• Dec 2, 2008
We'll be hearing more about the Detroit 3 in the mainstream media this week as their homework entitled "What I Would Do With My Share of $25 Billion in Government Loans" gets turned in to Congress. While Detroit deserves much of the ribbing that's on the way, it irks our ears every time we read an op-ed piece from folks who flat-out do not know what the Hell they're talking about. Take Karen Wagner, whose opinion letter was published by the Chicago Tribune in which she claims that Ford should cancel launching the 2010 Mustang in order to receive federal loans. There are not enough appendages on the human body to count the reasons why that is a stupid idea, let alone an entirely unrealistic one. In her reasoning, she seems to believe that selling fuel efficient vehicles would equal a healthy, profitable automaker and therefore save millions of jobs, while not realizing that the Mustang has done infinitely more to help Ford's bottom line than the Escape Hybrid.
Then there's entrepreneur extraordinaire Michael Arrington, co-editor of Tech Crunch, who claims in a recent op-ed piece that what works for the tech industry will work for autos, too. His idea is that auto companies should outsource all production of their vehicles to third-party companies just like Apple does with the iPod. He also criticizes the auto industry for its business model of vertical integration, questioning why there isn't an Intel of engine manufacturers that sells to all the automakers. Well, guess what Mike, the Apple model doesn't work for everybody (it didn't work for Apple in the early '90s) and there are a tens of thousands more parts in a car than an iPod that might make outsourcing their production to the lowest bidder a logistical nightmare.

While it's easy to dog on the domestics for the sorry shape in which they find themselves, don't listen to every Karen and Michael out there who voice their ill-informed opinions on how things ought to be. There are such a myriad of factors that have contributed to the current state of the Detroit 3, some of which is their fault and some (like bad mortgages ruining the credit market) which aren't, that there just is no silver bullet fix beyond continuing to lower costs and building better products.

[Source: Chicago Tribune, Tech Crunch]


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  • 72 Comments
      • 6 Years Ago
      Late to the party but maybe we should start thinking about banning 90% of the dumb-asses posting comments at AutoBlog - they're just as guilty of being stupid.
        • 6 Years Ago
        DJ,

        I fully agree, let's ban all the retarded comments.

        Here's one we could start with:

        "DJ @ Dec 3rd 2008 1:24PM
        Late to the party but maybe we should start thinking about banning 90% of the dumb-asses posting comments at AutoBlog - they're just as guilty of being stupid."
      • 6 Years Ago
      "the Apple model doesn't work for everybody (it didn't work for Apple in the early '90s)"

      Don't mix Apples and Oranges. That wasn't outsourcing, that was licensing. Apple allowed Umax and others to make Mac clones.

      Outsourcing is when Chryslers were made in Magna Steyr factory in Austria, EU, or when Finland's Valmet makes cars for everybody else.

      If there were bucketloads of Magna badged Chryslers and Valmet bafged Boxters, that would be licensing, that would be the equivalent of what Apple did in the 80s.

      However, Apple now outsource production to Asian manufacturers but keeps the R&D in-house. Detroit has more problems in-house, outsourcing production wouldn't be very helpful.
        • 6 Years Ago
        sorry for the typos :-)
      • 6 Years Ago
      Good point!

      It's like building hybrids to mitigate waste of fuel instead of driving more conscientiously.
        • 6 Years Ago
        Agreed! The guys on the hill can't manage their own finances, and they're giving the automakers advice? Kill the Mustang?
        ..the situation is desparate, not hopeless, folks!

        A quote from DetNews

        "Later today, Ford will unveil its two-mode hybrid versions of the Fusion and Milan. They will correctly claim that Ford is the first American company to build a true hybrid car. (General Motors Corp. offers a "hybrid" Saturn Aura and Chevrolet Malibu, but they do not ever drive by electric-only power. Start/stop technology is not a hybrid in my book.)

        Ford executives rightly will tout the hybrids' high mileage, with first estimates pointing to this pair hitting 38 miles per gallon in city driving, besting the Camry hybrid by 5 mpg.

