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Pondemonium by Greg Wittstock
November 18, 2008
What's Your Prius?
Posted at 5:15 PM
In today's challenging economic times, I just pinch myself that I'm not working with or for one of America's Big Three automakers. They can't seem to catch a lucky break with their plight, playing out in front of us as a symbol of failed strategy and out of touch management.
Nowhere are the contrasting styles of strategy and management more evident between Japan and the United States than in hybrid car technology. Pop quiz -- what flagship vehicle from anyone of the Big Three comes to mind when you think of the "hybrid" moniker?
Thinking, thinking…
Now the same question for Japanese manufacturers. How quickly did Toyota's Prius come to mind? If you could even find one today on crowded dealer lots, you'd pay a premium for it, despite falling gas prices.
Here's the kicker -- and something all of us can learn from in regard to making a product that's so dialed in and coveted you can charge a premium price for it. You can't cost justify the additional expense of the Prius versus domestic or otherwise in gas savings alone! Instead Toyota created a molten hot product by capturing the very real, but very challenging to define, consumer "green mindset." The mindset that puts a premium on environmental impact of the products consumers buy.
The question for all of us regardless of industry and marketplace is, how do we define the "green mindset" that either exists today or surely will tomorrow in our markets spaces? And then, how do we position our companies and products to capitalize on this ever increasing consumer perception to create our own version of the Toyota Prius?!
Furthermore, it is becoming no longer politically acceptable the world over to be in business for the mere profit of it. The emergence of these two factors has propelled green technology embracers like Toyota to the forefront in their field. By rewarding forward-thinking companies with their patronage, consumers have spoken with their most powerful voice -- their wallets! If you haven't heard them yet, and responded accordingly in your market, there's only one thing that's certain, some other eco-prenuer will!
I come from the camp where luck happens when opportunity meets preparedness. So take a lesson from America's decidedly "unlucky" Big Three and prepare your company now for the emerging green movement that has no limitations on its reach. You just might be rewarded with your own "Prius" product in the process.
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Sure, the Prius is the most visible, but GM has been developing and will soon release a two-mode hybrid Saturn Vue, Saturn Aura, Malibu, Sierra Pickup, and Escalade. All will be more people friendly as well as efficient. The problem is really caused by the financial mess on Wall Street. People and companies cannot get credit because of this.
I don't understand why people in the media continuously insist that people buy Priuses because they want to be "green". I own a Prius. Every Prius owner I have ever spoken to agrees that they did NOT buy their car to be
"GREEN". They wanted an automobile that had excellent reliability and excellent gas mileage. And on American roads today, that can only mean one car: the Prius.
The "REAL" problem isn't that people can't get credit...it's that they've become accustomed to getting too much credit. What happened to the mindset that you should purchase only what you can afford? It seems like companies like K-Mart have the right idea in brining back "layaway" programs.
Surely you folks don't think GW is actually writing this stuff, do you? I wonder how these will read when he has no more ghost writers on staff.
For a look at what a bail out of the American auto industry may hold for taxpayers, consumers, auto workers and even those politicians who support such a bail out, I call your attention to the British Leyland disaster.
Between the mid sixties and the late 70's, Tony Ben's Labour government bailed out the British auto industry. Despite an infusion of hundreds of millions of Pounds Sterling, all with various strings attached, the unholy triumvirate of Bad Management, Bad Products and Bad union work rules resulted in the total loss of the tax payer's money, the complete collapse of the entire British auto industry, the loss of hundreds of thousands of jobs, the almost total demise of Britain’s manufacturing base and in millions of British consumers suffering for years with notoriously bad cars. The failed bail out also helped to hamstring an entire generation of Labour politicians and set the stage for the Thatcher revolution.
Please give autoworkers (all auto workers) a break by making Detroit face the music. In the long run this will best protect our manufacturing base and the jobs of its workers. It will also assure that workers in transplant factories aren’t put at a disadvantage by their own government through the subsidy of their less productive competitors in Detroit.
