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What to do about Detroit

I was in Detroit last week... I have family there. I also drive a car. And I would rather that the world doesn't melt and the economy thrive. So I'm uniquely qualified to weigh in on the automobile industry.

Not only should Congress encourage/facilitate the organized bankruptcy of the Big Three, but it should also make it easy for them to be replaced by 500 new car companies.

Or perhaps a thousand.

That's how many car companies there were 90 years ago.

That's right, when all the innovation hit the car industry, there were thousands of car companies, with hundreds running at any one time. From Wikipedia:

Throughout this era, development of automotive technology was rapid, due in part to a huge number (hundreds) of small manufacturers all competing to gain the world's attention. Key developments included electric ignition (by Robert Bosch, 1903), independent suspension, and four-wheel brakes (by the Arrol-Johnston Company of Scotland in 1909).[16] Leaf springs were widely used for suspension, though many other systems were still in use, with angle steel taking over from armored wood as the frame material of choice. Transmissions and throttle controls were widely adopted, allowing a variety of cruising speeds, though vehicles generally still had discrete speed settings rather than the infinitely variable system familiar in cars of later eras.

Between 1907 and 1912, the high-wheel motor buggy (resembling the horse buggy of before 1900) was in its heyday, with over seventy-five makers including Holsman (Chicago), IHC (Chicago), and Sears (which sold via catalog); the high-wheeler would be killed by the Model T.

Back in its heyday, Ford Motor made every single part of its cars, including raising the sheep that grew the wool that made the fabric that upholstered the seats. That's not true any more. Now, suppliers make just about every part. We need those suppliers, and we need them to stay healthy.

What we don't need are giant companies with limited choice, confused priorities, private jets and a bully's attitude.

I'd spend a billion dollars to make the creation of a car company turnkey. Make it easy to get all the safety and regulatory approvals... as easy to start a car company as it is to start a web company. Use the bankruptcy to wipe out the hated, legacy marketing portion of the industry: the dealers.

We'd end up with a rational number of "car stores" in every city that sold lots of brands. We'd have super cheap cars and super efficient cars and super weird cars. There'd be an orgy of innovation, and from that, a whole new energy and approach would evolve. Betcha.

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Listed below are links to weblogs that reference What to do about Detroit:

» Steve Jobs, the iCar, Barack Obama, and JohnDoerr from SmoothSpan Blog
How do we fix companies like GM that have failed to innovate and are dying?  We cant really afford to let them die, there are too many jobs at stake and it will take to long to replace them starting from scratch.  Fred Wilson says the answer i... [Read More]

» The answer? "Bailout" Honda, Toyota and BMW. from makehope
Uh Huh that's right. Instead of spending $25,000,000,000 bailing out the big mediocre three why not invest in Toyota, Honda and/or BMW! All three have BIG plants in the US employing thousands of Americans for gosh sake! (BMW has a... [Read More]

» Supporting the US Auto Industry from Quicken Loans Blog - THE DIFF
Should the US Gov bail out the domestic auto industry? What's your opinion on this touchy and very important issue? [Read More]

» Remove the incentive forstupidity from The Learning Curve
Seth asks, What to do about Detroit,and he give his thoughful suggestions. My two cents is for the SEC to prohibit any NYSE-traded company to base executive compensation or bonuses upon current year profits or current stock prices. If the... [Read More]

» Remove the incentive forstupidity from The Learning Curve
Seth asks, What to do about Detroit,and he give his thoughful suggestions. My two cents is for the SEC to prohibit any NYSE-traded company to base executive compensation or bonuses upon current year profits or current stock prices. If the... [Read More]

» 2009 might, just might, have some upsides from think story experience
For most organisations, 2008 was supposed to be the best year yet. So, guess what, most organisations planned for that big year, investing early and aggressively in their growth and success. They backed themselves, in other words. And then came... [Read More]

» Why Bailing Out the Auto Industry Now Is Wrong from bizsolutionsplus Featuring Solutions to Grow Your Business
Discussion surrounding the auto industry has left many of us scared, frightened, annoyed and confused, especially with Big Three CEOs feeding us a story based on fear regarding numbers of job losses and the hit to Wall Street. In the short term, GM goi... [Read More]

» What to do about Detroit -- a slightly different angle from A Path to Success
A comment on Seth Godin's blog entry on what to do about Detroit... I think the reverse will probably happen - GM and Chrysler will merge and weather the storm against the Japanese and European car makers. There is tons [Read More]

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