It's one thing to go global. It's another to let your business decay for the principle.
To some people going global seems to mean that everything must go in lock step.
Somebody in America needs a car? Swell. We'll ask the Germans what they want, then we'll check with the Poles. We've got to make sure it fits the plans in China, and let's not forget the Thais.
If they all agree, we'll have the Australians design it, the Brazilians can build it, and then we'll sell it to the Norwegians.
The only trouble is that all this takes seven years, and by the time it's done, anyone who wanted that car already has it, from some other company.
That's not such a silly story. Let's take a couple of examples from real life. There's the case of Cadillac. A while back when General Motors Corp.'s management decided that Cadillac couldn't have a utility vehicle - maybe the worst product decision of the decade - the folks at Cadillac decided they should have something different, an in-between vehicle. That's not a bad idea.
In normal times the team would get together, design it, find some plant space, and build it. Everyone says they can do things pretty fast. Working full speed it should take about three years. The Germans did it in four and a half and they built a new plant, in a new country, too. Look at the Mercedes M Class.
The Japanese do it. Take a look at the Toyota Lexus RX300 when it comes out next spring. They are in-between vehicles, probably something Cadillac was thinking of.
But GM is global. First you have to get a global platform that everyone can use. And I hear the Australians are going to go to work on that because the Australians, er, know a lot about such things. Sure, I imagine that five or six years from now it might be ready.
You want another example. There's Saturn. Anyone that's been in the American auto business a while, or watched it, knew or should have known that Saturn needed a second vehicle the day after the first Saturn came out.
But nothing could happen until that second vehicle could be tied to a global platform, this one a German chassis. Of course, you would have to lay a plastic body on that German platform designed for sheet metal, and it would probably cost more and take longer than doing a just-for-Saturn platform (time is money). So a three-year job stretches to six.
GM isn't the only company with this sort of problem. Ford Motor Co. thought it could run Europe from Dearborn. At least Ford seems to have come to its senses, and decided to run Europe from Europe. In a few years we'll see what comes of the "global" Escort. Let's hope it comes out better than the $6 billion global Mondeo-Contour program.
There's no reason it should work better; Ford's European designers have never been able to design a car that appealed to Americans; they have trouble designing cars that appeal to Europeans. Hey, don't blame me; I just know how to read market share figures. Still, there's nothing wrong with trying something. But if it doesn't work, the sensible man tries changing the plan. That's what Ford seems to be doing.
Again, there's nothing wrong with common platforms, or common engines. There's nothing wrong with making a plan and sticking to it.
What's wrong is wrecking your own operations when a plan isn't working, when it has some basic flaws, when it causes delays that turn into disaster.
There has been growing concern about the Big Three's loss of market share among car buyers. I've written about this for months. This magazine did a cover story on it last October. In December, BusinessWeek put out a devastatingcover story on the subject.
Well, it's true, but that doesn't mean it can't change. I was speaking to one Big Three source, who said, "I wish you all knew what we have coming." The answer to the foreigners isn't building better Japanese cars. I doubt anyone, even Oldsmobile, can build a better Toyota. It isn't building better German cars. I doubt anyone can build a better Mercedes.
So what to do to win the Baby Boomers as they age, and the Generation Xers, and all the generations to come?
Remember the home market is the key market. More important than China, than Russia, than India, than Thailand. Always defend the home base. Always. Always. Always.
You can't come from behind with just-as-good products. They must be head-turners. Wow, did you see that car! When the New Beetle comes out, I guarantee you it will turn every head (whether VW has the dealer force to sell them is something else). No more
b-o-r-i-n-g cars. Build what made us famous: Detroit iron. Detroit daring.
Engines. Golly, we have fallen behind in engines. They are the heart of the car. Spend the money and build the finest, smoothest, most powerful and fuel-efficient engines anywhere. What difference does it make if you connect all the dealers in Los Angeles or Tulsa if the cars suck?
Technology. We can't sell old technology to the generation that must have the latest software and the latest computers. Would someone tell me why GM's Delphi Automotive makes a five-speed automatic but its U.S. car divisions don't buy it?
Remember the middle of the road is for road kill. Make cars that somebody gets passionate about. Better to have something that 5% of 15 million buyers must have even if the other 95% hate it.
Fast. Faster. Fastest.
And don't quit. Lee Iacocca never quit. Like him or hate him, he never quit. Never Never Never quit.
