Saturday, November 15, 2008

Neil Young on Saving Detroit

I didn’t realize how much rock musician Neil Young knew about making cars until I saw his suggestions on “How To Save A Major Automobile Company.” By the time I finished it, I realized that Young knows more about running an automaker than any of the people who are actually running GM and Chrysler, at least. It makes a case for replacing the management teams with people from outside the Detroit school of thought.

It is the Detroit way of thinking that is bankrupt here. A Citibank executive yesterday commented that Wall Street has already written off General Motors, but as of right now, GM is not bankrupt, and there is no reason it has to be, if it could just stop moping and return its focus to its customers’ needs.

Neil Young wrote, in part:

The big three must reduce models to basics[:] a truck, an SUV, a large family sedan, an economy sedan, and a sports car. Use existing tooling.

Keep building these models to keep the workforce employed but build them without engines and transmissions. These new vehicles, called Transition Rollers, are ready for a re-power. No new tooling is required at this stage. . . .

Auto manufacturers taking advantage of a government bailout must only sell clean and green vehicles that do not contribute to global warming. No more internal combustion engines that run exclusively on fossil fuels can be sold period. . . .

Detroit has had a long time to adapt to the new world and now the failure of Detroit’s actions is costing us all. We pay the bailout. Let’s make a good deal for the future of America and the Planet. Companies like UQM (Colorado) and others build great electric motors right here in the USA. Use these domestic electric motors. Put these people to work now.

The reason this week’s House move to bail out Detroit ground to a halt is that no one had a plan to make the companies profitable again, not in three years, not in ten years. If there has to be a bailout, it can’t be just to give some dying companies more cash to burn through for a few more weeks. Yet making a profit from making and selling cars is no great mystery. The major automobile manufacturers have to start thinking like startups, because that is essentially what they are at this point.