For us to be comfortable with our tax dollars being spent on a bailout, the plan has to include a transformation of the car industry to be competitive. This is not a new thought, and there are four fundamental principles that apply across all industries:
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1. Company leadership must exhibit ambition, clear vision and leadership within the company, and also to suppliers, customers and investors.
2. The Board must direct management to investigate different approaches to business that will create new value to the company; new business models for example.
3. There must be a relentless effort between management and the work force to grow and sustain leading edge capabilities and human resources focused on the future requirements of the industry.
4. Management must think innovatively and develop a portfolio and a rich pipeline of exciting products (models) which are differentiated and highly competitive in the chosen focused markets. These must be quality products that are delivered in a timely fashion.
Our German and Japanese competitors adopted the above principles and are dramatically more successful than our Detroit friends. This suggests that the Big Three CEO’s road map needs to be developed around all four fundamental principles or face the same destination as their British allies. We hope that Rick Wagoner and friends will pay some attention to the clarity that these thoughts bring.
Too many of the present approaches to the Detroit problem are short term and will not resolve the lack of competitiveness. What we would like to suggest is that the companies themselves, in or out of bankruptcy, address principles 1 and 2 immediately utilizing accomplished and innovative consultants that will challenge traditional and tired thinking.
Principles 3 and 4 are the longer term approach that builds a portfolio of rich and innovative products, and the development of the future capabilities and human resources to ensure the sustainability of the industry. Essentially to provide a firm basis for success, Detroit’s plan must answer the question for the car industry of “how can we win against the competition?”
Again, if we look at the competition we find that in both Germany and Japan that there is national, state and local policy towards the development of trained automotive workers and technologists, and also additional funding programs oriented towards the development of the automotive innovations of the future at higher education and learning facilities. The result then is that the national or federal governments invest in a coordinated fashion with private industry in human resource capabilities for the future, and have stimulated the development of fundamental innovation in the transportation industry. This seems like a reasonable approach for the long term sustainability of an industry, especially if the industry is a national priority.
So our suggestion is that American auto makers adopt similar programs to these exercised by the competition (by the way they have been in place since the early 1960s, if you haven’t noticed)…but let’s not stop there. We must develop a public/private stakeholder partnership, including the universities and higher education; national, state and local government; the automotive industry producers, suppliers and customers; investors and innovators to steer this program to the next level.
It is then at this next level of innovation, with the creation and renewal of capabilities and coordination with all stakeholders, that we will be able to win again in the automotive competition.
