | Dec 08, 2008 | 2:09PM

Probably the biggest problem is that, in discontinuing a model, you still have to provide at least SEVEN YEARS of parts to service warranties and repairs. Remember when they were trying to get rid of Oldsmobile?

It's also one thing to retool a light manufacturing factory to make a new computer or give a computer parts supplier new specs. It's another thing to retool a heavy manufacturing factory to make a completely different model of car.

GM also has some 50 models and many plants. GM also has to deal with unions and suppliers.

This is MUCH more complex. If I were Jobs I wouldn't take the job.

Paul | Dec 08, 2008 | 2:09PM

Why would this be "insanely great"? All we'd wind up with would be over-priced, over-marketed automobiles that would look great, but ultimately have fewer features and less maintainability than current cars (plus they'd have to be designed in the U.S., but made in China). The only people that would really want them would be overpaid, hipster primadonnas who don't need daddy to buy them another new car - they need to learn to ride a bike, which is all they could afford with their real job.

Plus, I liked it the first time when it was called "Audi".

theArk0s | Dec 08, 2008 | 2:13PM

Apple manufacturers all its kick ass products overseas... Not sure that's the solution Detroit is looking for.

Cory MacDonald | Dec 08, 2008 | 2:15PM

Great article, it will be very interesting to see how this all plays out.

One factor which doesn't appear to have been commented on yet is that the US Government, not just Obama but Senate and Congress on both sides of the aisle, are concerned what bankruptcy of any/all of the Big-3 automakers will have on the Pension Benefit Guaranty Corporation (PBGC). If you're not familiar with it, the PBGC basically insures the pension plans of American workers. If any of the Big-3 declare bankruptcy you can bet one of the first things they'll do is dump their pension plans (see the United Airlines bankruptcy for reference), a move which could potentially cost the government more than the cost of the loans.

What I expect to see later today and over the next few months is that the government will try to give the Big-3 just enough money to keep them solvent, while trying to pressure both the companies and the unions to restructure.

Bob | Dec 08, 2008 | 2:18PM

I agree with Bob's electroshock therapy prescription, but as per his prior column, the Federal government will intervene to keep the mediocre mediocre and delay the needed medecine until this patient is good as dead. Then we'll have another nationalized industry akin to Amtrak.


How about bankruptcy? Whatever happened to the free market? Was this all a mirage?


I guess so.


Bitter from a distance...


John R.

John R. | Dec 08, 2008 | 2:19PM

How on earth do you propose to know what "Steve" would do? My money is on you've never even met the guy. Get a life. Apple makes high end/high-priced luxury items. If you think firing all employees and producing only luxury cars will save the market, I can't just regard this drivel as ignorant, but also cruel.

RMFE | Dec 08, 2008 | 2:24PM

How on earth do you propose to know what "Steve" would do? My money is on you've never even met the guy. Get a life. Apple makes high end/high-priced luxury items. If you think firing all employees and producing only luxury cars will save the market, I can't just regard this drivel as ignorant, but also cruel.

RMFE | Dec 08, 2008 | 2:25PM

Brilliant as usual, Bob. Try this on: sell the factories to the UAW, and they can be an outsource vendor. They already have a massive labor force, and will compete as a free-market company. Then they can build cars for ANYONE, not just the Big 3.

bky | Dec 08, 2008 | 2:26PM

This is the most idiotic article I've read in a long time. Yes, what the auto industry needs more of is badge engineering (look it up).

guy gordon | Dec 08, 2008 | 2:27PM

I agree that Steve should run them but it would eliminate to many jobs in the US.

I don't think they should get a bail out to "Re-tool". That whole retooling bit was a lie to sell us on this bailout now their getting $15B so they don't have to file for Bankruptcy within the next couple WEEKS. How can it take them this long to figure out that they are in trouble. I say they had plenty of time to fix it before it got this bad. It was their own fault.

1. I say let them fail give the bailout to TESLA so they can build (or buy) plants to build affordable electric cars. Unlike the failing 3 they already have the technology and do not need half+ the bailout to keep them from going broke. This would maintain many of the jobs lost in the auto industry because tesla will need to hire trained workers to build the cars.

2. Diesel Cars can run on algae oil and we have plenty of desert to grow it in. This would cover many of the jobs needed to slow this collapse and give the failing 3 a chance to keep their diesel lines going after they go through bankruptcy. This would also keep a lot of money from flowing into hostile countries since it will scale back our oil imports.

If the big 3 fail it does not mean that the economy collapses that is all just hype. Write your Representatives and SAY NO to any bailout.

rtin | Dec 08, 2008 | 2:29PM

Nice summary. Below you can find some innovative way to introduce a new concept of operating a car:

http://www.betterplace.com/

mirko

Mirko | Dec 08, 2008 | 2:31PM

Most of these ideas make sense except that the autos have far more restrictions than tech. They can't just close brands because their dealers would sue them. They can't contract out all labor because the UAW would launch a strike and shut down the company immediately. Even the ideas like the Volt are problematic when you consider the scale. It's one thing to make a few electric cars but millions is another problem. There's a tendency for people to assume the tech industry is more advanced and complicated than autos but this is wrong. For instance, the issue of batteries would be much more serious in autos than laptops. Possibly, it would cause battery prices to shoot up and actually harm Apple. Only the government could pull it off and it would likely turn out to be even more wasteful then the current system. Lutz is similar to Jobs in many ways and he has improved the lineup at GM but their problems now are financial. The only way Jobs could save GM would be to merge it with Apple so as to pump it up financially. Of course, that would hurt Apple stock. Silicon Valley has never had to deal with financial problems like GM because any tech company either survives or it doesn't. They don't drag out like this.

Frank p | Dec 08, 2008 | 2:36PM

Urgh. Why must we have that "What Would Jobs Do?" frosting on what is otherwise a pretty sound and well reasoned article.

Gryphon | Dec 08, 2008 | 2:39PM

Mirko hit it on the head - how can you write such a long article on the Big 3 and not even mention the UAW? It's just another example of how most of America is way out of touch with the realities that American auto manufacturers face. Search on YouTube for "Ford plan in Brazil" and you will see the most advanced assembly plant in the world - integrating suppliers feeding their parts directly into the main assembly line, which mostly automated and can produce 5 difference vehicles on the same line. They can't build the same type of plant here because the UAW contracts prevent it.

It's not that the Big 3 can't compete - they just need to get out from under the UAW contract (and I admit they are at fault for signing those contracts).

chris | Dec 08, 2008 | 2:51PM

What would happen if Steve jobs ran a car company?

1. You'd only be able to use that car company's tires.
2. You could only buy the car at their own dealership stores
3. There would be no negotiating, and no customizing of the car
4. It would be a beautiful car
5. the first edition of each model would only be able to drive 50 mph and would cost 50% more than the next car that could drive 100 mph
6. You could only use the car on roads that they OK'd in their GPS program

unknown man | Dec 08, 2008 | 2:52PM

Oh good... so if my fuel injectors go out, I get to replace the entire car?

steve | Dec 08, 2008 | 2:54PM

what would happen if Steve Jobs owned one of the big three? they're be cars out there that wouldn't work or highly incapable, however would nonetheless look mighty savvy

danny | Dec 08, 2008 | 2:56PM

Frank p,

Who cares if UAW strikes when the company is outsourcing manufacturing? (That is, they're eliminating the manufacturing labour force all together.)

While UAW is busy pissing and moaning, someone else will step in and give the car company the kind of deal that UAW has nightmares about.

Getting rid of the labour unions is probably the best thing the big 3 could do.

jm | Dec 08, 2008 | 2:58PM

@Gryphon

The whole point of the article is that the big three look like apple from 10 years ago and Jobs turned apple around. The POINT of the article is 'what if someone did the exact same thing at one of the big three'.

If you think the ideas in this article were good then you like what Steve Jobs did.

Nick Giudici | Dec 08, 2008 | 2:58PM

"Acceleration and braking would be handled with a single pedal.

It would drive slower in Redmond than it would in Cupertino.

You'd have a choice of: brushed aluminum.

Steering would be done via touchscreen.

You could only use Apple brand gasoline from Apple brand gas stations."

quoted from digg user megaton

L | Dec 08, 2008 | 3:13PM

My first thought upon reading this was that it was unrealistic and stupid, but as I thought about it a bit more, I looked at it from a different angle. Much of what was said was obvious (better design, better efficiency, better safety are already in progress, Chrysler notwithstanding), and some was ridiculous (comparing the outsourcing of a computer to outsourcing an entire car...), but a different perspective that would at least consider radical changes might be good. I think Mullaly has done a decent job of that and that's why Ford is in a better place than the other two. Of course, Cerberus is a good example of what can happen when an entity that doesn't know what it's doing gets in over it's head.

Scott | Dec 08, 2008 | 3:20PM

The biggest problem with this article is that Steve Jobs was actually bailed out by billionaire Bill Gates. Gates funded him long enough to save the company from dying. The second biggest issue is Jobs complete lack of Human Factors Engineering. I do agree that everything under the hood would be innovative, but when it comes to design he prefers form of function. While this kind of thinking can results in something as simple as carpal tunnel for computer users, car manufacturers must put function in design (in terms of use) before form. Breaking to far away from this idea results in expense with human life, not angry callers. Efficiency and reliability don't mean much without taking into account the psychological aspects involved with car safety.

Merr | Dec 08, 2008 | 3:22PM

I just wanted to say that I really enjoyed reading this article, and it bothers me deeply that we have these huge American corporations without a true leader at the helm.

Steve's ideals and principals probably would not translate to the automotive world, but let's get a creative leader willing to take risk.

Alex Erickson | Dec 08, 2008 | 3:46PM

This is the worst article in the world.

Insanely bad idea, not good.

Gdogg | Dec 08, 2008 | 3:49PM

Steve Jobs is overrated. He stole Apple from the true genius, Wozniak!

Apple Sucks | Dec 08, 2008 | 4:01PM

Merr: Your knowledge of Apple history is somewhat limited. Mr. Gates purchased $100M in Apple stock at the time, certainly not a lot in the grand scheme of things. It was more of a PR move intended to demonstrate that Microsoft still considered the Mac a viable platform. In no way did Gates or Microsoft "bail Apple out".

LJ | Dec 08, 2008 | 4:02PM

Funny that I should run across this today. I was looking at it from a different personality angle -- Jack Welch. He famously got GE out of every business in which it wasn't number 1 or number 2. And I think I read that he had to be talked into keeping the divisions that were only number 2 in their markets.

Normally I have no time for the guy, because in the military you just can't get rid of under-performers and call it leadership. That's the opposite of leadership when you do it to people.

But it is what the car companies need to do to product lines. GM could tell Chevy "you get three cars and two trucks, all dependable daily drivers. That's it." Then Pontiac: "you get three cars and a crossover, and they'd damn well better be exciting." Same for Caddy, Buick, GMC, etc.

I think they just need to catch their perception of their organization up to where their manufacturing is. GM has been one company for years in that way, sharing platforms, etc. But they want to be unified at that level and diverse at the brand level. Time to kill your darlings, as Twain said.

1369ic | Dec 08, 2008 | 4:02PM

The current talk of saving the American auto industry isn't primarily concerned with saving shareholders & the company name - it's about maintaining American industrial capacity & manufacturing jobs (along with a little nationalistic pride). A Chrysler that was simply a design + marketing shop, regardless of how successful it may be, would not be an American automobile manufacturer, it would simply be another public company that made money.

In the event of a major, world-wide economic colapse and/or a major military conflict (a'la WW2) a company that designs & markets consumer goods has no value. An established, functional domestic manufacturing base, OTOH, would provide us the resources to pull through it. This is what the last 30-40 years of using Wall Street as an indicator of company strength & success has pulled us away from.

