While we wait for the big three bailout vote in Congress today or tomorrow, I thought I would pass along this amusing thought exercise from Robert Cringely:

“That’s where Steve Jobs’ second strength comes into play — identifying important new technologies. He’d look at the car market and conclude a number of things: 1) it’s a no-brainer to embrace dramatic design (no boring cars); 2) performance sells, and; 3) safety and fuel economy are co-equal secondary goals. So Steve’s goal for his car company would be to make a limited line of vehicles that were dramatically styled with visibly different technologies from the competitors and were uniformly 20+ percent safer and 20+ percent more fuel-efficient.

But embracing these ideas requires the companies do something else that Jobs came to embrace with Apple’s products – stop building most of their own cars.

There are two aspects to this possible outsourcing issue. First is the whole concept of car companies as manufacturing their own products. There is plenty of outsourcing of car components. Most companies don’t make their own brakes, for example. Yamaha makes whole engines for Ford. Entire model lines are bought and rebadged from one maker to another. But nobody does it for everything, yet that’s what Steve Jobs would do.

All the U.S. car companies are closing plants, for example, and all are doing so because of overcapacity. But what would happen if just one of those companies — say Chrysler — decided that two years from now it would no longer actually assemble ANY of its own vehicles? 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.

And a good one, frankly, because with a single pen stroke most of the overcapacity would be removed from the U.S. car market…

If a US automaker became like Apple — designing, marketing and selling the cars, rather than building them — what would that look like?

So Chrysler reaches out to contract manufacturers in this scenario and you know those manufacturers would fight for the work and probably give Chrysler a heck of a deal. For current models, for example, Chrysler could probably sell the tooling and maybe even the entire assembly plant for a lot more than they’d get from the real estate alone. But that particular advantage, I’d say, would be unique to the first big player to throw in the production towel.

In this scenario, Chrysler becomes a design, marketing, sales, and service organization. What’s wrong with that? They can change products more often and more completely because of their dramatically lower investment in production capital. They can pit their various suppliers against each other more effectively than could a surviving car manufacturer. It’s what Steve would do.”

Fascinating concept . . .

>

Source:
What if Steve Jobs ran one of the Big Three auto companies?
Robert X. Cringely
PBS, DECEMBER 7, 2008

http://www.pbs.org/cringely/pulpit/2008/pulpit_20081207_005508.html

Category: Bailouts, Technology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

63 Responses to “What if Steve Jobs ran Chrysler?”

  1. JustinTheSkeptic says:

    First, he would get ride of their ugly company symbols, because they project lack of style!

  2. call me ahab says:

    I guess then the ultimate result would be that America becomes a purveyor of things not a maker of things – how do all those good paying manufacturing jobs get in the picture? Oh . . . they don’t- well then I guess I don’t like the idea- we have already gone too far down that road.

  3. ya know, if those RFQs were let out of the bag, into the marketplace, word would quickly filter back, through many voices, to the American People, about the true level of USGov’t culpability in knee-capping our Auto Industry..

    now, with ‘the Bailout’, all’s the better for our D.C. Central Planners, their own TARP, under which they hide anew, aside the best PR, in plain sight..

  4. John Borchers says:

    Getting toward irrational behavior here. Job cuts, pricing cuts, volume cuts and stock are going up. Wrong! Like GLW. I’m getting short it.

  5. bdg123 says:

    Interesting concept if Jobs were CEO as it pertains to listening to the customer and his uncanny ability to deliver what the customer wants. But, not so interesting re the contract outsourcing remarks. It shows a lack of understanding of what value manufacturing delivers. We are led by idiots that don’t appreciate manufacturing as a competitive advantage in both process and technology innovation. Does anyone wonder why Honda and Toyota so closely guard their manufacturing? The American business world has become to financialized and doesn’t actually understand what it takes to run a business anymore. Ford became a dominant superpower because of its manufacturing innovation. That involved paying high wages. Toyota copied that and made it better with Shingo’s work in SMED and quick change. Arbitraging labor has its limits as does the cost and width of the supply chain.

    In other words, the dimwits making the rules in the US have it all wrong. And, time will prove that out.

  6. carmen101 says:

    Cringely (is that his real name?) misses one point, at least in the summary above. The manufacturing of Apple products is offshored to places like China. Last MacBook I bought from the online Apple store resulted in a FedEx tracking number for its shipment that originated in Shanghai.

