Sunday, November 30, 2008

Transportation Renaissance Won't Happen With Detroit Bailout

This morning I begin my Sunday morning like most other mornings by reading the New York Times and scanning the news. Today I read about the worsening US auto industry illustrated by a dealer in Quincy Florida and his struggle to stay open.Bruce Thomas has spent his life working and building his dealership to the point where he is the second largest employer in his hometown and where he has over the years support numerous charitable organizations. The future looks bleak for Bruce, the mayor of Quincy is worried about the impact of Bruce going out of business and people are scratching their heads wondering what happened.



For those of us who have been unhappy with the Big 3 since the oil embargo of the 70's (yes I am that old!), this downturn is hardly unexpected. It reminds me of the phrase "what do you do when you are climbing the ladder of success only to find out you are on the wrong wall?" This is where we find ourselves, and I have to admit that we told you so. So, now that I have a milisecond of satisfaction based on years of protest against Detroit, we are at a crossroads. What is the future for us? What path we take? Have we really woken up from this slumber, or are we still rubbing our eyes thinking about staying in the consensus trance?



I remember reading John Delorean's book "On a Clear Day You Can See Detroit" . This book was interesting reading in the late 1970's as it described an insiders view of General Motors. Unfortunately John's credibility took a big hit when he later failed in his car company building in Ireland, however, my memory of his book helped me understand the problems lurking in GM and in general the automotive industry.



One point that remains with me until this day is just how insular the top decision makers were at GM. John pointed out the president of GM surrounded himself with VP's who would never question the top dog, and in fact were "yes men." The Delorean book well illustrates how this management style and culture prevented GM from innovating and really adequately understanding the business environment in which they operated.
My gosh, does that ever apply today? It seems that nothing has changed since then.



Of course one could successfully argue that Detroit has made great strides in improving safety and quality because of Japanese competition. The dirty little secret here is that American management academic W. Edwards Deming taught the Japanese how to succeed after being ignored by US business interests after World War II. Perhaps that is where our current problem really started.



It seems that for the past several decades our auto manufacturers have built auto with short term profits in mind. In America, ain't it hard looking past the next quarter? Deming saw this mindset as poison for innovation and saw it as a deadly sin. We have become a victim of our own making it seems.



So now Detroit wants a bailout. My suggest is that we stop paying for the ladder upon which we climb. We must climb down and invest our dwindling resources and find a new wall upon which to climb. There are some big questions we must address. Will a system based upon individual transportation vehicles solve our current transportation and environmental problems? How can we most efficiently spend very limited public funds? What expenditure of public and/or private funds will provide the greatest job creation and employment?



As we look to a change with our new president there will be continued pressures to maintain the Detroit culture from the past. Will there be meaningful change requiring a serious reality check or will we continue to prop up an aging, outdated industry? If ever there was an opportunity for American to come to grips with our future it is now. Which ladder will Obama and Congress have us climb?