Juan Juarez | Dec 08, 2008 | 4:14PM

The cars would be sexy expensive and work ONLY on Apple roads... (on a network Mac's don't play well with others)

Ersatz | Dec 08, 2008 | 4:18PM

Merr,

Bill Gates did not bail out Steve Jobs. Microsoft made a $150 million investment in Apple. This was part of a deal to settle patent infringement cases against Microsoft. Apple got the money, Microsoft got the cases dropped. Additionally, as part of the deal Explorer became the default browser for MacOS, and Microsoft agreed to produce new versions of Office for the Mac.

While anyone or any company would welcome a $150 million shot in the arm, it did not "save" Apple. The same year that Apple received this investment, Apple did about $7 billion in revenue, so that $150 million had about a 2% impact on the bottom line.

Ken | Dec 08, 2008 | 4:35PM

Cars would only seat one, and starbucks parking lots would be FULL.

Also every car would come with a free scarf.

carson | Dec 08, 2008 | 4:50PM

@jm - "Who cares if UAW strikes when the company is outsourcing manufacturing? (That is, they're eliminating the manufacturing labour force all together.)"

Well, anyone crossing that picket line would. UAW is like Teamsters. Mean and nasty when it comes to crossing a picket line, and not above threatening to kill people either. So anyone would very much think twice about doing so. However, the solution there - sell the factories to UAW and give them a limited exclusive contract for productions so they can figure things out and get things setup to run - making it very obvious that it is a LIMITED contract and that afterwards they would be able to go to anyone. UAW would have to fix their side of the problem, or risk going out of business. It would work very well.

As to having to keep manufacturing parts 7 years beyond a line, that would easily be resolved through the outsourcing. Just buy enough parts for that time frame, etc. It would also make it easier and cheaper to re-use parts between models.

So there is a lot to benefit.

The only downside is losing control of your own production. However, that could be rebounded a little down the road when they don't have such an issue. Right now, the key is to get out from under the UAW, and it would be worth it to do whatever it takes to do so. (UAW doesn't want them to go to bankruptcy because that would give the courts the ability to throw out and renegotiate the bad contracts.)

So at this point, it's really a lose-nothing-gain-everything solution for the Big Three. After that LIMITED time contract, they could build new robotic factories, or find another source that would do so to lower the costs - perhaps even force the UAW to do so.

But right now, they need to force the UAW's hand, and this is about the only way to do it in a way that would bring about a meaningful result.

TemporalBeing | Dec 08, 2008 | 4:56PM

I love how these people all figure Steve Jobs to be the savior and put out how he would act. First there are the labor contracts - Apple probably does not have deal with those to manufacture stuff - off shoring?. Then there are regulatory/safety issues - Apple is screwing those up in Europe over disposing of their products and batteries. Advertising - the cars had better do as they advertised - again ask the Bristish about how true the iPhone ads are. Plus they are in a situation where they control parts, repair, etc. Can you image how people will feel if they can only take their car to the iCar store and have to wait until iCar sends it back, ala an iPhone? No bacyard mechanics - unless they buy the special iCar tools. And as the above writer mentioned, probably iRoads and iFuel. We would not even be talking about Steve Jobs if the iPod had not taken off. The main reason the car companies are in serious trouble is that there is no credit and oil prices shot up to record levels. Then to keep shareholder value, companies laid off people. They could not buy the vehicles they seemed to want and what Detroit built - vans, SUVs, trucks. NOT cars. If you's take a second to look on the road, you'd see this. The American people only went back to cars recently because gas was $4.11 and diesel was even higher. Now that is it dropped, the patterns will return when the economy recovers.

stevejg | Dec 08, 2008 | 4:57PM

You're on the right track with reducing complexity and creating focus for the companies. That's the general rule for repairing companies that are adrift in turmoil.

Although Jobs isn't the one to save the automotive market - that would fail. The mess the Big Three are in is due to the credit markets, and they are not alone - Toyota and Honda are in jams with sales down 30-40% too. People are just not buying cars.

Jobs doesn't have to get consumers loan/lease financing so they can purchase a new laptop and pay over three or four years.

The Big Three don't have a well of corporate financing they can go to for working capital to tide them over (Ford got the equivalent of an Equity Line of Credit last year while there still were loans and so they 'appear' to be in better shape than GM & Chrysler. Now no one can go to the finance markets because the banks are in such bad shape they needed $700 Billion to make them viable, not the itty-bitty $15 Billion they are making the autos grovel for).

Up until the credit crunch, the view from inside the automotive industry, is that GM has the best products of the three (still too many brands), but the best shape from the product aspect. A lot of that has to do with Wagoner bringing in Lutz - which was as bold a move as Jobs has ever made. Lutz was instrumental in delivering the renaissance at Chrysler during the 1990s, and had his executive business product start at BMW.

An interesting thing to note... in 1980 when Chrysler got it's loan, it had 250,000 employees it 'was trying to save'. Today the Big Three have about that many workers - all three combined!


J S | Dec 08, 2008 | 5:14PM

Well Sure the cars would look awesome, but they would only be compatible with like 10% of roads...

ig88b1 | Dec 08, 2008 | 5:18PM

$200,000 Saturns?

billybubba | Dec 08, 2008 | 5:19PM

So when you got the car wet, it would stop working and void the warranty?

BillyGates | Dec 08, 2008 | 5:30PM

I like the idea of fresh thought, but it would also involve a real culture change, especially in the US where the various lobbies and interest groups would throw fits. You now have a president-elect getting involved in auto design by telling the manufacturers what they need to do in design terms (not financial) in order to get their bailouts. Everyone seems to have an important opinion here.
Part of the problem is that North American manufacturers would rather spend $10 to save $11 in manufacturing costs. Sure we all love that great plastic dash, but does it need to look so cheap?
Instead of making such huge investments in saving money, make those investments in product quality.
Will people pay? Yes. Look at all the BMW's, Volvo's, Mercedes and other manufacturers who make a quality product and are able to sell it at a higher price.
And until you actually use these higher quality products, you don't realize that while they all get you from point A to point B, there's a difference in how "safe" you feel or how "efficient" you do it.
I have been an Apple user for over 20 years. I have never bought a PC for myself. Wouldn't think of doing it. Why? Because I know that even though I could probably buy a computer that costs less to do the things I need, I won't have to deal with the problems. My user experience is much better and I will gladly pay for it.
My Mac, my Volvo. Both are a bit more expensive, but I think they are worth it enough to pay for that privilege.
And how about that? Can you imagine really wanting a Chev? Not at this point.

STan | Dec 08, 2008 | 5:45PM

Stick to reporting on computers. You know very little about manufacturing and even less about the auto industry. Outsourcing manufacturing? And what about the unions? Do you think they'll just shrug that off? It's one thing to outsource the manufacturing of computers, quite another to attempt to outsource the manufacture automobiles.

Who in their right mind would by an auto plant, the potential environmental liability aside, the unions would have to be broken and since the union own the Democrats no one is going to allow that to happen (for now). And the capital required to tool up an auto plant is crazy big. Without the promise of a minimum number of cars to produce, no one in their right mind would touch that deal.

The best thing for Chrysler is to go out of business. GM needs to file for Chapter 11 bankruptcy reorganization (allowing to legally break union contracts) sell off a couple of their niche product lines (there are a certain number of buyers for Hummer regardless of the gas price – they just have to be produced as they are ordered - its called Lean Manufacturing – invented by Toyota); cut the number of dealers (why should Atlanta have more than say 4 or 5 GM dealers?); and they just need to shutter some of their plants – period.

And for the record – For Chris Dodd to call for the resignation of Wagoner is like spitting in the face of anyone with half a brain. These guys in DC have no idea who to run anything but campaigns and they have the gall to call for these executives to resign. IF I was Rick Wagoner, I’d go up to capital hill and set the record straight. It has been Washington regulations from CAFÉ standards, to union support, to emission standards that have ham strung the automotive industry!

an80sreganite | Dec 08, 2008 | 6:11PM

Jobs would run it into run it into the ground just like he is currently doing at Apple. MobileMe(ss), glossy screen iMacs, iTV, etc,etc, etc.

John | Dec 08, 2008 | 6:50PM

Attacking the auto industry like a software company is already happening in a big way, and that's over at Shai Agassi's Better Place. They're addressing how to get EV infastructure built and profitable, and letting other people build the cars.

http://www.wired.com/cars/futuretransport/magazine/16-09/ff_agassi

Jason Harris | Dec 08, 2008 | 7:13PM

@an80sreganite

American manufacturing cannot compete with labor in countries with considerably lower standards of living until our standard of living is considerably lower.

The ONLY WAY for American manufacturing to remain competitive is government protectionism (which doesn't happen in America) or INNOVATION, which these slugs in Detroit haven't done in DECADES.

And don't tell me there is no opportunity for innovation, if they these billion dollar companies had someone with half a brain working for them they would have seen this oil crisis coming (re: peak oil) and had an entire line of electric vehicles ready to roll.

They hung themselves, and it had nothing to do with the government.

Let them die.

patrick | Dec 08, 2008 | 7:40PM

Stick to reporting on I.T., not cars, since your not an expert in the limited domain of cars, then you shouldn't have an opinion. People should only talk about what they know completely 100%, then everyone will be happy.
However, from my perspective, you ideas area great.

philip andrew | Dec 08, 2008 | 7:41PM

We all know what would really happen, the cars would just keep getting smaller, you wouldn't be able to do any repair work yourself (like change the battery) and you would have to use Apple iFuel or iElectricty to refill/charge it, they would cost a lot more than they are worth, and the features would suck when compared with the cheaper Chinese varients.

TrendyTim | Dec 08, 2008 | 7:50PM

"You dont understand the auto industry"

HUH???????????????????


You know what - neither do you or current management at the US car makers. This is a very simple matter - you are failing... Period... You have reasons - you have explanations - BUT you have no money and products that people generally do not like. This line of thinking is why you are here and you still dont get it.

Stop and listen instead of preaching about what you do know. We are perfectly aware of what the auto industry knows:

- Generally poor products
- Businesses that dont make money

Truth Teller | Dec 08, 2008 | 8:00PM

I agree 100% with this article. That is all.

David Kirwan | Dec 08, 2008 | 8:10PM

Robert,

You're missing the point about what the priorities for the big three should be.
Your points are (in order of priority):
1) Design (belongs already for decades to European cars like Porsche and all Italian cars, so a relatively high hurdle has to be taken to gain traction here quickly).
2) Performance (is partially contradictory to no.3 and the current U.S. road infrastructure and speed limits make this criterium rather useless)
3) Safety and economy (this should be top priority and your target of -20% on fuel economy is too low: the Japanese cars have already reached that point compared with the average big three car).

The only way the big three can crawl back is by being top-of-class in:

1) Safety and efficiency (crucial since cars in general can be made much more safe and efficient than now. The technology is there (also with the big three). Now only the guts and money are needed to implement these features).
2) Quality (greater mean time between failures than now compared to Japanese and European cars)
2) Comfort (more automation to facilitate easy city-commuting and long-distance driving by for example implementing real dynamic cruise control).

There are enough possibilities out there. The big three only have the right to exist if they take these chances.

Erick | Dec 08, 2008 | 8:27PM

tl;dr

Jeebs | Dec 08, 2008 | 8:40PM

The model for the Big Three exists-it's called Honda.

ACS | Dec 08, 2008 | 8:47PM

If Steve Jobs ran one of the big 3 in the auto industry....

There would four distinct lines of cars. Low end cars, high end cars, SUVs, and Trucks. All four would be hybrids and look incredible.

The low end cars would only be two seaters with limited trunk space. They would be priced around $17K.