    There’s no question Apple has excellence in design, innovation and marketing. That is however, a smaller portion of the total picture and if every goods producing company in this country continues using this offshoring model, we end up with a much more reduced middle-class, and eventually less domestic demand for such products. The bet is that the non-domestic demand will grow, but that will only work in a true free-trade scenario, which doesn’t exist, and probably never will. So finally wealth is been sucked away from the USA, and will be a long time before that can be reversed, if at all.

    And on another note, Cringely is quite familiar with Silicon Valley and he should know about the trend among venture capitalists to not only making sure the manufacturing can be outsourced offshore, but that a big part of the design can be too. Venture capitalists are not doing well right now, but that’s another story.

  7. I think this article misses the point. The Jobs analogy is weak and reveals little insight. Cars are not computers. People select computers based on almost purely functional parameters. Most Americans buy vehicles on totally irrational parameters. Just look at any car ad. Cars and trucks are sold to Americans based on sex, prestige, power, speed, etc. Cars and trucks are sold and marketed as personal status symbols first, with actual function a distant second. Detroit has spent the last 25 years trying to convince Americans that buying a small car means they hate their children (who will surely die) and that the only safe and sane vehicle is a Sherman Tank. Untangling all of these weird psychological signals is not going to be easy; and it has nothing to do with Steve Jobs.

  8. Lee_in_DC says:

    Steve Jobs would completely ignore the importance of quality (JD Powers, Consumer Reports). His reputation would immediately go to #$%@ from complete outsourcing.

  9. jrhyno says:

    Well, that’s just crazy. Let’s take for example, this part of the statement:

    “say Chrysler — decided that two years from now it would no longer actually assemble ANY of its own vehicles? Instead they’d put out an RFQ to every company in the world for 300,000 Chrysler Town & Country minivans as an example.”

    Ok, let’s say that I don’t know a whole lot about making cars parts and putting them together. I’ll make the assumption that it’s a whole lot more difficult than, say, putting together a computer or washing machine.

    Is the author of the piece suggesting that some 3rd party would be able to train and recreate some sort of assembly line in no time? Again, I don’t know a lot about putting together a car, but I’m damn sure that I’d want someone who knew what they were doing putting the brake pads in the correct way, perhaps making sure that the steering column worked correctly.

    If you thought quality was bad before (and according to JD Powers, US cars are now the equal to foreign cars in initial quality), you’ve seen nothing yet. Who will be responsible for fixing all of the problems that are bound to crop up?

    Just my thoughts….

  10. jerry says:

    It seems to me that perhaps the most important part of the Mac and other Apple products, the software, is manufactured in the U.S.

  11. jason says:

    @ DW

    “I think this article misses the point. The Jobs analogy is weak and reveals little insight. Cars are not computers. People select computers based on almost purely functional parameters.”

    Purely functional parameters? That is laughable, most people can barely use a computer and wouldn’t know if it were functional or not. I work in the computer field and number one issue with computers is end user related. Mind boggling stupid behavior. Akin to putting sand in your gas tank and wondering why your engine seized.

    I think the analogy works as the Mac is all about the sexy. It doesn’t matter if it works because it makes me look cool and therefore I am cool. It started with artists and designers and trickled on down to teenagers.

    And regarding MP3 players, how many people actually look to see if other brands are functional? Very few, most people simply compare within the iPod models.

  12. Mannwich says:

    @jason: I agree with you. The MAC/I-Phone craze is mostly about the “cool factor”. It’s all about trendiness, form over function for most people, in this country.

  13. DavidB says:

    now let’s really start dreaming:

    What if Steve Jobs ran the US government?

    …or congress

    ….or the Fed

    All right. Dream time is over….back to the nightmare

  14. sbailey says:

    The problem is, Chrysler does a lot better job of manufacturing than it does design and marketing. A better strategy would be to keep the plants and outsource the design.

  15. donna says:

    And then you have to take your car to the fancy store in the mall so the Chrysler Genius can fix it….

  16. Mannwich says:

    And you’d have to mail in your crapped out battery for a new one……..