        Give Ford some credit. The automaker has roughly 200 pending patents on this new hybrid system it developed. This is not a rehashed or borrowed system from Toyota as so many other people seem to think. It's true red, white and blue American ingenuity."

        With stuff like this rolling down the pike, I say give these guys a chance!

        • 6 Years Ago
        *It's like building hybrids to mitigate waste of fuel instead of driving more conscientiously.*

        Which is like relying on abstinence programs to stop the spread of STDs.
        • 6 Years Ago
        Of Apples and Automobiles

        http://www.motorobilia.com/2008/11/of-apples-and-automobiles.html

        By the standards on which people judge American cars, Apple is a failure.
        • 6 Years Ago
        "Take Karen Wagner, whose opinion letter was published by the Chicago Tribune in which she claims that Ford should cancel launching the 2010 Mustang in order to receive federal loans."

        Wow, i'm against Mustangs, but this is too much. I think Ford needs to go back to the drawing board, not entirely scrap it. I think Ford could've done better than ripping off the 60's.

        What she should've pointed out is that why didn't Ford go and grab their Euro-Spec stuff and adapt it here? Or at least have contingency plans just in case SUV's/Trucks became bust?

        • 6 Years Ago
        Thank you Neff! You're the shit.

        I'm a software manager, and the Tech Crunch guy obviously doesn't even know enough about his own industry. The reason why IT works well via outsourcing is because its form is abstract, unlike a car, which has a physical form. Abstract parts can link together easily because they only need to fit together at interfaces. Mechanical parts have to work together with each other on 100% of their form -- not just the interfaces. Thus, mechanical engineering needs to be designed holistically because changing a single part can affect the entire product. That makes a vertical company model be the only sane answer.
      • 6 Years Ago
      Three cheers for this post! I completely agree!

      "Green" cars does not equal profitable automakers, and if anyone is in doubt, look at how many Prius' Toyota sells in a year compared to how many full size cars, trucks, and SUV's they sell. Enough said.
      • 6 Years Ago
      Amen!
      • 6 Years Ago
      How about Bob Corker and Rep Shelby of Alabama,
      home of Nissan,Honda,Hyundei,and countless suppliers these 2 Bozos could not manage to get their heads out of their @#s. Check the sales figures,,nobody's buying,,,OH buy the way where are the business plans and congressional hearings for Hank"the Crank" Paulsens buddies at AIG,Citibank,Lehman Brothers,and the rest of the thieves at the "FINANCIAL CASINO" How about it WALL STREET,,,hedge funds,,derivatives,,futures markets,,,lets see some products,,not schemes,,real products,,like Detroit,,Marysville,Georgetown, and all autoworkers make,,Union or non,,
      • 6 Years Ago
      If tax paying citizens money is involved, then why can't they share their opinion?! :)
      • 6 Years Ago
      In all fairness to Ford and the Mustang, Ford IS planning to roll out their EcoBoost engines in the lineup to increase efficiency. Perhaps Miss Wagner should learn to research before sharing an opinion...
      • 6 Years Ago
      Ummm... Jeff - Neff
      • 6 Years Ago
      While I agree with this op-ed post people do need to understand that when you ask to borrow money the person making the loan (in this case the US taxpayer) has every right to ask questions and put conditions on it.

      The problem is none of the questions or conditions have been put on the banks, shadow banks (Goldman, JP Morgan, etc.), or AIG. We just coughed up the money and then hoped for the best.

      It's now a sport to go after the auto makers wanting money because everyone seems to be an expert on autos, but no one seems to know anything about banking.
      • 6 Years Ago
      I agree fully with this opinion piece. Thanks for posting.
        • 6 Years Ago
        Are you kidding me, Mustang is a fugly car just like most of the line up of all these companies. Chevy has some decent ones with the Camero and Malibu.

        But they have a looong way to go.

        They should skip the hybrids and go straight to hydrogen that will make them be no.1 again. BMW already has a Combustion Hydrogen engine so you still retain the feeling of a normal car. Instead of the volt which will be like driving a R/C car.

        But the styling of the VOLT is amazing so that is def a good direction Chevy is going.
      • 6 Years Ago
      ...and then there's someone called Witz over at Autoblog Green...
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