The high end cars would seat 6 and have enough trunk space to store 6 suitcases, 6 sets of golf clubs, and a picnic basket. It would come with standard luxury car features and retail for around $45K.

The trucks would essentially be the low end cars with long open trunks that are just, "incredible." They would be missing small essentials such as side view mirrors and bumpers. They would start around $20K.

The SUV would be the perfect vehicle, but would start around $50K.

I like Steve, I like what he's done to Apple, but he has a history of ignoring everyday requests and leaving people no choice but to buy what they can afford even if it's not what they want.


GWHenning | Dec 08, 2008 | 8:54PM

While selling the fuel for cars makes sense in an ideal world, cars/fuel is not analogous to ipods/itunes.

The fixed cost of rolling out fuel infrastructure in just enormous, while the fixed cost of rolling out itunes was minimal. Jobs could leverage existing internet infrastructure that was basically free. I'm not sure that McDonalds really performs the same service, and I'm not sure anyone would invest the $$$$ to pay the huge cost for a floundering auto company to roll out a fueling infrastructure.

Patrick | Dec 08, 2008 | 8:57PM

The idea to incorporate "charging stations" into existing operations like McDonald's or QuikTrip is brilliant.

Andrew | Dec 08, 2008 | 9:03PM

Great piece, with a lot of amazing ideas. Having spent the last 45+ years in manufacturing, quality, engineering, purchasing and management, I obviously have a few comments. The first is about violating the basic laws of economics. Neither you nor I can violate these simple laws that basically say cost must be less than sale price to survive. If this sounds simplistic, just imagine how long the big 3 have been ignoring the law.
The second is that quality is a process. It starts with design and ends with the discontinuation of a product. My personal hero is Dr. Deming and I wonder if any Harvard MBA’s know who he was and how important his 14 points are to the survival of US manufacturing. Third is efficiency, or call it productivity, but don’t try to achieve it in a union environment. The UAW is so firmly entrenched that the robots receive overtime and sick pay. Yes, union employees are well paid, but I can show you an example where 8, well paid union employees were replaced by 2, well paid, non union employees that produced twice the product in the same amount of time. There is no mysterious reason behind this example, beyond the union rules that were in place that eventually resulted in the shut down of a facility that had been in operation for over 70 years. Any successful small business owner can quickly diagnose production processes to determine profit potential and make the necessary changes to efficiently correct problems, while efficient solutions in a union shop are filed as grievances.
The last comment is about our culture. It’s all about the money. Most of us just want the money, without sacrificing anything we’ve become accustomed to. A concession to eliminate paying laid-off workers 95% of their pay is not a sacrifice, it is a crude joke the UAW would like you to accept as proof of their participation. Yes, the Democraps will approve the bailout, and the money will be wasted, when all we really need is one man who fully understands what Japan accomplished in 4 years after the war, and can successfully apply those same simple steps.

Otyce
coconinc@aol.com

Otyce | Dec 08, 2008 | 9:06PM

Apple "would make car and then fill it up..". Last time i checked it takes electricity to fill up apple and as far as i know they dont sell it. I do think the cars would look purdy!

B | Dec 08, 2008 | 9:49PM

Do any of you even own a mac?
I own a windows PC for personal home use
MacBook for personal on the go use
and MacPro for in home business use. It's a beautiful virus free platform. I have NO complaints, and there customer service, TOP of the line.
Yea, you may need to spend abit more, but by the time you would need to replace any part of an apple product these days, you'll have saved over 3 times the ammount you are spending.

VtKFBaFtI
(Vote to Keep Fan Boys away From the Internet!)

P.S: I have a PC. I use it ALL the time. I have alot of fun with it, but I spend more time running virus' scans to keep it running than I do working on my business from my MacPro.

Anthony | Dec 08, 2008 | 10:29PM

You should read up on Shai Agassi...

ZoFreX | Dec 08, 2008 | 10:38PM

Nobody would be able to afford steve jobs cars anyway.

mac | Dec 08, 2008 | 10:48PM

Most of you don't understand auto production or financing for that matter. It would take a few years to switch production and the UAW would shut you down in a week. So you'd have to be prepared to wait two years with your loans ticking before you were back in business. The loses would not be worth it. A few years ago GM tried to move something to Mexico and the union found out and went on strike. GM had to move it back. They did move some economy cars to Mexico but this had to be negotiated. The only way they could beat the union is if they had lots of cash at a time like now when there isn't lots of demand. Then they could sit out a strike. Another common misunderstanding is why certain European cars are nicer. Most of the European cars that sell here are luxury cars (they do have economy cars in Europe). If you're wealthy then you might afford that but for average Americans a Mercedes is not in the picture. (Mercedes did run Chrysler for almost ten years and how did that turn out?) With credit becoming even harder to get this is going to be more and more true. Some buyers will be forced to come back to Detroit. So the whole Jobs idea is off the mark from the get-go. Jobs would be better suited to run Saab. Bill Gates is the guy to run GM. He could bail them out too. Steve Balmer's dad worked for Ford and he'd be a good fit to buy and run that company.

Frank P | Dec 08, 2008 | 10:57PM

@Anthony

If you spend most of your time running virus scans to keep your PC "running" there is clearly something wrong with the user and not the machine. The computer doesn't simply "catch" viruses on its own. You play an instrumental role in facilitating the infections.

nordrassor | Dec 08, 2008 | 10:58PM

Great article.

You forgot the one more thing...

The one big difference is that Apple was started by Steve & Steve, it was cool, they used to sell their computers for $666.00, the Macintosh was cool, up until El Jobso was given the heave ho, Macs were pretty cool, things looked pretty dire in the late 90s before the second coming of Steve, but then he was back. Steve did get things cooking in pretty short order, but it was only 5 years or so since the decline had begun, when was the last time you looked at an American car and thought, you know what, I don't want the BMW M3, I want the new Cadillac sports car. Granted they are starting to make decent cars, but they have been pedaling dreck for so long, I fear even the great Steve could not turn things around quickly enough to save the American companies from their long over due, and well deserved demise.

Max

Max Taylor | Dec 08, 2008 | 11:04PM

It's interesting all the different directions people come at this topic. Comments for this article and the previous one do show one thing for me, in particular.

Where you live and what kind of "driving" you typically do influence your priorities in this debate.

People from the wide open spaces (mostly in the west) see little use for a car that will go 100 miles on a "fillup" (or charge). That's not far enough to go to the next town over.

People from the places with good weather want us all to bicycle around.

People from places with good mass transit can't see what all the auto fuss is about.

Those folks with freeway overload in their urban region want a car to get to work cheaply and comfortably.

It's not what all the discussion is about. But I suspect that all this "regionalism" in our views will make it really hard to come to some sort of agreement on priorities in the solution. The conflict will play out in congress where our various representatives will be walking a straight line. Let's hope they are sober enough to make it.

Lee | Dec 08, 2008 | 11:22PM

The real problem with the Big 3 is not WHAT to do, but HOW to do what they need to do; the companies lack cash, and are heavily restrained by the Union. I doubt Jobs has the necessary experience to turn around any of the Big 3.

Koba | Dec 08, 2008 | 11:28PM

The biggest reason for failure of any company is brand recognition and it's perception in the consumer's mind. American cars suck and most people know it. A Chevy Malibu is not a Honda Accord! Apple always had a decent product. It might have been expensive but it was was good. And the real reason Apple is still alive was the death of Commodore with their Amiga.

J. Maurice | Dec 08, 2008 | 11:29PM

Me again;
The take home lesson here is that Steve Jobs is a ruthless visionary with a reality distortion field that created and made the following very mainstream and very popular: Personal Computers, The User Friendly point & click interface, Digital Animation(Pixar), PDAs, legal, profitable and easy to use Digital Music distribution, a very user friendly Portable media players, and retails sales stores thus far in additional to the truly transformation iPhone and just what it puts in your pocket and in your hand (and it’s not just a phone, camera, music and video player.)

Oh yea, In the middle of all that, he took a company that was once an insanely great innovate start up that kicked him out and then coasted for a few years and then became just yet another business that nearly capsized and almost sunk under Management CEOs that were neither visionaries nor innovative leaders. He re-entered the company, recognized the aimless wandering and chaos and was able to take the helm back and remake it back into an incredibly profitable, innovative, respected and leading company once again and he did it very quickly all while helping get A Bugs Life, Toy Story I & II and Monsters Inc out the door at Pixar. Umm, Wow!

Detroit's Big 3 have this in common: all lack truly visionary leadership and are broken, which I believe, is the true gist of this article. And they are trying to get a bunch of Power-Hungry bastards in Government to help them out which is likely their kiss of death or at least an act of true desperation; looking to Washington for help. Only a truly visionary leader can snatch these companies from the brink, someone LIKE Steve Jobs(but probably not Steve Jobs himself!)

If the Big 3 cannot find visionary leadership, they should die. When a Big Tree dies in a forest, there are hundreds of small trees just waiting for their chance to become the next big tree to fill that gap in the sky. And they will grow fast and compete hard for it. The fractured remains of the Big Three or some brilliant upstart could be the next big thing and could move automotive technology forward far faster than the comfortable giants the Big Three have become. And they might find a way to move us beyond oil and gas for propulsion. The incentive isn’t there for the Big Three to do this anyway. And we’ll still have cars to drive in the meantime.

Back to the Visionary Leadership thing; Steve Jobs not only could create but transform; creating Apple from nothing was amazing in the day but resurrecting it after it lost it's way and at a point truly worthy of Michael Dell's quote in 1997 shortly after Steve Jobs returned to Apple:

'When it comes to the state of Apple Computer, everyone has an opinion.
And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one. "What would I do? I'd shut it down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.'
(From CNet news: http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_3-203937.html)

And one brilliant and Uber-successful computer maker's belief that Apple's best days were over was an indication of how incredibly hard it is to unsink a Titanic.

Not only was Michael Dell brilliant, he was also WRONG.
Steve Jobs straddled Pixar and Apple and was able to transform Apple to an incredibly profitable and respected company in an incredibly short time.

Robert is wondering if there is ANY business leader that can take even just one our countries last three car companies and keep it off the bottom of the Atlantic.

/rant

Count me in on Paying a nominal monthly or annual fee to keep reading Robert’s insightful and thought provoking articles; $1 a month, $12-$15 a year, or more if it’s beyond weekly, I’m in, this beats the hell out of reading whatever they are putting in print these days…
Just consider me a Microsponsor of his “new” Gig/Column on his own; Hmmmm, Microsponsorship…)

Gozman | Dec 09, 2008 | 12:03AM

Apple killed the Amiga silly.

eddie ever | Dec 09, 2008 | 12:17AM

Sounds like you think Bill Gates is the person GM needs, and Steve Balmer for Ford. I think you're underestimating how easy it is to create a new auto or computer company at this point. Jobs was lucky to be in the right place at the right time when there wasn't any industry.

Frank P | Dec 09, 2008 | 12:21AM

No, Amiga fell to the same corporate dinosaurs that are killing the Big-3 Automakers. Innovation was stifled in the obsessive quest to make it a 'business computer'. The company was sucked dry by executive salaries, and whatever money was left was wasted on silly side projects that were not ready for market like CDTV.

Rick Cain | Dec 09, 2008 | 12:23AM

Really, the problem is this. The big three make crap cars never mind who they compete against or what sector. They are crap and need to own the problem. Just like the UK in the 1970's. There are parallels with the UK insofar as the unions also.

They have to go broke to get better. There is no other path.

Just like the UK 100 years ago the sun is setting on the US as a manufacturing super power, sad but true.

