After reading my colleague John O'Leary's blog about his Shanghai experience, I was struck by the contrasts to what I see from my viewpoint here in the rust belt of the great American Midwest. John saw bright lights and energy! I drove past an empty factory with a sole security light protecting an empty parking lot. Ford announced another restructuring plan—closing ten facilities and eliminating thirty thousand jobs. Add that to the previously announced plans at GM to close nine facilities and eliminate another thirty thousand jobs and you can almost feel the life breath leaving these once proud companies. It is dark and cold here in Michigan this morning. No lights, no energy ...
I will leave it to my more well-read friends to argue the macroeconomic reasons for the sorry state of our auto industry, and offer instead some cut the crap observations:
1) We may have invented capitalism, but we took our eye off the ball. Perhaps it is our complacency, but the truth of the matter is that we are being outworked from the boardroom to the factory floor. In my travels overseas, I have seen a hunger for success far greater than what I see at home. If your counterpart anywhere in the world is willing to work harder then you, they win, you lose. This applies whether you are a CEO or a pipe-fitter.
2) GM is restructuring their executive team, bringing in European talent to save the day. Ford did that. DaimlerChrysler did that. U.S. business schools and grads take note. Where's the homegrown talent? If you can pull your eyes away from your spreadsheets, you might be able to see what we are missing.
3) Ford wants to attract younger buyers. Here's a big clue ... old designers can't design for young taste. Unless talent and performance starts meaning more than seniority and entitlement, it isn't going to work. Put a 25 year old in charge of design. And make it a woman.
4) Throttle back on the cost-cutting mentality. I drive a U.S. nameplate vehicle. Mechanically, it's great. Design ain't bad. But the radio quit, the rear window washer failed, and the latch on the glove box doesn't hold it closed. I am sure they were fashioned with the lowest cost components. Cost does not equal value ... and low cost parts decrease brand equity for a very long time.
5) And suck it up. No one is doing this to you. It is a fate you have created for yourself. While the big three are closing facilities, Toyota is building U.S. capacity with new factories. Apparently, you can make money, and lots of it, building vehicles here in the U.S.
There, got that off my chest ... going to go turn up the heat, put a couple of lights on, and work harder.
Before blogging became all the rage, Tom was posting book reviews and Observations (essentially early blog posts) to this site. You can find the archives below.
What we're talking about
on the front page.