An Interesting Perspective on the Auto Industry

December 18th, 2008 at 04:17pm Bob Trojan

When I lived in Rhode Island, I was a fan of the Providence Journal’s Opinion columnist Mark Patinkin.  I was glad to see that he is still with the paper and I came across one of his latest stories.  I thought you’d be interested in this one.  Here is an excerpt…follow the rest with the link below.

Patinkin:

“I’m a loyalist when it comes to cars. I only buy American. I loved my VW Rabbit in the late 1970s, but have stuck with Detroit iron ever since.

I don’t fault those who buy foreign, because I’m also for competition. And that, too, is because I’m a loyalist. Nothing, I figure, is better in the long run for U.S. carmakers than being challenged by Japan. It’s the one thing that can make Detroit up its game.

But it hasn’t happened.

Which is why I’m not sure a bailout is the answer, and if it is, it should have major conditions. If a 35-year Japanese invasion hasn’t been enough, then the Big Three need to be shocked into changing their corporate culture.

Some say Detroit has come a long way. Perhaps. But on some levels, they’re still in the same state of denial they were in back in 1975.

I know a little about that because I got a glimpse into it in the late 1980s when I co-authored a book with Ira Magaziner, a Brown grad and Bristol resident who worked in Bill Clinton’s White House and now chairs the Clinton Foundation’s AIDS initiative.

At the time we did the book, called The Silent War, he was a business consultant who traveled abroad often and was alarmed at how foreigners were out-performing us in many industries. At home, American business refused to see it.

His experience with Detroit is worth retelling because it reveals a stunning blindness that clearly is still in the culture there today.

In 1975, he was working for the Boston Consulting Group (BCG), when Volkswagen hired them to do a study. VW was panicking because Japan, with its own small cars, had started eating into VW’s U.S. sales. Japan was also nipping at the Big Three, but they shrugged it off. It’s telling that a German automaker cared more about defending U.S. turf than the Americans did.

VW had two questions for BCG. How boldly was Japan going to invade America with cars? And was Detroit about to fight back with a domestic small-car strategy? Magaziner was assigned the case.”

Here’s the rest…

http://www.projo.com/lifebeat/markpatinkin/Mark22_11-22-08_FDCBAFQ_v15.1e76123.html#

When Magaziner and Patinkin co-authored  “The Silent War” I bought and read the autographed book.  It is filled with true life stories about American Industry.  I’ll have to re-read it.

Entry Filed under: Management, Economy