Phillip | Dec 09, 2008 | 12:36AM

Steve Jobs is smart, but he wouldn't know
how to beg for a bailout if he needed one.

thanks from tony

ntopics | Dec 09, 2008 | 1:24AM

The problem with outsourcing the way you describe is that now a huge part of the purchase price of that new "American" car would go to another country instead of feeding another mouth here. How much more money can this country afford to bleed away to foreign nations?
China could cripple our economy - not put us in a recession, cripple us, if they could call in all their loans.
Why is it a good idea to give away more industry than we already have?

Dan | Dec 09, 2008 | 1:34AM

Big Oil has sabotaged alternatives-to-gasoline and gasoline-efficient technologies for decades.

That's nonsense. The simple fact is, we use gasoline because it's still cheaper than the alternatives. If and when that ceases to be the case, then we'll go on to some other technology. Gasoline delivers a hell of a lot of power for weight.

-jcr

John C. Randolph | Dec 09, 2008 | 1:47AM

Outsourcing. The cure that kills the patient. It may keep the automaker's heart pumping for a short while but the jobs, and auto buying power, would follow the outsourcing. There would fewer jobs at home, therefore fewer customers, and the patient would die.

What if Ford or GM or Chrysler no longer thought of themselves as in the auto business but in the transportation business? What if they made super fast trains and green buses and lightweight bicycles?

KT | Dec 09, 2008 | 1:57AM

I have to agree with KT's comment. Most of American car makers focus only on making cars. Mean while you will find a small Honda's engine on a lawn mower or on a speed boat, and who can forget Asimo the robot. Toyota do the same kind of things and a lot of European car makers don't rely completely on cars too.

Mohamed | Dec 09, 2008 | 2:23AM

I think one thing most people agree is that something drastic must happen to inject some new thinking, new leadership into these companies, and shock them into change.

I think the people pro- or anti-union over-simplify the issue. If you think foreign companies employing Americans play the shell game, just look into what WalMart and Dell do to your local workers and the tax breaks they ask for in return. You could also say MSFT is not bankrupt because it hired almost no union workers, and there is barely a company-wide let alone statewide or national IT workers union, yet Gates wants more H1-Bs, but that is an issue for another day. German and Japanese auto workers are unionized too. The problem with our schools is not with the union, but the culture. If the unionized teaching gig is so great, why is there a teacher shortage? Why are the commenters or the parents not working there? In many Asian countries you have to take tests just to get into junior high. Americans take school for granted. Capitalism is supposed be about competition. Now we have to compete. The next batch of university students will now learn that lessen the hard way.

Instead of thinking selling plants to foreign competition or out-source overseas, what if the union workers own the plants? What if evey auto worker is a share holder like Southwest employees, or even partial prodution service contractor? I haven't heard enough alternatives from the government or the auto companies, which is bad news.

The one serious question I haven't heard asked is that even with a bailout, will it be enough in 6 or 12 months, given the available products (quality+price) and the economy? There is no guarantee to profit within the short amount of borrow time even if the Big 3 did secure loans. So is this bailout the potential Iraq - failure is not an option and spare no time limit or expense?

Taking the Jobsian metaphor literally is a mistake. Building "insanely great" products has nothing to do with union or no union, but culture and management, and Will. Are you saying that union workers are lazy, have no pride, or stupid? Or are insanely great ideas and motivators simply never make it in our corporate America today? What if part of the union contract is tied to the profitability of the product? Apple customers have come to expect great quality. We need to put that demand on American cars. That's the bottom line.

Deanston | Dec 09, 2008 | 3:27AM

The big 3 would be leaders if they followed the Carter law on milage improvement instead of the Regan bailout by not inforcing the law and fines imposed by failure to improve MPG yearly. They would be rich not bankrupt. ( Regan recindered the law and removed the solar panels on the White House. )

gg | Dec 09, 2008 | 3:27AM

Thanks Bob.
It's funny to notice it's exactly what I told my wife a few days ago about our european car makers, who are nearly in the same health than yours.


Simplify your offer, work on design, on marketing, study compressed air engines, be fun !



One more thing:


Thank too for these great columns. More than this, I decided to be a computer engineer 20 years ago by your fault, after i read a translation of your famous prehistorical Accidental empires book.


For this, and for all the amazing subjects you have treated, with a polemical, caricatural, and/or idealistical point of views


Thank You.


jt | Dec 09, 2008 | 3:48AM

And another rant - it takes a 6 year degree to teach even kindergarden but you don't even need a high school diploma to sit on the school board - no, doesn't mean those who have no higher ed is ignorant, but teachers are only allowed to teach the materials approved by the school board in the way approved by the individual school board, which often run afoul of statewide and national standards - such is the direction of our country's K-12 education (I'm not a teacher but heard enough horror stories from friends)... On 2nd thought, perhaps a parallel can be drawn with the auto companies too. The same school boards would rather pay top $dollars to flight-by-night administrators and outside consultants, but 1st year teachers barely make the same wage as a Hooter girl. That is what I meant by culture.

Deanston | Dec 09, 2008 | 3:52AM

Reading these comments it's obvious most of you like European cars. Detroit doesn't really have a problem competing with them, it's more Japan. The Europeans are like Apple, they barely have a market share. A strange omission from Jobs lore is Microsoft crushed him. Detroit is like Microsoft. Balmer's dad worked for Ford. They copy European stuff but they have to keep the price down and be realistic. Of course, the tech industry relies on asian hardware too, which is the biggest difference between Apple and Detroit.

Frank | Dec 09, 2008 | 4:10AM

What if Steve Jobs ran the USofA.......

Dan Marois | Dec 09, 2008 | 7:04AM

"Instead they'd put out an RFQ to every company in the world for 300,000 Chrysler Town & Country minivans as an example. Now THAT would be a dramatic move." Like Volkswagen is doing with it's new minivan (from Chrysler)? They had a perfectly good minivan (a classic even!) but I guess it's cheaper to buy 95% of it from Chrysler. Or like ZENN Cars (www.zenncars.com) are doing with their tiny eletric vehicle - buy the body from a European manufacturer and shove in the electrics in Quebec?

When you think about it what would be the point of Chrysler if it didn't build it's own vehicles?
If I were a fan of Chrysler (and I'm not) why would I buy a Chrysler built by Acme Vehicles International? The computer/car analogy has been made for over 20 years in spite of it being completely ridiculous.

Dan Marois | Dec 09, 2008 | 7:21AM

Interesting concept, but I'd like to add two other ideas:

1) How about when the manufacturing factories being spun into worker-owned coops (with some guaranteed contracts and gov't money for a few years to give them a chance). This will give the union workers control over their own destiny.

2) Make the car design companies responsible for disposing of cars on the other end. It should drive innovation into better materials and recyclable parts, benefitting consumers dramatically.

Ishmael | Dec 09, 2008 | 9:43AM

Nice article! Thanks

alexzz | Dec 09, 2008 | 9:55AM

It's very simple. They have to realize they are transportation companies and not car companies. They're too focused on making cars, and not on facilitating transportation. I like your ideas of McDonalds and charging station.

francine hardaway | Dec 09, 2008 | 10:02AM

Setting-up a modern car assembly line costs many times more than setting-up an assembly line for electronic products. Procurement is also awfully long. These two factors would make it impossible for car companies to outsource car manufacturing in the short term. Within a decade or two? Perhaps.

Steve Jobs could rethink the whole business however and come up with tremendously more efficient and desirable cars. That is something that serious observers of the industry know that the current crop of car executives are totally unable to tackle.

LinkA | Dec 09, 2008 | 10:11AM

I have three comments:
1)Steve Jobs not only has a business interest in Apple, he has an emotional attachment (it's his creation)that Scully & Amelio never had. Loan your Ipod to someone but they won't take care of it like you would.
2) The problem with accounts totally controlling business decisions rather than design guys is this - just because you can save a dime changing a process doesn't always mean you should ("penny wise pound foolish idea").
3) Contracting out sometimes results in too many difference year to year (going to the lowest bidder and corner cutting) such that the product suffers in quality leading to lost sales.

Companies need to keep a balanced approach and not swing too far in any direction

Terry H. | Dec 09, 2008 | 10:19AM

Rampant outsourcing is what's causing all the problems in this country - the last thing we need is more of it! If anything, we need to bring manufacturing back here. Outsourcing may be good for the corporate bottom-line, but that doesn't help anyone except the shareholders - and that means it doesn't help very many people at all! I think we need to start thinking about what would be the best for all of the company - employees too - and not just the few shareholders. Also, I hate it when I hear a news report about a company that supposedly is losing money, when all it really means is that their profits are down from last year at this time. They're still hugely profitable, but just not making more money. Who cares, as long as they're making a profit!!??

Jim Cray | Dec 09, 2008 | 11:04AM

Our steel industry was beset with the same problems that Detroit now faces. Steel companies went through bankruptcy and restructured. The country survived. The country can again.

Will C. | Dec 09, 2008 | 11:13AM

You have at least a couple misconceptions.

First, large premium vehicles (like the Hummer) have been extremely profitable. Not in the last few months, but certainly over the course of years. If high oil prices were sustained it might be a different thing, but if they cycle then those big cars will sell cyclicly too.

Second, you can't chop the cheap vehicles ... you need them to satisfy CAFE. New technology should alleviate that, but you're talking about half a decade to get that out there, minimum. (Maybe the Volt will make it in 2010 -- but it's going to sell for upwards of $50,000 and will likely see very few buyers.)

Third, outsourcing production means losing substantial industrial capacity. In business terms this is not such a big deal, but in national defense terms it's a nightmare scenario. What if we go to war, especially if we're on the receiving end of a war? That capacity could make the difference between success and failure.

It's a pretty complicated issue. Most of the economists think that the primary problem is the union contracts and pension liabilities which boost cost of product significantly. They need to lose those. Bankruptcy would be very good in this, and a number of other, ways ... but of course there would be a significant rebuilding period following a bankruptcy.

What I don't get is how a $25B loan package is a "temporary" solution. If they can't figure out a way to be successful given that kind of cash injection they DESERVE to fail.

jim frost
jimf@frostbytes.com

Jim Frost | Dec 09, 2008 | 11:18AM

What about the Big 3 owning the retail stores - like the "Apple Store" - that sells their cars? That is another Jobs approach that may want to be explored. You can then introduce the "no-dicker-sticker" approach to selling cars.

GaryF | Dec 09, 2008 | 11:26AM

Unfortunately, the Big 3 cannot own retail stores. Local dealers have been very successful lobbying state legislatures for protections.

Check out this article from 2006:
http://www.newyorker.com/archive/2006/09/04/060904ta_talk_surowiecki


Dealers are not employees of the car companies—they own local franchises, which, in every state, are protected by so-called “franchise laws.” These laws do things like restrict G.M.’s freedom to open a new Cadillac dealership a few miles away from an old one. More important, they also make it nearly impossible for an auto manufacturer to simply shut down a dealership.

and

G.M. makes money (when it does) on new cars and on the financing of loans. Dealers, by contrast, make most of their money on servicing old cars and selling used ones. So dealers can thrive even when the automaker languishes. And at the state level they often have more political influence than automakers do. In the late nineties, for instance, local dealers were challenged by companies that wanted to sell cars over the Internet. In response, some states, including Texas, actually passed laws making it illegal to have a business selling cars online (unless you already owned a local dealership), and regulators told Internet companies to cease and desist. When Ford itself started experimenting with online sales, dealers’ vigorous objections (along with legal challenges) caused the manufacturers to quickly retreat.

Sys Admn | Dec 09, 2008 | 11:49AM

I could see it now the, iCar, no steering wheel a
mouse keypad, or maybe a joystick? All with your thumbs keypad, before you drive you'ld have to train the iPad to start the iCar, no drive, no GPS no have an ad-on, can't have regular GPS, use google maps.