  17. blazvox says:

    Automobile manufacturing requires enormous up-front investment. One reason the US companies make such crappy cars (and sell them cheaper) is because they save so much squeezing one or two more years out of a given model, or a component. Or by doing a significant revision every 4 years instead of 3.

    The idea you could just issue a RFQ for a whole car is ridiculous.

  18. alexp says:

    I really don’t want to condescend here, because the domestic care companies have been pretty much broken for a while. But the notion of issuing an RFQ for car production is incredibly naive.

    As blazvox says, auto manufacturing requires ENORMOUS up-front investments. Not just factories, but armies of highly educated engineers & research facilities. Hell, the task of building a fleet of million dollar prototypes only to smash them into a wall is more complicated than anything Apple ever does.

    Maybe there’s some value in this idea, but it’s just silly as presented.

  19. Joe S. Pack says:

    Amusing? I’m not laughing.

    Who the hell is going to buy these marvelous toys?
    Maybe we should just out-source every GD thing we do in this country and be done with it.
    There has to be some young, poor, slob in India or China or Pakistan that’s willing to work for $20 a day rating and selling and insuring “financial instruments” so the asshats on wall street can stay home too.

    Meet your new Primary Care Physician “Dr. Wing”. He dont speak english and neither does his staff, so you better learn Taiwanese or Chinese or whatever.

    Un-fricken-believeable.

  20. DL says:

    If you let Chrysler outsource manufacturing, then everyone else would want to do it also.

    Politically, it’s simply out of the question.

  21. Mannwich says:

    @Joe S. Pack: Maybe we can just outsource our government too while we’re at it in the name of “efficiency”.

  22. me says:

    Job’s computers are way overpriced and have a minuscule market share. Chrysler is bankrupt, Nardelli told employees that a year ago. Jobs is NO Iococca and electronic toys made offshore with no life expectancy beyond the 90 day warranty are not complex manufactured products.

  23. danm says:

    And they’ll be made in China?

  24. Purely functional parameters? That is laughable, most people can barely use a computer and wouldn’t know if it were functional or not.

    What?

    People know if a Windows computer is functional or not because half the time it’s not. And speaking of which, Windows has become famous for NOT listening to customers and trying to force customers to buy crap they don’t want or need that works like crap. Hmm … sounds like a Detroit-based industry.

  25. Mannwich says:

    @Douglas Watts: Agreed. I have Vista and it’s laughably horrendous. IE now crashes multiple times a day…….

  26. RW says:

    What bdg123 said: There is no intrinsic barrier between design and manufacturing, supply chain and repair line; innovation and competitive advantage can occur in all and the need to more firmly regulate product is the trump card: A computer crash can cost data but a car crash can cost lives suggesting some control requirements that retail computers don’t have; i.e if you’re going to compare a car to a computer, a military or NASA computer (with a prettier shell) might be a better analogy than an iPod.

    Frankly if Chrysler were ruled by Jobs I would expect a big splash for a few years until people discovered how difficult and/or expensive vehicles were to reliably maintain or the critical injury count took a sudden leap then, between the loss of future business and the lawsuits, I would expect Chrysler to finally be finished for good and other zombie corporations could distract us for awhile.

    Shorter version: When F dropped to a buck and a penney I bought a (pardon the expression) truck load; figure seven-ten years from now the position will either make north of a mil or make interesting wallpaper (shrug).

    I’m sure everyone remembers this item making the rounds in the late 90′s (it was a joke, it didn’t really happen, but like most good jokes it has a ring of truth about it):

    At a recent computer expo (COMDEX), Bill Gates reportedly compared the computer industry with the auto industry and stated: “If GM had kept up with technology like the computer industry has, we would all be driving twenty-five dollar cars that got 1000 mile to the gallon.”

    In response to Bill’s comments, General Motors issued a press release stating, “If GM had developed technology like Microsoft, we would all be driving cars with the following characteristics:

    • For no reason whatsoever your car would crash twice a day.

    • Every time they repainted the lines on the road you would have to buy a new car.

    • Occasionally your car would die on the freeway for no reason, and you would just accept this, restart and drive on.

    • Occasionally, executing a maneuver such as a left turn would cause your car to shut down and refuse to restart. In which case you would have to reinstall the engine.

    • Only one person at a time could use the car, unless you bought ‘Car95′ or ‘CarNT.’ But then you would have to buy more seats.

