Being involved with technology orientated business (for the most part), I have always enjoyed the whole idea of embracing change and innovating to discover the next move, the next trend and ultimately, the next source of revenue dollars for those companies.
That being said, I look at the situation that the auto manufacturers in Detroit find themselves in and for the life of me, I cannot figure out why they should be rescued.
It is easy to see why companies such as Toyota, Honda and others are doing well, even building vehicles in the US. They have innovated. They have created technologically advanced vehicles, created cost efficient processes to build them, and have managed quality to provide a consistently high quality product for a reasonable price.
It seems that the culture in "the big 3" has not supported innovation, rather has crushed it [literally in the case of their original electric car, the EV-1] in favor of producing more of the same large, fuel-inefficient vehicles that required cheap fuel to be viable propositions. Now that we no longer have cheap fuel, these products are no longer being purchased, and they leaders of those organizations are now pleading for bridge cash that will cover them while they try and reorganize their business. But therein lies a problem.
That reorganization process will require a huge amount of innovation. Innovation is about culture. The culture of the business has to support, promote and embrace new ideas at the very core of every department and employee. These 3 businesses have not been built around that kind of culture and unfortunately that kind of culture change takes many years to occur, IF it even can.
So this begs the question, why save them?
I say, let them die, it is the natural way of things in business. That void created by their failure will promote more innovation in the auto industry then anything else. New vehicle manufactures will appear and start to develop new, innovative, fuel-efficient vehicles that consumers will want to purchase. Competition between those manufacturers will cause the level and speed of innovation to increase and will also force the manufacturers to develop products that cost a lot less to purchase, maintain and use.
Albeit a painful pill to swallow, letting these 3 dinosaurs die off, will seed a whole new era in the auto industry and create an entirely new set of companies to fill that role. All of this will benefit consumers.
Recent Comments