The Automobile Industry

Saturday, 22 November 2008 at 5:00 am Pacific USA Time.

I've been thinking about the automobile industry, especially since my father-in-law visited from Ireland a few weeks ago. I was telling him how AWESOME it was that my 2007 Toyota 4Runner SR5 (V6) gets 24 miles to the gallon, even around town. He looked at me like I had 6 heads. Evidently, in Ireland, few cars get UNDER 40 mpg. Here in the US? Nearly zero roadworthy vehicles get 40 mpg or over.

And before that, I had watched "Who Killed The Electric Car," which will make a tree-hugger want to burn a Ford plant down.

Guess what.

  • If I resist innovation,
  • If I try to stay the same,
  • If I try to force my clients to just keep buying the same thing,
  • If I resist my clients' desires to expand,
  • If my greatest innovation over the last 10 years seems to be that my car plays MP3 CDs,
  • If I squish new technologies,

I should NOT be surprised when my business starts failing. Stagnation and refusal to innovate or evolve basically NEVER works.

Even Coca-Cola doesn't rest on their popularity and sales. They are always coming out with new drinks they hope you will drink. Wendy's comes out with new things you could be eating. Your cable company has products and services they didn't have 2 years ago.

So what to do with the auto industry? I like what Seth Godin said in his blog post. Basically, I'm not for spending that money bailing out private companies who made bad business decisions and didn't innovate. Since the 1970s, when oil prices became the type of thing everyday Americans thought about, we have needed better cars… more efficient, alternative fuel sources, smaller and lighter cars that are very safe. What did we get? Smaller cars for a few minutes, but not known for their safety. Then SUVs and bigger and bigger things… like pick from three models of Hummer for your 3-mile trip to Walgreens.

Some people need an SUV or pickup truck for work or moving things around. I'm not going to take that away from you. But I think families should have a second car that is aimed at fuel efficiency. So instead of going out to dinner in your Ford F350, surely there is something out there that'll get you to and from dinner requiring less gas and causing less pollution. The person who drives to work or the train station, and the car stays there all day? That could be a Toyota Yaris. It could be something small with good gas mileage. It could be a bicycle. :)

I guess I feel Darwinian about the auto makers. They have been doing the wrong thing for decades. Just watch "Who Killed The Electric Car," and you will not want a bailout for them. I'm not for the jobs that will be lost, but I believe that forward-thinking companies will create new jobs in 2009. No matter which candidate you wanted to win, change has to come next year. New jobs have to be created.

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Categories: Just An Observation

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