    • Macintosh would make a car that was powered by the sun, reliable, five times as fast, and twice as easy to drive, but would only run on five percent of the roads.

    • The oil, water temperature, and alternator warning lights would be replaced by a single ‘general car fault’ warning light.

    • New seats would force everyone to have the same size body; the airbag system would say ‘Are you sure?’ before going off.

    • Occasionally for no reason whatsoever, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key, and grabbed hold of the radio antenna.

    • GM would require all car buyers to also purchase a deluxe set of Rand McNally road maps (now a GM subsidiary), even though they neither need them nor want them.

    • Every time GM introduced a new model car, buyers would have to learn how to drive all over again because none of the controls would operate in the same manner as the old car.

    • You’d press the ‘Start’ button to shut off the engine.”

  27. wally says:

    “but I’m damn sure that I’d want someone who knew what they were doing putting the brake pads in the correct way,”

    If the parts are engineered properly, they can’t be assembled ‘wrong’ by some guy on an assembly line. That’s why quality is an engineering issue, not an assembly issue.

  28. I think the buy-it-new-trade-it-in-after-4 years mentality has greatly retarded quality. The Big 3 market their cars as ephemeral things. They assume buyers will trade them in after 3-4 years. The entire business model is based on this assumption. Under this model, it is actually counterproductive to invest resources in making a car that reliably lasts 10-15 years or more. It is much more productive to roll out new models every year with little cosmetic bells and whistles that have no bearing on performance, longevity or economy. Product features like massive horsepower and acceleration (0-60 mph in 7 seconds) are meaningless. Nobody needs to go from 0-60 mph in 7 seconds unless they are in a James Dean movie or a Jan and Dean song. It’s also amazing to me that for all of the computer crap in vehicles today, they do not actually run better than a 1973 Chevy Nova, have little improvement in gas mileage, and are exponentially more expensive to fix. I just look at cars over the last two decades and see engineering and design resources going into the most superficial and meaningless areas and diverted away from deserving areas.The Big 3 had to be forced to install air bags and had to be exposed by NBC News for knowingly selling a car (the Pinto) that turned into a firebomb when hit from behind.

    This bail-out sux.

  29. Mannwich says:

    CNBC and their cast of Wall Street sychophants on bashing the autos again. Please make it stop. I’m no fan of this, or any, bailout, but what happened to even trying to show some even-handedness? These asshats basically cheered the Wall Street bailouts but it’s an “outrage” when the autos (who haven’t nearly ruined our economy, markets and countrY) ask for far less?

  30. w_smith says:

    The analogy is weak. The auto industry differs from the computer industry in significant ways. Most of the components used by Apple and other computer vendors are basically commodities: processors, chip sets, memory, optical drives, power supplies, connectors, etc. There are possibilities relating to the packaging of these components – indeed, Mr. Jobs seems to have a knack for innovative packaging and marketing. However, past attempts to develop marketable cars by marrying up major components bought as off-the-shelf items from third party suppliers have rarely had any success, even if they did attract attention (anyone remember Bricklin or the host of auto manufacturers from the 1920′s and 30′s that are now only remembered by auto enthusiasts?). Alternatively, if one were to outsource the manufacturing of complete vehicles, it would not be very long before the most likely scenario would be the sale of rebadged imported vehicles with only the names hinting at North American content – as is the current case for consumer electronics with names like “RCA” or “Sylvania”.

  31. PrahaPartizan says:

    Cringely clearly doesn’t understand the feedback loops which exist between marketing, engineering and manufacturing in highly engineered products which aren’t being built out of totally outsourced sub-components. What happens to his idea when marketing and engineering have agreed on a design feature and find out two years into a three-year cycle that “no way” will an independent sub-supplier be able to satisfy the feature at any cost. Just forcing a recalcitrant supplier into bankruptcy through onerous contract terms will just mean that you never, ever receive a reply to you RFQ.

    Further, the real whole focus of the auto manufacturers is on their powerplants, as it should for device intended for transportation. Just ask any aircraft maker what happens when their engine suppliers fail to meet delivery requirements for a particular airframe. All hell breaks loose, because the alternative engines either don’t deliver the power needed or aren’t as efficient or require major airframe redesign. We haven’t seen that happen most recently, because the aircraft builders start with the engines and then hang the rest of the airplane on it, which, of course, is precisely what the Detroit 3 have been doing for the last 100 years. Perhaps the bottom line is that auto makers should become the engine/chassis suppliers and let somebody else attach the passenger/cargo compartments to the vehicles.

