Skip to comments.Breakup the Auto Companies
Posted on 12/03/2008 5:43:26 PM PST by kathsua
Monday night (12/01/08) Jay Leno asked Cody Willard of Fox's "Happy Hour" about breaking up the auto companies, then answered himself that it wouldn't be a good idea.
Actually breaking up the auto companies might be a very good idea. The auto companies, like many companies may be too large to manage effectively. The business model of one company manufacturing all aspects of complex products may be outdated.
I don't mean breaking up companies according to car models. Car companies should operate more like companies such as the airplane manufacturers.
For example, Boeing doesn't design and manufacture its own engines and neither should the auto companies. The auto companies should concentrate on designing automobile chassis and installing various components developed by other companies on them. Attempting to design everything substantially increases auto company costs and delays development of new engine technology.
Automobiles should be manufactured more like computer systems with interchangeable components that are designed according to strict standards that insure computability. Companies that concentrate on specific types of technology may have an advantage in development because those developing new equipment don't have to compete for funds with developers of other technology in the company.
Specialized companies have an advantage in that management personnel don't have to understand a wide variety of different unrelated activities. Managers of specialized companies are thus more familiar with the company's needs and are better able to determine whether the company is making progress on achieving its goals.
Turning over development and manufacture of engines to other companies would reduce auto company development costs directly and indirectly. Other companies would be taking all the risks. These companies wouldn't have to pass all their development costs to manufacturers of new cars. In some cases the new engines could be adapted to older cars. They might even be able to adapt their technology to run my old '76 Ford station wagon.
Having other companies develop engines would eliminate duplication of effort by individual auto companies develop their own engines with failure not being an option.
Auto companies wouldn't have to choose between developing electric engines, hybrid engines or some other type of engine. Individual companies would work on one or more types of engine. Some of these companies might fail, but some would succeed.
The gifted individuals who develop new technology often are more effective outside of large organizations. Someone wishing to develop a new engine for an auto company must obtain approval from individuals high in the organization who may have no idea what he is talking about. It may not be practical to develop a revolutionary new auto engine in a garage the way Steve Jobs invented his microcomputer, but a small company would be more likely to take the risk on new technology. A small company may have a better chance of attracting investment capital from venture capitalists because small companies don't have a lot of vice presidents to support.
Large corporations are more inclined to preferring modifications to existing technology which is why the auto companies have been so slow to change engine technology.
The computer revolution that put computers on everyone's desk top began with several small companies inventing their own computers. I learned to operate a microcomputer on a SuperBrain. My first microcomputer was a gray case Osborne 1, the first computer that could be carried around, although not as easily as a modern laptop. Those who remember the early days of microcomputers remember names like the "TRASH-80" ( the popular nickname for Radio Shack' s microcomputer), the Commodore-64 and the Zorba. Major companies like IBM didn't enter the market until later.
The auto companies have had decades to develop better engines. It's time to turn the job over to other companies.
Having different companies develop and produce engines makes perfect sense to me.
Why not let the Japanese have them... fact is these companies are dead and the Japanese don’t want them.
Why would they want them?
I’m starting to think that if a company is “too big to fail,” then it is simply too big. If a corporation is big enough to hold the nation hostage with a threat of “either bail us out or we’ll take the whole economy down with us”, that is a legitimate anti-trust violation. This is especially true with financial sector companies, like Citigroup.
Why not just let the Japanese buy all three of them?
Why would they want them?
I’ll take a Big truck over a gas saving coffin box anyday!
Enjoy backing out of a parking space with that big boy...
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