How bout the wheels, would auto-inflate or use a new wheel made of flex-spider webs. Car would have a burnished steel or aluminum titanium finish, weigh 300 lbs or less all composite, uses newest lith-ion-hydro batteries, goes greener than green, just uses the magnetic forces of the universe to charge. Why stay two-di it could go forward, backward, sideways up or down.

Options: radio smadio, Firefox-Safari interface all remote with satellite, laser guided reflux ion support. Whatever that is.

I like it, get me some Apple and Google Stock at 5,000,000 a share.

Captain Lightspeed Out

Jan Clairmont | Dec 09, 2008 | 11:54AM

I could see it now the, iCar, no steering wheel a
mouse keypad, or maybe a joystick? All with your thumbs keypad, before you drive you'ld have to train the iPad to start the iCar, no drive, no GPS no have an ad-on, can't have regular GPS, use google maps.

How bout the wheels, would auto-inflate or use a new wheel made of flex-spider webs. Car would have a burnished steel or aluminum titanium finish, weigh 300 lbs or less all composite, uses newest lith-ion-hydro batteries, goes greener than green, just uses the magnetic forces of the universe to charge. Why stay two-di it could go forward, backward, sideways up or down.

Options: radio smadio, Firefox-Safari interface all remote with satellite, laser guided reflux ion support. Whatever that is.

I like it, get me some Apple and Google Stock at 5,000,000 a share.

Captain Lightspeed Out

Jan Clairmont | Dec 09, 2008 | 11:59AM

squeaky squeaky squeaky

(sound i am making while masturbating to your fluff piece here)

beerby | Dec 09, 2008 | 12:04PM

The main problem with the "Big 3" is "Big". The "Big 3" need to be the "Medium 7". Rather than outsourcing manufacturing, just spin it off into its own entity. GM could split into Cadillac, GMC, a dedicated Hybric/electric division, and so on.

Too big to fail is too big to exist. We already saw this happen with AIG and the Wall Street banks.

Kiaser Zohsay | Dec 09, 2008 | 12:57PM

1. Go Electric, Duh. Electric motors: 90% efficient. Electric batteries 90% efficient. Electrical cost to drive 200 miles, about $4.

2. In-wheel motors allow dramatic redesign of the automobile. 4wd with traction/stability control is easy, doesn't require a transmission and about 12 other parts designed to keep an ICE running smoothly. Hydraulic shocks can adjust ride height automatically to can go from 2-3" of ground clearance on the highway to 8" for off road. Tire pressure could also be automatically adjusted to optimize fuel economy depending on road conditions. Putting the battery pack in the center floor of the vehicle will make the ride super stable and safe.
http://www.gizmag.com/michelin-active-wheel-production-electric-car-by-2010/10489/
With all electrical systems the car will need much less maintenance, plus if you blow a motor you still have 3 more to drag you to the next service station.

3. Ultra capacitors will be part of the electric auto's battery pack for sure, but are still a few years off in terms energy stored per volume & weight. So McDonald's is too yucky & cheap for the ipod set who will buy these cars. A sit down restaurant would be better, but a need for parking space might bring back drive-in restaurants. Figure 80% charge within an hour for 1st-2nd generation devices. I think there is a big opportunity for retailers(best buy, target etc) to give away trickle charging for free as an incentive to get people to drop by frequently. The amount they would need to pay for the electricity would be minimal and the customer would feel good about their time wasted shopping when they jump in the car and see the green glow of the charge indicator.

4. Upgrade the product line, people pay a price premium for GBs in their ipod, use vehicle battery packs the same way. Release the first gen units with an achievable, cost effective battery pack, 2nd gets a higher price and considerably more battery, rinse, repeat.

paulwesterberg | Dec 09, 2008 | 1:27PM

All the folks bashing the Auto worker's unions are barking up the wrong tree. The _only_ economical reason to save the automakers is to save those high-laying jobs that generate economic activity. Saving burger-flipping McJobs or the ones at Wal*Mart (Always Low Wages) do not kickstart the economy.

Unfortunately, _everybody_ is barking up the wrong tree as far as fixing the economy. With a more deliberative look backwards, economists have now concluded (correctly) that the current recession started long before the mortgage crisis (which dried up credit which led to the request for a GM bailout). The recession is what caused people to start being unable to pay off loans. It did not start the other way.

Therefore, bailing out Citibank or General Motors may kickstart the economy a bit, but it won't fix anything fundamental.

Mike Moxcey | Dec 09, 2008 | 2:14PM

One more thing:
5. Online sales. You can get a loan online, you can read reviews & tech specs online. There is entirely too much wasted capital & wasted profit tied up in cars sitting on lots at middlemen dealerships. Own the entire distribution channel make it efficient and cut out the extra layer of inefficiency. Small company owned service centers with a few demo cars is all that is needed, you should be able to put it in a store at the mall or as a mini store at best buy with cockpit driving simulators. Limit the number of feature packages and colors so that the distribution system has very few unsold cars at any time.

paulwesterberg | Dec 09, 2008 | 2:16PM

If Steve Jobs had stayed at Apple instead of leaving for awhile we'd still have sealed Mac boxes instead of Open Macs. Not all of his insights were all that good.

David B. | Dec 09, 2008 | 2:33PM

Mike Moxcey - using terms everybody, only, and the implied all makes your arguments invalid out of the box. And placing underscores demonstrates an emotional foundation to your argument.

Dave | Dec 09, 2008 | 4:34PM

Ford and GM should just start selling their European cars in the US. Make them slightly heavier and less fuel efficient, to suit the market... Problem solved.

Stephen Mackenzie | Dec 09, 2008 | 4:36PM

If you buy a car on the first day the model is released you'll have to wait in line and pay $40,000. But if you wait two weeks you can get the same model with all new upgrades for $20,000 - and you won't have to wait in line. Don't worry all you early adopters - you will get a coupon for $1000 that you can apply to your next car purchase.

Anthony | Dec 09, 2008 | 8:14PM

I would hate to lose Steve Jobs at Apple, but I think he would do a great job shaping up the Auto industry

Mike Williamson | Dec 09, 2008 | 8:34PM

No one will get to this post :) but I have to put my 2-cent in.

A) Mr. Alias AKA "Robert Cringely" the man who is not, shoot me an email if you do start doing this for a fee. I would be interested.

B) There is a massive response and that is causing massive confusion. Many of the technology and technical industry terms that are normal have been spun with the "newspaper" term and I fell miss represented.

1) Outsourcing: I believe Bob means this in the purely technical terms. The company who designed it does not make it. This does not necessary refer to the actual finished product "the car". It could refer to the entire project going to many different companies for many different parts. A couple of locations for final assembly.

Example: Intel processors (No this is not some secret... I hope). The CPU it self is made on silicon wafers, that is then tested, cut, put into "packages", assembled with wires and then boxed up. Intel is one of the only companies in the world that makes everything, video chips, cpu chips, flash chips, mother boards, network cards, heck they used to make Intel boxes in Dupont Washington that an OEM could have their sticker put on and shipped out. This was almost all done through out sourcing.... Yes really. They design the entire thing in house, all the parts. They then take 2 - 4 manufacturese of the thing they need, send them the "schematics" and get a cost for prototype and a deadline. That means 4 seperate CPU packages, 4 seperate FR4 mother boards, 4 separate mask generation companies, 4 different... In the end they have acceptable variation requirements (part of any mechanical design)and cost accounting (bean counters are tuff to work with, but needed). Is it cheaper to have it made here or made in tiawan and shipped here. Did the parts created by all 4 manufacturers meet our mechanical requirements? What is the turn around time on each, can we get away with not keeping a stock, but making only what we can sell? Can we go with multiple manufacturers to insure we have a source should a tidal wave take out silicon valley?

Correction on the newspaper reaction: In a nut shell out sourcing is the act of going through the management of manufacturing with a third party. It does not mean it automatically goes over seas and it does not mean people loose jobs in the current plants. It does mean competition and there are different levels of out sourcing. The only part that Intel makes internally for security reasons is the actual initial wafers in a test plant such as the one inn hillsboro oregon (D1B). Once technology moves along thoug they will farm out the creation of wafers or the flash or chipsets to other companies even the putting of chips in packages may be outsourced. You can easily make a car and all of it's parts in a cad system. If you can make multilevel packages of billions of tranzistors and then model the electricity, heat, power consumption, EMI in each part ahead of time.. you can manage a car.

B) Steve Jobs : Many people have confused this person with the actual apple company. Apple in the last few years has two parts that have really shined. Direction and Creativity.

Newspaper correction: Steve Jobs is credited by the news papers with having done every invention Apple has released. Imagining a guy in a thinking cap sending out an email with designs and info to the company and saying, we are doing this! Basically he is "everything". In reality Steve is a director. He knows how to manage highly intelligent people who disagree. When they disagree, you make them compete against each other. If you can not compete, get out! This forces people to think and work. It also rewards hard working individual thinkers. Totally not something you want to have happen in a manufacturing plant.

I believe Bob is wrong on his point that Steve Jobs could fix it all. Ok, If you want to improve design he may work to a point so dump the manufacturing....

But to fix Ford or GM (also not mentioning the other) you not only need to have an effectively changing and improving design you must higher the mechanical geniuses to help improve the manufacturing system. Unlike almost everyone else I am not going to blame the unions and workers. I think the best thing for everyone in those companies would be to take some notes from an effective company such as Intel on it's manufacturing. They spend millions of dollars on a single machine, pay a ton of money to the people trained in the fabs and then also have contractor's on site for those "oops" cases. Now anyone who has seen office space knows that Intel's design side has a few things that could be improved, more status reports than days in a week, but at the same time it has massive benefits. I think if you want to fix a design and manufacturing company, you need seperate experts for each one.

I would like to offer Intel's model up as a more correct option. Do not have a supply chain of parts, contract and have parts made as they are needed. Assemble only what you have sold or in the least keep only a few on hand as you can predict what capacity is needed.

C)Fully Electric cars: I have read a few manufacturing engineers (or at least Electic car hobbyists) chime in.

Newspaper assumption: All batteries are made in china, so we are never going to be able to make them. Batteries though would save us all.

Reality check on Batteries: Which country is the technology experts int he electrical industry... scary thought, but US. According to the US economists we could start making the very toxic batteries china is making in a very short time. Why in the world should we? Our current patent system means that the first home brew environmentally safe battery made on a college campus will be owned by who? Most likely not a US company, unless it is found to be a security problem then we could break patent law. Only systems we have available as option today are more efficient engines and hybrids(which could be using biodiesel). Anyway you look at it, we need improved designs in order to be environmentally safe.


C) Electric Motors: Are awesome and never wear down.

Newspaper Assumption: Electric motors only have one moving part so are far less likely to have problems.

Reality check: Who has not set the choke up on there electric drill and forced the motor to do more than it could? Heat is bad for electric motors. Now this only effects the southern regions of the US, but an electric motor in 110 degree weather is going to need more current than one in alaska/canada durring winter. It will also wear down far faster than expected under any sort of over loading. I am not saying that electric motors are not more efficient and by far more reliable. I am saying that we need to put in more studies on the sanfrancisco electric buses and how the current designs could be improved. No reason we can not have a lawnmower engine running diesel fuel(or bio-deisel), powering an electric motor but the design does not exist today that could take an overloaded small vehicle in the heat of summer through the desert and not damage the motor. Which will be extremely expensive.

I believe this Article is awesome. I agree with a ton of the posts about letting the companies go into failure and also about the fact they will not result in unemployment lines. No way someone would not want to pick up the manufacturing... But we need to make sure that in the bankruptcy we cut middle+ management completely. Then also cut out the stock holders until the union pensions are insured and there is a plan in process. We can not cut them out completely however, because how many employees do you think have been tricked into buying company stock? It will hurt the employees more than management to loose all that money.
From the design side, I personally think it would be really good to have a ton of unemployed car designers. How do you think we have gotten so many cool technologies after the tech crash? The bright ones who are driven will innovate what they could not in their larger companies.