  32. DavidB says:

    and if Jobs built the cars they would never crash. heh heh

  33. Perhaps the bottom line is that auto makers should become the engine/chassis suppliers and let somebody else attach the passenger/cargo compartments to the vehicles.

    The above more closely follows the Wintel model:

    Intel/AMD =Engine
    Dell et al. = Chassis
    Microsoft = Passenger/Cargo compartment/Hair pulling/Suicidal Tendencies.

    But I don’t see how it offers any production side or customer side benefits.

    Cars/Trucks are very unique creatures. Even drawing analogies from trains or planes can be creaky.

  34. DL says:

    Mannwich @ 12:34

    “CNBC and their cast of Wall Street sycophants [are] on, bashing the autos again”.

    They love bailouts (for banks).

    They hate tax increases.

    I think they need a basic course in eco 101.

  35. Joe S. Pack says:

    @Douglas Watts

    “It’s also amazing to me that for all of the computer crap in vehicles today, they do not actually run better than a 1973 Chevy Nova, have little improvement in gas mileage, and are exponentially more expensive to fix.”

    Really?

    Please re-think your position on this.

    You have obviously never turned a wrench in your life, nor changed your own oil, or have a clue as to things mechanical/electrical.

    Once again, un-fricken-believeable.

  36. zot23 says:

    The funniest part of this is the assumption of any here that Steve Jobs would touch an American car company with a 20 ft pole. Anyone smart enough to save the auto companies is also smart enough to recognize a huge bag of s^&% when it is handed to them and would decline.

    At least one of the big 3 is going under, I would say GMAC is most likely, Ford the least. Unlike Apple, all the auto companies don’t own a single scrap of materials in their factories, everything is mortgaged out to the banks.

  37. Mannwich says:

    DL Says:

    December 10th, 2008 at 12:53 pm
    Mannwich @ 12:34

    “CNBC and their cast of Wall Street sycophants [are] on, bashing the autos again”.

    They love bailouts (for banks).

    They hate tax increases.

    I think they need a basic course in eco 101.

    I think most of them know econ 101 just fine. They just want other people to pay for things, namely their Wall Street bailouts and way of life. That’s how real elitists (in particularly the GOP of the las 28 years) roll…..

  38. Mannwich says:

    Do I need to re-emphasize just how much I HATE (I mean really HATE) Dennis Kneale? What a putz. Is he the Corporate CEO’s self-appointed spokesman or what? He always, I mean ALWAYS sides with them on any issue. It’s pathetic. No wonder why CNBC hired him and keeps him on. Sorry, but I had to get that off my chest.

  39. me says:

    “Dell et al. = Chassis”

    Oh yeah, that’s’t an improvement. You’re kidding right?

  40. Joe S.: You have obviously never turned a wrench in your life, nor changed your own oil, or have a clue as to things mechanical/electrical.

    Wow. You know so much about me. I have owned used cars my whole life and done all the basic repair work on them. First, a 1973 Olds Omega (ie., a Nova) with a 350 V-8, then various used 1980s Toyota Corollas, Camrys and a Honda. I do (and have) changed the oil, replaced shocks, replaced struts, replaced disk and drum brakes, etc. My point is that the onset of computer crap in cars makes it much more difficult for a regular person to repair their own car because of the need for all types of electronic diagnostics etc. etc. For someone like me, of modest means, there is an enormous amount of added value to a car that is designed so that it is simple enough that you can repair it yourself from used parts at the junk yard down the road. The Big 3 almost purposefully designs cars now that can only be diagnosed and fixed by a garage with $1 million in diagnostic equipment.

  41. Hal says:

    let’s go back to the bailout–why do we keep bailing out shareholders who made a bad investment and should lose all their money?

    I can see wanting to keep the company and jobs going–sort of–but why protect investors-anybody in DC ever hear of a risk reward quotient?

    Or should the 535 there be thrown in a bucket (or cell) with the Illinois Gov?

  42. Joe S. Pack says:

    Doug,
    Sorry, I jumped on you. I work in the Automotive design industry and am a bit testy when folks criticize. We may have much in common (I fix my own too) but differ on value.