Please give the American consumer a break by making Detroit face the market reality of what it has wrought with its “bigger is better” marketing and poor design and build quality. American consumers (voters) want quality fuel efficient, green cars, not tarted up, gas guzzling trucks.
Please give middle class and working class taxpayers (also voters) a break by refraining from taking their money and giving it to failed companies run by elites and staffed by workers who make far above average wages and receive benefits that the average American can only dream of.
Please also consider the way that a bail out looks to the American people:
GM management has been a poster child symbol of arrogance (see Michael Moore’s, Rodger and Me) and recalcitrance. This has been so for DECADES and EVERYONE knows it.
GM’s agenda of pushing low tech, high margin, low quality, heavy, gaudy, often poorly built gas guzzling vehicles with cheap credit, to people often unqualified for that credit, has not only bankrupted them but has also placed our national security in danger and contributed to the debt crisis.
Now GM’s $16 million per year, plus perks, CEO, Rick Wagoner, inculcated by decades of working at GM, flies to Washington in his personal jet to beg for a loan to insulate himself from the consequences of his folly and that of his arrogant and recalcitrant mentors. What is a loan, regardless of how many strings that are attached, likely to change about that?
Chrysler is run by a man, Bob Nardelli, who performed poorly at GE and then collected nearly a quarter of a billion dollar (!) booby prize, as a “Golden Parachute”, from Home Depot, where he “earned” over $40 million per year, following his unsatisfactory performance there. I doubt that anyone who has a track record like Nardelli’s and over $200 million in his pocket from a previous failure is in any position to ask workers and tax payers to make sacrifices. Further, Chrysler is DOA and Nardelli knows it.
Mercedes Benz also knew that Chrysler was dead. This is why they practically gave Chrysler away (compared to what they paid).
Chrysler is a two time looser with poor prospects and Nardelli is a three time looser. What makes you think that taxpayer money will change anything about that and even if it could, do you want to be associated with helping Cerberus Capital?!?
Cerberus Capital, the current owner of most of Chrysler’s stock, is a bottom feeding, greedy, wreckless, OPM (Other People’s Money), pseudo investment bank named after the hell hound that guarded the gates of Hades against the escape of the unfortunate. Cerberus also owns a majority stake in GMAC. In anti-trust (or at the very least market concentration) terms, this stinks to high heaven.
UAW management has shown militant, doctrinaire resistance to meaningful changes in union work rules that have cost their workers dearly in terms of lost jobs in Detroit even as their brother autoworkers have prospered at transplant operations without UAW contracts.
Even as the UAW's President, a real champion of the downtrodden working class, flies around on private jets, wearing $2,000 suits and begging for taxpayer money to maintain the status quo, autoworkers at non-UAW transplant factories enjoy wages, job security and benefits that, ironically, are at least in part due to 50 years of UAW labor action in the Big Three. These are wages and benefits that UAW workers won’t receive after the inevitable post bail out collapse of one or more members of the Big Three.
Poor management, poor products, failure to innovate, failure to make timely change: British Leyland then, GM, Chrysler and Ford now.
Tony Ben’s bailout: good money after bad with no meaningful change.
Will we all be saying the same in 15 years about the Big Three bail out? And, if so, in the next oil crisis / embargo, will America still be dependent, vulnerable and asleep at the switch because we enabled business as usual in Detroit? If so, what will it cost our nation in terms of blood and money?