Rob | Dec 09, 2008 | 8:52PM

Has amore Lovins simple disappeared?

elmer | Dec 09, 2008 | 9:53PM

While I have great empathy with the notion that the Big 3 should be left to reap the fruits of thier mismanagement, unless we are willing to chance pushing a very bad Recession into a Depression, this is probably not the time for Tough Love. Remember the unintended consequences of letting Lehman Brothers go. One crisis at a time, eh?

Also, to an extent our government (which is all of us, really) played a role in the industry's current state by dropping the ball on CAFE, fuel taxation, monopolization, health care, dealer franchise laws, etc. Not to mention the government role in the current financial crisis -- a perfect storm of deregulation and greed, which is straining all automotive players, foreign and domestic.

And, we really do need a domestic manufacturing base and meaningful jobs for our national security.

Ford and GM Europe currently build there the cars we need here, and Ford, to its credit, plans to shift its European models here.

Europe and Asia have smaller, fuel efficient cars due to the incentives provided by high fuel taxes and fees based upon weight and horsepower. We must adopt taxation policies that give industry and consumer the certainty that fuel will be more costly than in the past if we expect to modify consumer behaviour. Maybe a fuel price floor, pegged to rise incrementally over time, with the proceeds to Green transportation alternatives? Incentivise with costs and let industry figure out the how. My worst nightmare is the government dictating a technology solution to the industry.

It may well be that a small fire must be built under the butts of management and unions.. but can't we hold off just a bit until the raging conflagration in the credit markets subsides? The loan dollars are chicken feed compared to what we are (still) wasting in Iraq, and the risk is to all of us right now.

(Bob, I'm in on the subscription model. Preserve the comments feature; your readers are (largely) fascinating and informed.)

Dan Casali | Dec 09, 2008 | 10:43PM

i have so many problems with this vision... if nothing else, though, yes: i think jobs would be enough of an arrogant a$%hole to blame the unions, risk it all, and take the callous measures you outline, putting his own financial interests ahead of both his workers' and the american consumers'. thankfully, he is not the founder of a car company, and wouldn't have the cult status necessary to do any of this. and thankfully, a car is NOT an appliance like a computer. few people i know would trust their money and their lives, and those of their children, to an overpriced, secrecy-clad, and recall-prone machine made from the cheapest possible parts, put together by whatever chinese sweat-shop paid its workers the least, and finally rushed to market with critical errors still present in its design--no matter how sexy its marketing. you, bob, apparently have 2 children; would you?

by the way, i, too, am right most of the time.

zoe | Dec 10, 2008 | 2:50AM

The auto industry is a very different business than the computer industry.

There is too much regulation and liability involved to simply entrust your product to the lowest bidder. In the real world, the EULA lanugage that the computer industry hides behind won't fly. I'm not even sure why it flies in the computer world.

A computer crash I can easily survive; a automobile crash not nearly as likely.

Besides, this path has already been explored -- a bunch of geeks with no car experience commission a chassis, a powerplant, and a gearbox, combined with their own software, and marketing, then do final assembly in their own facility.

What would have been a cakewalk if the product was a computer wasn't so much of one when the product was a car, the Tesla. To meet both the regulatory and commercial standards that were far higher than they encountered before, they had to spend much more time and money than they anticipated...for a niche vehicle with narrow parameters, using proven components.

Too many people simply underestimate the task of producing a modern vehicle that provides levels of performance, comfort, utility, reliability, and durability that have never been higher before. All while meeting ever increasing regulatory and competitive demands.

E36Piloti | Dec 10, 2008 | 4:48AM

Funny, all the great American car manufacturing plants do it with greater quality, more reliability, and better fuel economy than any of the Big 3. And they accomplish it all without unions. Of course, they have names like Subaru, Toyota, Honda, Nissan, BMW, Mercedes, and even Hyundai. Even if the Big 3 went under, there would be plenty of automotive life left in American industry.

Al | Dec 10, 2008 | 6:30AM

To address this notion from E36Piloti
"The auto industry is a very different business than the computer industry.

There is too much regulation and liability involved to simply entrust your product to the lowest bidder. In the real world, the EULA lanugage that the computer industry hides behind won't fly. I'm not even sure why it flies in the computer world.
"

Think back to the Pentium 1 flaw. It was a processing issue on one specific floating point that only mathematicians calculating the trajectory of meteors hitting distant planets would care about. But cost the company 500+ million to recall all the chips and put them out again because of a single newspaper stating that the chips were flawed. When the company was barely making 2 billion that recall taught it a lesson. Design into the product a way to patch the system on the fly. Meaning fuses and internal mechanisms that can be changed, but are an overhead to each design. Imagine being able to plug your car in and get an online update that reads your standard driving practices and makes adjustments to timing or components to improve mileage or performance.

Intel is not software. No one would by a Intel box that crashes often. Even AMD learned from thier original Athalon design which had a habit of over heating and stopping or burning up, that design manufacturing and quality is important.

I will not disagree that there are regulations. But think about how easy they are to meet with standards. How many cars have the same transmission? How many have the same engine? How many the same breaks? how many airbag systems do you need to design?

The process all successful manufacturing and design uses is invent, simplify, reuse, then work on the next revision of that same component. Maybe car 2.0 looks like car 1.0. But you have improved the engine and transmission so car 2.0 get 50 miles per gallon rather than 30... Maybe car 3.0 has has self inflating tires and suspension that actively change pressure based on the weight of the car load. Maybe car 4.0 a button that changes fuel or is electric hybrid .

My point was, if your features and components have enough improvement over the last version, you create a reason for people to "upgrade" and you differentiate your self. Intel has everyone in the world thinking that they need to change out their hardware (which still works) every few years. Grandma who just does email of course still uses a 486, but everyone else needs that extra performance.

Intel or IBM would be a closer comparison to GM/Ford and both have been successful in very competitive environments. Software ran into the problem where a couple of college kids in a garage over 3 months could make a better product. If the Auto industry in the US is unable to innovate and do better than the garage shops in india and korea then they need to change.


rob | Dec 10, 2008 | 8:44AM

Things are moving. I see Shai Agassi ( Better Place Company ) trying to change our experience ( I'd say ethos ) of car's ownership/relationship into something else - consuming milage of transport, buying units of transport just as we buy/utilize other resources.
Steve Jobs is doing a similar transition - you buy a unit of entertainment, not a device. The "gadgetry" is vital here but it's not alone - he makes a profit from the whole process.
Agassi is not there yet - his model is missing the experience, the "gadgetry" - transform the car as we know it into an "iCar".
It was a pleasure to agree with some of Bob's ideas as expressed in his last articles about the
car industry.

Moish | Dec 10, 2008 | 10:10AM

Have you seen the production Volt body? GM took the cool Steve Jobs Volt concept body, and turned it into a Chevy Cobalt. It now looks horrible. Never mind they have major issues with the electric range being about 13 miles on the highway if you throw in a little hill.

mcwop | Dec 10, 2008 | 11:06AM

Rob, I wasn't addressing your comments directly. However...

A processor recall due to hardware errata may cause bad spreadsheets, or a math geek's thesis to go awry. It's bad PR for Intel, and may cost them some business.

On the flip side, let's say you have a tire recall, like the Firestone ATX fiasco. When automotive products fail, people get hurt, and die. The consequences are much higher and cannot be dismissed by some BS "license" contained in the fine print.

The regulations that the auto manufacturers must abide by are written first and foremost as safety and performance standards. Compliance to those standards is not about conformity, commonality or interchangeability of parts.

Much of what is being advocated is already in practice, if not to the extent that Bob advocates. The fact that it's being repeated illustrates how little many know about the auto industry.

People shouldn't overlook that the auto industry is over 100 years old. While the need for change is evident, you can't overhaul the industry, its products or the infrastructure that supports them overnight. The ship can't turn around that fast.

Silicon Valley might be a hotbed of smarts, technology, and agility, but its principles aren't going to translate directly into other industries, especially well-established ones. I should also point out that SV has its own foibles and up/down cycles.

E36Piloti | Dec 10, 2008 | 12:56PM

Chrysler already outsources most of its European manufacturing to Magna-Steyr. Porsche outsources the Boxster and Cayman to Valmet.

And have you taken a look at Honda's Japanese lineup? http://www.honda.co.jp/auto/ The only thing they don't sell is trucks other than their Kei-trucks. The only reason they (or any other foreign manufacturer) are limited in the US is the cost of federalizing all those models.

Of course, even Honda looks specialized compared to Toyota in Japan. http://toyota.jp/carlineup/bodytype.html

mcwop: The Volt body had to change because the concept was as aerodynamic as a brick, and when you're trying to squeeze every last yard out of that battery, that is not a good thing.

Now it looks more like its Toyota and Honda competitors than it does a Cobalt...but of the three, I think it's the best looking.

Ian | Dec 10, 2008 | 3:35PM

"People shouldn't overlook that the auto industry is over 100 years old. While the need for change is evident, you can't overhaul the industry, its products or the infrastructure that supports them overnight. The ship can't turn around that fast."

Tell me about it. I started work at Bell Telephone Labs in 1976. Lots of embedded attitudes and technologies have made it difficult for the telephone companies to embrace the new ways of communicating the way customers want. Especially true for the manufacturing arm -- Alcatel-Lucent stock, anyone?

I've been amazed at the impact corporate culture and structures have on the ability for a company to evolve.

Perhaps we need to recognize the need to let ossified companies be replaced by new ones that work differently.

For that to work, though, we need a mechanism to provide polyester parachutes for those who can't get golden ones.


joe davison | Dec 10, 2008 | 4:34PM

With 22 billion in the bank, Apple could buy all three car makers and start making their own cars. In a year, The iCar would be out selling Japanese cars - in Japan!

Tivo the Mac | Dec 10, 2008 | 4:47PM

The term you are looking for is "Fahrvergnügen".

Wheat William | Dec 10, 2008 | 5:30PM

This is inspirational to say the least! Even if the car companies can't buy a CEO like Jobs, they should consider that bussiness model for sure !

Vagelis | Dec 10, 2008 | 8:02PM

I concur and her is my take here http://tiny.cc/BailOutTheWrongGuys why bailout/invest or whatever in 3 losers -- why not help Honda, Toyota or BMW build more cars right here with American workers

michael gibbons | Dec 10, 2008 | 10:22PM

This concept of putting “Steve in charge” has been repeated so often in the online world over the last year, I actually thought you had said it first. One of the most important industry magazines, Wards Automotive, has been discussing full car outsourcing for the last 10 years. Tier 1 suppliers are at the point that it would be trivial for any of them to manufacture a complete car. The auto show circuit has demonstrated one or two concept cars a year designed and built by one or two of these suppliers putting out working, drivable prototypes as a showcase for their technologies. In addition, many companies including Porsche, Saab, Volvo, and Mercedes Benz already outsource specific models to specialty companies to assemble low run models. Cars are like semiconductors. The cost of manufacturing facilities is a drag on the bottom line. Ford, GM, and Chrysler need to concentrate on the product side: Design, marketing, sales, and service.

Apple understands how to mine more sales from the first sale. Detroit doesn’t get this, along with almost ever other car company in the world. Currently dealers get most of the action with aftermarket tires, wheels, and smaller items. Why can’t I get an engine and handling firmware upgrade from my ford dealer? Sell me a baseline car and then turn around and sell me an upgrade two years later has compelling improvements in mileage and acceleration?