    Anti-lock brakes ever save you from an accident or personal injury?

    Has a cracked distributor cap stranded you on the road lately?

    How about worn out spark plugs or a broken “V” belt?

    Front wheel drive do anything for traction and control?

    You can keep your 73 Olds, I’ll drive my 97 Buick PA.

  43. hourglass says:

    If Steve Jobs ran Chrysler its cars would be marked “Made in China, Thailand, Korea, Malaysia or Vietnam”
    and 50,000 more Americans would be unemployed.

  44. sherm says:

    this was discussed on digg recently. the comments were rather entertaining.

    http://www.dereenigne.com/img/diggmakesmegigglelikealittlegirl.jpg

    that being said i dont understand the comparison focusing on outsourcing plants. all computer companies do this. heck, if there were a computer ceo i would chose to run a car company it would be want m dell. overpriced limited functionality cars (for most people) exist: smart, mini, tesla…

  45. cctduke says:

    Nowhere in the article does he say manufacturing would have to be outsourced to an overseas contract manufacturer – just to one that can supply cheaply. Due to shipping costs, etc it’s more likely the contract manufacturers would be domestic. Not that either party would want to do this, but Toyota could produce cars for the Big 3 at their US plants and do so more efficiently than Detroit can at their legacy plants with their legacy costs.

    The car companies probably couldn’t get the same kind of savings through contract manufacturers as the consumer electronics guys though have because it takes so long to tool up for each car – co-sourcing probably wouldn’t be an option. Plus, they’d need multiple contract manufacturers willing to pony up huge capital to build or buy plants and they’d each need long, long term supply contracts to be willing to do so. There’s just not as much flexibility in the supply chain as there is in building a PC.

  46. mudpuppy says:

    Historically Chrysler has outourced 70% of their components. This has historically been considered a
    disadvantage. Now it’s a plus.
    Also, chrysler has set agreements with different companies to assemble cars for them. For example, Magna corp would preassemble the front end and ship it to an assembly plant where Magna workers would attach it to a car. Lear would assemble the interior and so. I believe the UAW wasn’t too happy about this.
    And finally, if Steve Jobs had been listening to his customers over the last 15 years he would have been building SUVs. It wasn’t until fuel prices crossed $3.00 that hybrids became popular. Even then they don’t make sense financially. Last month the largest decrease in sales was the Prius, down 41%.
    The bottom line is the American public is fickel. They don’t even think about fuel economy until prices are high.

  47. mikeydoggy says:

    Both Senator Richard Shelby of Alabama and Senator David Vitter of Louisiana are opposed to aiding the Big 3 automakers and they will try to block this legislation. If they succeed it will likely result in another major blow to the U.S. economy.

    One look at the horrendous economic ranking of the states represented by these senators should expose them for the hypocrites and liars that they are.

    Gross State Product

    -Alabama gross state product 25th in the nation
    -Louisiana gross state product 24th in the nation
    -Michigan gross state product is 9th in the nation, even with all the difficulties they are having.

    Per capita earnings

    -Alabama per capita net earnings $20,965 43rd in the nation
    -Louisiana per capita net earnings $22,720 34th in the nation
    -Michigan per capita net earnings $23,204 29th in the nation (even with the problems and layoffs)

    But here’s the real kicker…

    Transfer payments received from the Federal Government (per capita):

    -Alabama: 13th in the nation when it comes to receiving transfer payments per capita
    -Louisiana: 12th in the nation
    -Michigan: 20th in the nation.

    So the residents of Alabama and Louisiana are more on the dole from the Federal Government than the people in Michigan! Outrageous!!!

  48. RonN says:

    Above comments raise a lot of good points, but the key issue is not in the details of what strategy makes sense, but instead whether GM’s Board and exec’s are up to the task of revitalizing a company with a 100 year old business model. Everyone is questioning GM’s CEO who has seen GM’s market share drop by 50% on his watch, but let’s look at the Board. I don’t see a lot of “innovators” there. Let’s look at George Fisher — what’s his record? He took over as Chairman of Motorola in 1990 when it had the largest market share by far of any cell phone manufacturer, only to focus development on the old style analog phones and captive semiconductors. We all know what Nokia did to Mot with Nokia’s digital phones and outsourced model. And the huge Iridium fiasco was heavvily funded on his watch, leading to billions in investment by Mot and partners. He moved on to become CEO and Chm of Kodak in 1994, which has been in a tailspin since before he arrived.