Are you suggesting that detroit is in trouble merely because the japanese have managed to put forth a hybrid model and in turn have captured the green market? Excuse me for living in the real world, but I would dare say that the problem is a bit more complex,,,and well, probably doesnt tie in too well with your Mr Green Jeans column. While lower emission vehicles should be on the front burner for various reasons, detroits lack of said vehicles is not what has put it in this dire situation...but rather its huge dependance on Union Labor with both the lack of agility and extreme costs associated with it. Japanese manufacturers with factories in the US have an hourly average wage of around 35$ whereas in detroit at GM they are nearly 68 dollars an hour. Throw in the benefit packages being payed out to those who have retired (essentially a full salary plus benefits for ZERO productivity) and, well, you have yourself a company that will find itself belly up with or without the bailout. Let the free market funtion without intervention and Detroit will either rise to the occasion or continue on with the UAW and die...either result being just. Obama says "I try to imagine what a sustainable detroit would look like" Oh yeah? here's an idea...look at Toyota, squint your eyes and BAM! sustainable! and profitable to boot! Why are Honda and Toyota, who manufacture heavily in the US (as a percentage of parts, the Toyota Camry is the most "american" car sold in the US with nearly 84% american parts) not suffering like their american, union loving counterparts? DOWN WITH THE UAW!!!!!!!!!!!!!!!!
Preparation +Opportunity = Success! Toyota saw the light obviously before the other manufacturers. In preparation of that came the opportunity, uncontrolable gas prices, consumers who want fuel efficiency over image building autos and hence their success. We, U.S., automakers seem to have it backwards. Our preparation seems to be for the next “big” trend, like SUV’s were. Our opportunity was a rolling economy where every family has to have at least one. Our success…..Manufacturers bail outs and Auto Dealerships loaded up with them and no one to sell to. What ever happened to accountability in all of this current economic mess? What kind of message is being sent to everyone when unsuccessful businesses are being patched up by government infusions? What about the businesses that incur loses but are servicing their/those debts properly? What’s that called, Lucky? I don’t think so! It’s funny, and I can’t figure it out, but the harder I work the luckier I get! DUH! If this is not competition at it’s finest than I don’t know what is! We are getting our butts kicked cause we have gotten too lazy, too dependent on working less for more money and benefits, “double-dipping.” I wonder why the Auto manufacturing shift to the Southeast over the past 15 or so years has happened? Could it be that there is little to no Union presence there? The Unions are now counterproductive and if you don’t believe it just examine the situation in Detroit. A free market society rules and will always rule. I want to be hired for a job based on my ability, past successes and references. Not because I belong to a club that has muscled my way into employment, only to be guaranteed top dollar for my services whether I perform or not. That’s crap. Let’s remove the pitching machine, get some real pitchers back in the game and start playing ball like we used to.
@Jerry Balogh The issue with GM, Ford and the other one is not an issue with what happened a month or so ago with the financial markets. This big 3 issue has been brewing for decades, when they REFUSED to move forward with the times. When the Prius came out, I swear it felt like "Finally, a car company is finally considering the importance of energy and sustainability and using this in their product decisions". I tell you, it did not surprise me when the Honda Civic Hybrid, or the Prius Hybrid came out, because, at least to me, the question of sustainability was THE most important issue of our time even before these cars where first sold in the US.
It serves the big 3 right to be in such financial trouble and if it wasn't because there are people losing their jobs, I'd say, let those vision-less crappy companies die already! Perhaps you haven't been following the "eco-trend" for a while, but I have, and let me tell you, it has been around for decades. But these companies, instead of investing in the future, where lobbying against gas emission caps, and anything that would force them to finally move forward and innovate, in order to become a more sustainable company. So screw them and get your facts straight. The big 3 got themselves in trouble for sucking!
Funny how nobody is pointing the finger at the boardroom on this one. Yes, unions may have more power than they really should, but the fact remains that the CEO's of these big 3 where the same ones paying lobbyists to block any law that would force them to change their ways (gas emission caps anybody? or getting cars to get more to the gallon?)
It's hard to imagine that a union worker has a vested interest in making sure their company doesn't move forward, or stands to gain anything from making sure cars use more gas than not. But I guess I don't really understand the whole picture. Maybe, the big 3 had the intention (which I SERIOUSLY doubt) to move forward which would have cost them money...money that instead goes to the union workers.
Why don't the Big Oil Companies, bail out the Big Three??????????????????????????????????
In the world financial a crisis. Now thoughts absolutely about other things.
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