The point is that someone will do this eventually move to the product model and eliminate the car factory, Toyota, Mercedes Benz, or a new car company. Detroit is in the same situation as the Japanese industry was after WWII with a capital structure that needs to be rebuilt. Japan built new factories because they had no old ones to worry about. In this situation, Detroit is so far gone that they potentially have the advantage in this case if they have the will to move. None of this will happen with the top two layers of current management running these companies.

Charles Williams | Dec 10, 2008 | 11:46PM

Has anyone else noticed that XP Vehicles looks like a total scam? Or at best a B/B- Student project. I'd have given them a D but maybe I watch too much Top Gear.

The main car on the "Products" page is a 3D model of s stretched Smart ForTwo (not even the current model of it). The other 3D models they show are a squeezed Nissan Murano and what looks like a test of the Join & Intersection tools in 3dsMax...

What the American car industry needs is to address quality, and outsourcing the production of cars will only work if there is someone to oversee the quality control. Something that Apple can do because it has relatively simple (and with Moore's Law getting simpler all the time) products, and at the beginning of the comback comparably low volume to other computer makers (Dell & HP).

Plus while the Volt will never be able to live up to 5 years of hype, by the time it goes on sale... the iPod didn't have to be crash tested to save lives and the lives of the people it runs over (in Europe anyway).

Collin | Dec 11, 2008 | 12:53AM

Umm....
Bradblog: How to Save GM in Four Words: 'Steve Jobs as CEO'

http://www.bradblog.com/?p=6737

Mark | Dec 11, 2008 | 9:47AM

When I went to college I was taught Unions were evil. In my senior year I took a required course on labor relations. In it we covered a lot of the early history of unions. There was a time when corporate abuses were terrible and unions became a necessity. It quickly became clear there was a lot of blame on both sides of the labor relations table. Yes there are problems with excessive union contracts and rules. There are just as many, maybe more problems with the management of the Detroit auto industry.

In our class we did a case study on the US steel industry. (This was in the mid-1970's) The steel industry was screaming murder about their union's. Yes they had some work rules that introduced some inefficiencies. With more reasonable rules the steel industry could reduce their labor costs by about 30%. But that wasn't really the issue! Labor accounted for about 10% of the industry's operating costs. The industry could have wiped out the unions and still gone under business. Their factories were terribly inefficient. They used a lot more energy and had a lot more waste than more modern plants overseas. They were spending more on legal fee's, lobbiests, and epa fines than it would cost to clean up their emissions. Recycle? No way! This was an industry clearly stuck in the past, and completely incapable of managing a modern business.

We finished our case study with the observation that many of the USA steel producers would probably go out of business in the next 10 years. This was in the 1970's and that is exactly what happened.

The Detroit-3 are at the same crossroad today. There are many things they need to do, some of them are painfully obvious. I am in favor of a bailout to save the industry. When visiting northern Indiana and Ohio, you get a clear image of what the loss of the steel industry had on the region. Losing the auto-industry will be 10x worse. I do favor clear requirements being placed on the automakers to get their act together.

John | Dec 11, 2008 | 10:37AM

You could buy your car but a month later the price would drop by $100 and then another month later the newer, thinner model would come out...with installed speakers!

If you wanted touchscreen steering then you'd have to give up a chunk of the backseat, for a smaller capacity in the car.

The more you paid, the less you'd be able to actually open the hood and fix it yourself.

ComputerChick | Dec 11, 2008 | 1:15PM

I FEEL LIKE I'VE BEEN TAKING CRAZY PILLS!

The GM Volt is a piece of crap. Its the same car they've been touting for the past 40 years and roll out every election. Doesn't anybody see this or remember?!!! Even the original designer of the EV-1 left and started his own company that touted leaps and bounds in terms of technological improvements despite mysterious death threats upon his family. Bottom line is that the Big3 = Mob mentality. Big, stupid and strong, just like dinosaurs, and where are they now? Extinct.

They are NOT serious about this car, and its performance and weight are dismal. 40 miles? Please, try 240 miles ala Northern California's Telsa or Southern California's Aptera. When it comes to real solutions for consumer cars, look to California.

Steveorevo | Dec 11, 2008 | 3:40PM

> They are NOT serious about this car

Why should they be? Two trips to Washington and Congress rewards their stupidity with $15B. That's your money the smiling politicians have just handed over. They should have got the message in 1973, but they didn't. There's no incentive for them to clean up their act.

Benny | Dec 11, 2008 | 5:22PM

We european have known for ages that the vast majority of US cars are just plain crap, based on technologies from the 50's. The best selling vehicule in the US is the Ford F150 pick up truck!! COME ON! Driving one of those is like skating with metal sheet over jell-o. The US has been sitting on its arse for the last 30 years, and so the demise of its industrial power is just normal, and was predictible. And I wonder how a bunch of obese baseball-capped uneducated workers will come to their sense and reduce their energy consumption habits. The Obama election is positive but I doubt he will be able to steer a sinking boat.

oueb masta | Dec 12, 2008 | 7:47AM

Today, I wrote a blog about Intel's former CEO Andy Groove's suggestion that Intel should invest in battery business to fill the emerging market of electronic cars. I concluded that Detroit may not focus on Capital Hill, they should go to Silicon Valley to find something else. It is in Chinese, because i am living in China. When I am writing about Detroit's Big Three's problem, I think IT industry's history may tell them something. Your post's opinion really touch me, I have the same feeling. Detroit's Big Three are all too lazy to inovate, too shame to face their failure. Jobs do what Woganer cannot do. Jobs is not only a innovator, but also a best saler. As a saler, he know what are customers really care about, and how to drive their demand. But Woganers are doing just as a manager, talking more about strategy but never take well executive. They are now face the biggest chanllenge in history, I support they to fill Charter 11. A collapse may bring them a new life.

ahoo | Dec 12, 2008 | 8:46AM

Steve Jobs understands that product quality is paramount. Quite the opposite of the US car makers. While they were making Hummers and 3 tons SUV, Germans and Japaneses busy getting more kilometers per gas liter. I wonder if the typical american bloke, which considers his country of being a land of endless plenty will ever be willing to give in his "right" to consume as if there's no tomorrow.

joey stalinus | Dec 12, 2008 | 9:22AM

Article is spot on. I'm reminded of several discussions I have had with my Dad about the woeful collapse of the U.S. Railroads...If The Railroads had realized they were in the TRANSPORTATION industry, and not the Rail industry, we might be flying on Union Pacific Airlines right now.

Cameron | Dec 12, 2008 | 11:40AM

Guess what? Chrysler's Jeep division is already outsourcing manufacturing. I was talking to a Kuka robot salesman a few months ago and he said one of the new Jeep products was being mostly build by Kuka robots. Kuka built the plant and leases it to Chrysler. Just Google "kuka robots jeep factory" for some details.

James G | Dec 12, 2008 | 3:31PM

People keep ignoring the 500 pound gorilla in the room that makes it impossible for American manufacturing companies to compete with those of other companies. That 500 pound gorilla is National Universal Health Care. The other 35 top industrialized countries have it, but the US doesn't. It wouldn't be a cure-all, but it would be a hell of a start.

OliverDreams | Dec 12, 2008 | 3:31PM

Can some one tell me why this information is not sent on to the auto industry now. Can no one tell me why they are not smart enough themself to find this info. and put it into play? How could the republicans say no to such a plan, if it was put into the bail out? I have a lot of questions and no answers! If they want to save themselfs, than they should be on line finding these same solutions, just like we all are doing? It was not hard to find this article,nore was it hard to understand the steps that it's talking about! these CEO's, and Top Guns at these auto Industry are suppose to be the smartest we have! were in trouble if that is so!

alberta treaddway | Dec 12, 2008 | 6:47PM

"which was a clear difference between he and Sculley, Spindler, and Amelio"

Please: between _him_ and Sculley...

Tom | Dec 12, 2008 | 7:51PM

BMW & Mercedes both have 5% of the market. What's wrong with being a Mercedes?

CVoS man | Dec 13, 2008 | 4:31AM

I just listen to a radio article about a Chinese mobile battery company has bought 2 car manufacturers, and that wants to apply IT industry skills to become a major player. They are launching an electric car this week and I along with most of the world have never heard of them. Check out http://www.byd.com/tech/F3etech.asp?show=t1&color=a

Nigel | Dec 13, 2008 | 6:55AM

For a few years now, ever since I saw "Who Killed the Electric Car," I've imagined Steve Jobs starting a line of iCars. An Apple produced electric car would seem to play to Jobs' strengths. From the personal computer, to the GUI, to the MP3 player, jobs has consistently taken technology that already existed and found a way to make to workable and popular.

Brian Edgar | Dec 13, 2008 | 10:06AM

duh!

jet lee | Dec 13, 2008 | 2:35PM

As much as the thought of Steve as GM's CEO appeals to me, I don't think it will happen for a couple of reasons.

First, The auto industry is mature. Detroit innovated this market for fifty years, then the japanese took the baton and innovated for forty years, and what's left? it all hinges today on a new storage technology that will supplant the 20 gallon gas tank in your current car. Electrics will no make inroads until a battery or hydrogen tank or fuel cell can store as much energy as cheaply and as compactly as that 20 gallon gas tank full of gas. Every thing else is just minor tweaking of the current technology. And it's more likely that Toshiba or GE or Exide will make that innovation than GM or Toyota.

Second, the government regulation of the industry is such that there is little room for real innovation. Safety standards and CAFE requirements mean that there isn't the ability to be a clean-sheet-of-paper innovator in this space. I can't see Steve trading away his CEO position at Apple to go into this industry with its handcuffs. And never a corporation that takes loans from the Federal government and has to implement Nancy Pelosi and Chris Dodd's vision of what an American automaker has to be. Steve play second fiddle to some Washington bureaucrat? Never.


mac84 | Dec 14, 2008 | 12:47AM

1.) read this article in Slate here and this from Dallas Morning News here.

2.)The UAW is going to find itself severely weakened, perhaps to the point of irrelevancy, in the next three to five years, as the Big Three weaken and or disappear one by one. Wages, salaries, dividends, bonuses, etcetera in auto industry in America will be drastically reduced across the board. Smaller auto companies will continue to compete and flourish.

3.)The number of vehicles with internal combustion engines on the road in next fifteen to seventeen years will be reduced to nearly half. The largest consumers of fuel based petroleum be the airlines and trucking industries. Most consumer owned and operated vehicles will be running on clean energy alternatives. States like California and New York will outlaw combustion engine vehicles for personal use totally, except for hobbyists with special licenses. Most internal combustion vehicles still operating and most gasoline stations will be found in Alaska, in Texas, and in the Deep South (except in Florida).

Kevin Kunreuther | Dec 14, 2008 | 1:01AM

Well there is one big problem with the industry that Apple didn't have. Back in 2000 people needed computers, and sales were going strong. Today fewer and fewer people buy cars and I don't believe this is just a temporary trend. In Japan, many younger people don't buy cars anymore. It's "cool" not to have a car. I for myself don't plan on buying one. It's much cheaper to go per bikecycle or train, even in rural areas of germany.

Christian Berger | Dec 14, 2008 | 2:07AM

Christian Berger comments:Today fewer and fewer people buy cars and I don't believe this is just a temporary trend. In Japan, many younger people don't buy cars anymore. It's "cool" not to have a car. I for myself don't plan on buying one. It's much cheaper to go per bikecycle or train, even in rural areas of germany.

