Designing a Car Company

Today's top story on MSNBC was about slumping car sales.
Automakers' sales slump continued in Feb.

As we all know by now automakers are in trouble. American auto makers are in BIG trouble. I have to admit, I have a soft spot for the US auto industry. For awhile I was pretty certain I would end up in a career at one of the Big 3. I never did. I did live in southeast Michigan for awhile though. And I've seen first hand how generations of families and entire towns have their livelihood dependent upon the auto giants.

The first car I ever purchased on my own was from a Japanese manufacturer. I believe it will be the last time I ever do that. After seeing the real people impacted by the US auto industry I feel deeply compelled to support them. Buy American. I understand that many cars from foreign manufacturers are actually built in the United States. And that many of their parts are made here. It doesn't change the fact that at the end of the day those profits are put back into the coffers of companies very very far away from my hometown. Companies whose interest in the financial health of the U.S. goes only as deep as how it will impact their bottom lines.

I am torn on the fate of the Big 3. They have made egregious errors in their product and organizational structures. They have had quality issues. And they have allowed their prices to be dictated by the demands of the unions (more on them another day) rather than allowing supply and demand to dictate pricing. In the most conservative part of my being I say let the market do what it will. If that means a collapse of the industry as it exists today with new companies emerging then so be it.
But there is that other part of me. The emotional part that would hate to see an end to such a symbol of our American history. America is a nation of drivers and roads and cars. To lose the brands we have come to know and love would leave a hollow feeling.

Here is the plan I would implement if I were the CEO of General Motors.
First, I would renegotiate union contracts to more accurately reflect today's business environment. That means lots of emphasis on self-managed retirement plans (401k) and a streamlined health system. Pensions would be gone. Mandatory educational seminars on maximizing investments and strategic saving for retirement would be implemented.
Ultimately I'd love to see the unions phased out. But that may not be a reality so you work within the constraints you need to.

I would pare down the cars manufactured to just 6.
* Circle of Life Coupe/Convertible/Sedan - small, practical and, reasonably priced. Something you could buy for your teen or your retiree mom without breaking the bank. Or a convertible version for the young single who can't afford the 'vette.
target customer: teens, retirees, young singles
inspiration - Chevy Cobalt, Pontiac G6
* Mid-Life Sedan - design must be cool enough to attract status-conscious dads and young professionals and the features must be practical enough for the mom with 2 kids
target customer: young professionals, small families
inspiration - Chevy Malibu
* Hard-workin' Truck, maybe two of these, one smaller and one larger
target customer: small business owners and large company fleets
inspiration - GMC Sierra 1500, Ford F-150
* Hip SUV - fuel-efficient, big enough to haul your gear and your friends, small enough to fit in your garage
target customer: moms who refuse the mini-van, outdoorsy young men, well, all men really
inspiration - GMC Envoy
* Comfort Cruising Sedan - something big and cushy
target customer - empty-nester who has done well with their investments
inspiration - Cadillac Deville
* Classic American Sports Car - The Corvette.
target customer - 50 year old men

I'm not saying I would make cars (plural) in each of these categories. I'm saying I would make a car in each of these categories. I would take all the best features of the current line. I would take my best engineers and best mechanics and technicians. And we would build 6 cars of unprecedented quality. Everyone from the first designer to the last bolt turner would be held accountable for the quality of the product. And everyone would be rewarded.

For each car the base package would be what more reasonable consumers want and are willing to pay for. We'd offer 2 or 3 upgrade packages for each.

I would cut management to only the most necessary and relevant levels for each of the 6 divisions. That might just mean on executive manager reporting up to the CEO, a small finance team and a lot of first-line managers overseeing each group (designers, engineers, manufacturing). Salaries would be based on what we could afford, not what we wish we could afford.

There are some pitfalls. I understand this plan would probably mean a lot of layoffs in the short-term. But the current bailout is simply delaying that inevitable result. And with the bailout, when the layoffs finally do hit hardest GM will be in no better position than they are today because they will not have a different plan. They will still be trying to implement today's plan with fewer workers.

Limited choice for consumers would also be an issue. But only for a little while. I truly believe that consumers would rather have one GREAT option than 10 options none of which quite meet their needs and which have questionable quality and staying power.

Once we were back on line making great cars and good prices we would start to think about expanding our offerings. It's only natural. Henry Ford started with just the Model-T. Ford now has 50 offerings including their Volvo and Mazda Brands. And General Motors offers a whopping 95 vehicles! I'm sure Mr. Ford never envisioned that. So it's okay to think about expanding. But we would need to have limits. Maybe our agreement is to never offer more than 3 cars (a low, mid, high level) car in each category. Or at a minimum we'd agree to not offer the SAME VEHICLE under different brand names as they have been known to do.

So, Mr. Wagoner, if by some strange twist of fate you are reading this, please consider this idea. It could very well save the name General Motors so that my grandchildren don't talk about a Chevy they way I remember the Edsel.

And for the rest of, if you are thinking about an new car, please consider buying American.