    Anyone see any “innovators” on the board??

  49. ottovbvs says:

    This is one of those media generated totally stupid ideas. Running a car company is an incredibly complex business. Even those with lots of experience can totally fu. Want an example. How about Henry Ford. Founded the modern auto industry but by the early thirties was running his company into the ground.

    The D3′s immediate problem is not gas guzzlers, after all people were lapping them up as recently as three years ago, it’s loss of volume. They’ve lost 40%+ of their volume. Any company that loses 40% of their business is going to be in trouble and this is particularly so in a volume sensitive complex business like cars. If the market was at its natural level of 14-15 million cars, not the peak of 17.5 million, they would have ample cashflow to do the restructuring required and which they have been undertaking for the past two years. The big three notably GM have problems but they are fixable. I find the gay abandoment with which right wing politicians and pundits, not to mention the many automotive experts we have here, wish to throw the auto industry under a bus quite amazing. Can you imagine the German govt standing idly by while VW, Merc and BMW went belly up. I’ve lived, soldiered, and worked in five different countries as well as the US and there are times when I wonder if this is the dumbest society in the world. I really do. A combination of a incredibly fragmented political system that subsists largely on legalized bribery, a populace with the attention span of a gnat, and a chattering pundit class more interested in entertainment than substance is not the perfect mix for dealing with a problem of this complexity.

  50. silverBUG says:

    Isn’t this pretty much Lotus’ business model?

    How’s that working out for them…

  51. auden5 says:

    No one, not even Steve Jobs, would be unable to run Chrysler effectively today. The entire car industry is based on cash-strapped consumers taking loans to buy new cars they don’t need every five years.

    The auto bailout is upsetting because it shows Congress doesn’t fully appreciate how its intervention is similar to Japan’s, which was in a similar situation and which took similar actions, all for naught:

    http://willworkforjustice.blogspot.com/2008/12/auto-bailout-is-unjust.html

  52. jason says:

    More fun:

    If Jobs took over Chrysler:

    You would have to throw the car out when the battery died.

    The DCM (Digital Car Management) would not allow anyone to drive the car but the listed owner. This will be know as “one car, one driver.”

    The Radio would only work when ported to an iPod.

    Oil changes could only be done by certified geniuses are ridiculous rates.

    You could only fill up with Apple branded gas and drive on roads maintained by T-mobile.

    The price would increase 25%

    Simple parts would cost as much as a new car.

    To turn the car on you would have to put the key in the trunk lock (in reference to a personal pet peeve when Mac’s had no eject button for the CD and one was suppose to intuitively know to drag the icon to the trash can).

    For the first twenty years there would only be a left-hand turn signal, no right hand signal. (re: the single button mouse)

    From a true hater of both Winblows and Crapple – but a user of both. I have one of each at my desk.

    jason

  53. Tom K says:

    The problem is the big 3 suck as much as designers, marketers, and salesmen as they do as manufacturers.

    If I was the CEO of GM my design department would do little more than send out RFPs to independent designers and the top design schools…and select the best designs to become part of their product line.

  54. Pat G. says:

    I don’t know about Jobs running it but anyone with half a brain and a heartbeat could do a better job than that brain-dead asshole, Nardelli.

  55. me says:

    ” If they succeed it will likely result in another major blow to the U.S. economy.”

    How so? Cerebus will get their money and the employees will still get fired. No little people win in this deal.

  56. AGG says:

    Aristotle said that you can’t seek happiness because happiness is a byproduct of a life of virtue. Whether you agree or not, perhaps we should look at the car market in a similar light. The profitable sale of cars is a byproduct of good paying jobs in a healthy economy.
    This is not about qualityor overhead in pension costs or the “evil” unions. The foreign auto makers will soon be in deep doodoo as well. But these and many other ideas will be forthcoming from the people with degrees in marketing because they were erroneosly taught that good marketing can generate sales. You need a healthy economic infrastructure for that premise to function and even then it is corroboration, not causation.
    You want a great idea? Here’s a winner for the New York Times:
    If a person agrees to a ten year suscription at $365 a year, the customer gets a new computer, high speed (or dial up if no high speed in area) internet and a printer. Every renewal at ten years brings a new computer. All subscriptions include $400 worth of advertising per year. Business rates are slightly higher. The only catch is that if you want a hard copy, you have to print it out on your own paper. This is a green business model. It provides long term operating funds for the paper and would stabilize the stock prices.
    I know, it’s too practical and customer friendly to appeal to present management. So let them fail.