Okay, we are talking about what's happening in the USA, specifically, but I'll grant that in coming years, more people in Europe, Japan and hopefully India, the Far East and possibly Australasia will probably forsake gas guzzlers for personal people movers, i.e. The Segway, smart-bicycles, powered skates, etcetera. If affordable cool "green" personal transports with alternative energy support are offered in next few years during current socio-economic, they may supplant urban and suburban America's love affair with big iron. Until then, if I wanted to peddle these type of chariots, I'd introduce them in more progressive markets in Europe and Far East first, and the maybe a few urban North American cities, i.e. Rio de Janiero, Buenos Aires, San Francisco, Boston, Montreal, etcetera, later

Kevin Kunreuther | Dec 14, 2008 | 6:02AM

Christian Berger comments:Today fewer and fewer people buy cars and I don't believe this is just a temporary trend. In Japan, many younger people don't buy cars anymore. It's "cool" not to have a car. I for myself don't plan on buying one. It's much cheaper to go per bikecycle or train, even in rural areas of germany.

Okay, we are talking about what's happening in the USA, specifically, but I'll grant that in coming years, more people in Europe, Japan and hopefully India, the Far East and possibly Australasia will probably forsake gas guzzlers for personal people movers, i.e. The Segway, smart-bicycles, powered skates, etcetera. If affordable cool "green" personal transports with alternative energy support are offered in next few years during current socio-economic, they may supplant urban and suburban America's love affair with big iron. Until then, if I wanted to peddle these type of chariots, I'd introduce them in more progressive markets in Europe and Far East first, and the maybe a few urban North American cities, i.e. Rio de Janiero, Buenos Aires, San Francisco, Boston, Montreal, etcetera, later

Kevin Kunreuther | Dec 14, 2008 | 6:04AM

Could someone enumerate
the innovations done by US Car manufacturers
(beside changing the styling every year) ?

imho if you remove the bodywork and trim you
can't discern the difference between a 1940
and a 2000 US Car or SmallTruck.

uwe

Uwe | Dec 14, 2008 | 7:10AM

If Steve Jobs ran Detroit the typical US car would look a lot cooler, have a really cool dashboard with heads-up display, the exact same fuel economy and 0-60 performance, and cost 20% more than it does now. Detroit wouldn't tell when, if ever, a new model was coming out. If there was ever a problem with, say, exploding gas tanks, the recall notice would simply tell you to bring the car in with no explanation as to why, etc., etc....

J Reece | Dec 15, 2008 | 5:54PM

ah, john reece, ignorance is bliss, innit?

mat | Dec 16, 2008 | 3:59AM

Whoa! Cringely is late with his (gas) last column.

Kevin Kunreuther | Dec 16, 2008 | 6:41AM

@ Kevin: I was wondering that. I hope he does a last column.

martin@talkingfuture | Dec 16, 2008 | 11:29AM

What,
You mean this is it? No final column?

Thank for all the insight over the years. I have enjoyed reading your posts.
Good luck in whatever you do next.

Scott W | Dec 16, 2008 | 1:58PM

So what do you think would Jobs do, if he is given one of the Auto Cos?

Ujjwal Trivedi | Dec 20, 2008 | 3:55PM


On a hiking trail near where I live (that I won’t identify) in October 2007, I told Steve and his wife that I thought he should run an American auto company. I said, “They need what you have. You can help America.”

They both respectfully laughed. Steve said, “That would be second best.”

I am still trying to figure out what he meant. Maybe he thought I meant he should leave Apple. I didn’t mean that.

Deal with the automaker’s debt so Apple can buy GM.

Rex Dwyer
Palo Alto, CA

Rex Dwyer | Dec 26, 2008 | 4:49AM

Those that can do, those that can't criticize! I wish the Big 3 would go belly-up so all you so-called pundits would shut-up. Your short-sighted, myopic view of the auto business makes me sick. You refuse to put the blame for the auto industry's demise on our Federal government where it rightfully belongs.

I agree our management philosophies used to be quite different from Toyota, but not so much today. Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM. And GM has more plants today leading their respective segments in productivity than any other competitor, foreign or domestic.

Also, if Toyota's is so much smarter, why are losing money for the first time in their 70 year history? Their sales are off 30%. PS: Now that gas prices are down, Toyota is cancelling construction of the Tennessee plant where they were going to build Priuses in the US. They will continue to import them to the US to meet demand. Try doing that with our vehicles into Japan.

Does that sound eerily familiar? When GM came out with the EV1 in 1996, gas was cheaper than bottled water and they couldn't sell them. Who Killed the EV1? The "Consumer" did! And they will do it to the Prius if gas stays cheap.

Foreign manufacturers are supported by our government at the expense of American owned and operated businesses. A great deal of Toyota's success is because the Japanese government has taken specific actions that protect their country's auto industry, both at home and abroad. Their government has manipulated the Yen to keep the price of their products artificially low and they subsidized the development of the Prius to the tune of $100 billion.

What has our government done to help our industry?

1) They opened our markets to foreign competition without any restrictions. As a matter of fact, they subsidized our own destruction. Toyota's plants, along with other transplants, were paid for by US taxpayer dollars through tax abatements, land grants, etc. That's why they came here.
2) They did not prevent American auto companies from being raided by foreign competitors. Daimler bought Chrysler and looted its cash reserves. Which, by the way, helped put Chrysler in their current precarious position. And, Daimler has also been given tax dollars to build a Mercedes plant in the US.
3) They have not forced China to allow GM and other foreign companies operating there to remove the profits they earn in China from China. I wonder how profitable "our foreign friends" would be if we did that here? Wouldn't want to offend any of our "most-favored-nation trading partners", would we? Or am I missing the bigger picture here? American auto companies have to leave their profits in China so our government can borrow Chinese money to finance our deficit, right?

I believe in free trade. I think it is the only way the countries of the world can peacefully co-exist. But it only works when common rules are applied fairly in all countries. Congress is supposed to ensure trade agreements are fair and equitable so everyone can prosper. They have not done their jobs (no pun intended)!

Steve is a bright guy, but he's not a car guy and he knows it. That's why he gave the answer he did.

kolo | Dec 29, 2008 | 9:57AM

If apple made cars they would run on a thimble of vegetable oil for several days, you could leave your car running all day and night w/o wasting energy and wouldn't need to hit the garage door opener because it would to it automatically. If you're car did break down, apple would teleport a tech in dapper clothing out to replace the parts (at a fee) and you could never know the difference. You could install upgraded firmware for less than $100 down the road that would make your car go twice as fast, and add hundreds of new features. You would also have a feature that when connected to a special device would reverse time after a crash then take control and avoid it for you.

MD | Dec 29, 2008 | 5:22PM

Separating design/marketing/sales from manufacturing...isn't that what Fiat's doing with Chrysler? Fiat's offering to do the design work and development, and supply them to Chrysler. They're also gearing up to have their cars manufactured in Chrysler's factories, once they move to the U.S.

Richard | Feb 04, 2009 | 3:16PM

NOOOOO!!! Please tell me this is not your last column. I have read your work here faithfully for years.

Your ideas always give me a completely different perspective from which to see the world, and God knows we need more of that.

If the newsletter idea goes through....count me in for $10.00 a month via Paypal.

Shplad | Feb 11, 2009 | 11:15PM

VERY BAD IDEA !!

If jobs was in charge of a combined Chrysler and GM ..

A car that can only be driven by the person who purchased it.

You can only purchase gas from an approved gas station.

You cannot use gas purchased at the approved gas station in any other vehicle.

Any accessories will have to be purchased from the same company ( just for a while after launch ) and accessories purchased for third party companies will cost almost as much .. as these third party companies have to pay huge fees to make all that proprietary hardware.

no thanks.

I just wonder what their ads would be like ..

From the people that brought you ..

.. computers and devices that you cant open ..

.. mp3 players that need specific software to copy songs to ..

.. the most un-themeable default desktop ..

.. the most expensive Intel based system ( and not the fastest by a long shot ) ..

.. designed a two button mouse and convinced their users that they were not smart enough to use 3 ( this when most mice have more that 3 buttons , have better ergonomics and are functionally better to use ) ..


yikes what a terrible idea putting jobs in charge of one of the most "open" pieces of hardware in the consumer market.

You can swap engines .. braking systems .. turbos .. wheels.. brakes .. just about anything in a car today.

.. if jobs was in charge you would not be able to change the windscreen wipers without him lining his pockets.

The whole point of a car is to be free ..
If jobs were in charge of a combined Chrysler and GM. I would rather buy a shiny new ball and chain. .. really.

deye | Feb 23, 2009 | 4:28PM

VERY BAD IDEA !!

If jobs was in charge of a combined Chrysler and GM ..

A car that can only be driven by the person who purchased it.

You can only purchase gas from an approved gas station.

You cannot use gas purchased at the approved gas station in any other vehicle.

Any accessories will have to be purchased from the same company ( just for a while after launch ) and accessories purchased for third party companies will cost almost as much .. as these third party companies have to pay huge fees to make all that proprietary hardware.

no thanks.

I just wonder what their ads would be like ..

From the people that brought you ..

.. computers and devices that you cant open ..

.. mp3 players that need specific software to copy songs to ..

.. the most un-themeable default desktop ..

.. the most expensive Intel based system ( and not the fastest by a long shot ) ..

.. designed a two button mouse and convinced their users that they were not smart enough to use 3 ( this when most mice have more that 3 buttons , have better ergonomics and are functionally better to use ) ..


yikes what a terrible idea putting jobs in charge of one of the most "open" pieces of hardware in the consumer market.

You can swap engines .. braking systems .. turbos .. wheels.. brakes .. just about anything in a car today.

.. if jobs was in charge you would not be able to change the windscreen wipers without him lining his pockets.

The whole point of a car is to be free ..
If jobs were in charge of a combined Chrysler and GM. I would rather buy a shiny new ball and chain. .. really.

deye | Feb 23, 2009 | 4:29PM

This is the worst idea ever, and precisely why the auto companies should not be discussed by outsiders. And also why apple is inferior to other products with removable batteries, removable media storage, and universal slots for SD cards.

frank | Jun 27, 2009 | 8:30PM

Theoretically sound, but probably impractical. Take Boeing's 787 for example. Boeing clearly has a labor issue that they tried to address (among other things) by contracting out of the majority of their newest jet’s manufacture. End result? Over two years after the roll-out and NOT EVEN FIRST FLIGHT! Lesson: It's not easy or even possible sometimes to outsource entire manufacturing operations. A car is much more problematic due to the volumes, numbers of secondary suppliers and greater possibility for quality control variances that could sink the product and brand. It's one thing when you're assembling a machine with few to no moving parts but a vehicle (or airplane for that matter) is a different matter entirely. Perhaps one day the manufacturing sector will get to that point, but it's been tried with varying degrees of success (I believe Jose De Arriortua had a pet plant project for basic transportation level small car like this about ten years ago) and the business is just not ready to do this on a grand scale. That's another problem -any sane business would try an outsourcing approach gradually before betting the farm, but the unions will scorch earth to prevent a trial and going whole hog is just too risky.

Sigh I’m ranting again… just my $0.02.

jake | Aug 09, 2009 | 9:02PM

I believe if you know to sell and market a product well enough you can work in most industries, Steve couldnt sell cars straight to car buffs with a presntation but his advertising probably could, and some elite car designing staff of course!
He'd need to archive a million technical documents first though so he can access them the way her prefers:
http://www.pearl-scan.co.uk
http://www.4document-scanning.co.uk
http://www.forms-data-capture.co.uk
http://www.microfiche-microfilm-scanning.co.uk

Craig Cartwright | Sep 07, 2009 | 11:45AM

The worst idea ever? Based on what? Because you believe it to be so? And you suggest further that auto companies "should not be discussed by outsiders" ? So as the automakers lose billions and billions of dollars and have to be bailed out the federal government we should just keep out mouths shut because we're outsiders? Ummm, no. I don't think so. And R. Cringely has a well thought out plan AND analysis. He has examples of how and why Steve Job succeeded and how those same successes could be applied to the auto industry. Well done Cringely!!

robert | Sep 20, 2009 | 12:44PM

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