Wednesday, July 2, 2008

No sympathy for the car companies.

I reading this post and it occurs to me that all of Detroit's problem rest at their own feet. We all saw this coming.

It's clear that with just a little planning, Ford and the others would have been able to shift factory production from SUVs to smaller, more compact and efficient vehicles. And remember, these are multinational companies, and in those foreign already sell models that would more than meet the market demand for more economic vehicles. European standards for emissions and crash worthiness are far more stringent than in this country, and everybody with the exception of the British and the Irish drive on the left, removing *any* need for reengineering in the drivetrain.

The real problem is that the big Three got greedy, trying to maximize the per unit revenue on their automobiles. They spent their time complaining about emissions and efficiency standards instead of paying attention to the market, identifying opportunities and thinking longterm. Toyota did all that, and is now poised to dominate the market.

The solution for Detroit is clear:
  1. Accelerate R&D, and segment vehicle design into stages. It costs a lot to put a new car into production, but much less to do the design work. It's clear that making sure they had some "dry powder" ready to go would have benefitted them
  2. Invest in supercomputing technologies, and do more in the way of design automation and exploratory design. This speaks to 1) but Detroit's designs are *stale*. Virtual prototyping is an imperative.
  3. Update Computer Aided Design methodologies.
  4. Engineer factories to be capable of flexible. multi-model manufacturing. In particular, allow for efficient short-run builds. Do this, and if a model becomes popular, it should be straightforward to scale up production.
  5. Spend more on engine and powertrain R&D, and focus on efficiency.
  6. Bring the design to market cycle down to 18 months or less.

Detroit complains about the unions, but in truth, management's relationship with the unions has always been feudal and adversarial. The Unions have two primary goals: preserve jobs and preserve wages and benefits, in that order. Provided management doesn't rub the unions noses in the shit, as they have in the past, by awarding themselves large bonuses while laying off production line workers, they should be able to come to a mutually satisfactory agreement.

Relative equality of management and production line workers, more than TQM, Taguchi methods or the like, has always been central, imho, to Japan's superiority in the automobile business. It's clear that in Japan, decisions are made to benefit the company as a whole, and it is considered highly dishonorable for one group to benefit from the misfortune of another. Somehow, Amercan management doesn't seem to have that ethical clarity, and it has cost those companies dearly.

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