  57. Mike in Nola says:

    Barry:

    You forgot the part about the cars costing 50% more because of the Jobs’ cachet.

  58. Jojo99 says:

    Steve Jobs is already occupied. I have good design taste (sez me), so hire me as the CEO of Chrysler! I promise to right the ship. And if not, hey, it can’t be any worse than it is now, right? They’re nearly broke now, so there are only 2 ways to go – broke or up :)

  59. AGG says:

    It’s all here if anybody really wants the truth and the solution:
    http://www.depression2.tv/d2/node/747

  60. Micah says:

    Wow… A lot of comments on this subject.

    On the whole I think Cringely misses the point. We are looking at apples and oranges (no pun intended) here. The skills needed do not necessarily translate from one industry to another. Moxy is not a substitute for intelligence. I live in New Mexico and we have recently experienced an aircraft manufacturer (Eclipse Aviation) going under in a horrible, bloody way. The (former) CEO was a software billionaire and didn’t understand the market, the process or even the technology. It is sad, but there are no “Universal Managers” that can fix all problems and even someone like Jobs can fail and if he fails sometime in the future it will be BIG because of the vast sums of money involved.

    Differences do matter.

    On another note: Outsourcing all your manufacturing could easily lead a company like Chrysler into ruin. They will have nothing to really call their own. For awhile it will help their bottom-line but in my opinion they will quickly and completely make themselves irrelevant to their market. (Yes, someone is sure to point out that Chrysler is already irrelevant… Point taken)

    The car industry is not my area of expertise but if they want to succeed it will not be by outsourcing their ability to make cars.

    –Micah

  61. belfiore says:

    The idea of Steve Jobs running Chrysler cuts to the quick of the ills plaguing the American automotive industry – most notably, a decades-long lack of innovation in their products and product development processes.

    The systemic changes required of GM, Chrysler, and Ford will not come overnight. Sinking billions of dollars in support of a dead innovation process will guarantee failure. Making cuts and “leaning” the manufacturing line will not address the fact that the (cash strapped) customers of the future have no incentive to buy a new car unless such a car delivers exceptional value in a way that addresses the customer’s own definition of value.

    Consider the following series of three articles as just one of many blueprints the auto industry needs to consider if it is going to survive. Propping up failed business models, or forcing a politically favored solution without regard to the larger problems that need to be solved will only lead to billions of tax dollars going up in smoke, and even more painful displacement of millions of workers.

    http://andromeda-30.blogspot.com/2008/11/how-your-car-might-re-invent-more-than.html
    http://andromeda-30.blogspot.com/2008/11/car-of-tomorrow-driven-through-triz.html
    http://andromeda-30.blogspot.com/2008/11/park-to-future.html

  62. zero529 says:

    As someone else pointed out, outsourcing manufacturing doesn’t necessarily mean outsourcing it overseas. In fact, if Chrysler got rid of its North American manufactuing arm, those floor workers and managers wouldn’t suddenly disappear — they (and their skills and experience) would still be there. You could essentially have a turnkey contract manufacturing plant, assuming (big assumption) that someone was willing to put up the funds to make it happen.

    Another crazy idea (putting practicality & labor agreements aside for the moment) would be to have competition among the existing manufacturing facilities within the company. No, I know, there’s no way to really make that work, but maybe the idea could lead to something that actually would work.

  63. jpo says:

    BMW already does it. Have a look at http://en.wikipedia.org/wiki/BMW_X3

    The X3 also disappointed some BMW purists by not being assembled at a BMW factory; instead, the car’s production was outsourced to Magna Steyr, based in Graz, Austria. However, Magna Steyr has won numerous awards for quality and has been the highest rated car assembly factory in Europe. It has also manufactured – amongst others – European market Chrysler/Jeep products, the 4-Matic Mercedes E Class derivatives, and even Saab 9-3 convertibles.