After reading Tom Bozzo’s post via Vtcodger, I was inspired by the comments about bad management.
I’m not confident that the issue of the Big 3 management is the result of stupidity as much as it is from philosophy. Part of the bitching of the Big 3 in the first crisis was do to the need to move from focusing on money to focusing on a solution to a need: personal transportation. We got the Vega with unlined aluminum blocks and mickey mouse brakes. Infact, if you ever saw the casting of the engine, it looked like it was 1/2 a casting of the small block V8.
However, Japan’s business approach appears to be an extension of their life philosophy. Thus, Toyota brought out the Prius in Japan in 1997. 4 years after the creation by President Clinton of The Partnership for the Next Generation of Vehicles. This was 1 year after Toyota announces: January 16, 1992 – Toyota Motor Corporation (TMC) announces the Earth Charter, a document outlining goals to develop and market vehicles with the lowest emissions possible.
They set out to solve a need. We instead got a endless talking point that the purpose of a company is to make a profit. Well, the Big 3 made their profit. Now what?
And that PNGV program? “The 1994 PNGV Program Plan calls for a “concept vehicle” to be ready in about six years, and a “production prototype” to be ready in about ten years.”
Just a little late in their time planning, wouldn’t you say? Toyota was out 3 years post this report in their country and world production 2 years before the PNGV program called for a “prototype”! And Toyota didn’t need to be sweet talked into it. But we did spend some money:
“In FY1995, about $308 million was appropriated for ongoing PNGV-related R&D at eight federal agencies. Of this total, 88S went to three agencies: DOE, Department of Commerce (DOC), and National Science Foundation (NSF). Industry is spending about $100 million during this early, high-risk part of the program. For FY1996, the Administration requested $383 million. The House approved $228 million, a cut of $80 million or 26% from the FY1995 level, including zero funding for two agencies. However, the Conference mark is $312 million, which is nearly even with the FY1995 level, but is $71 million or 19%. lower than the Administration request.”
But, let’s speed forward.
By 1997, participants had settled on the specs of the “super car,” as it became known: the sedan would be a lightweight, diesel-electric hybrid. (Diesel engines, because they use a higher compression ratio, consume less fuel per mile than gasoline engines do.) By 2000, the Big Three had all produced concept cars, which were unveiled with much fanfare at the North American Auto Show, in Detroit. G.M.’s car, which was called the Precept, came equipped with two electric motors, one mounted on each axle. Ford’s Prodigy featured an aluminum body and rear-facing cameras in place of side-view mirrors, and the Dodge ESX3 was made in large part out of plastic.
The concept cars were wheeled out, then wheeled away, never to be seen again.
You do know the story of the EV-1?
In January, 2002, just months before the prototypes of the vehicles were supposed to be delivered and after more than a billion dollars of federal money had been spent, Energy Secretary Spencer Abraham announced that the Bush Administration was scrapping the project. When he delivered the announcement, Abraham was flanked by top executives from the Big Three, at least one of whom—G.M.’s chairman, Jack Smith—had stood next to President Clinton when he launched the program, eight years earlier. Abraham explained—and the auto executives seemed to agree—that the program had been based on a fundamentally flawed premise. The future of the car didn’t lie with diesel hybrids or any other technology that would allow vehicles to get eighty miles to the gallon. “We can do better than that,” Abraham declared. The Administration and the automakers, he said, were undertaking a new, even more ambitious venture, called FreedomCAR. The goal of this project was to produce vehicles that would run on pure hydrogen.
And thus was born the fable of hydrogen. Great! But what about the issue coming up like right about now? Toyota saw it. They solved it and I bet they already have something more in the works for the “more ambitious venture”. You know what else Toyota was doing in 2002?
Toyota announced they were now making a profit from the sale of each Prius. The success of hybrids had now become apparent.
How’s that stated purpose of a company working out for ya now? What’s the solution now? Another new purpose for a company? How about: It’s no longer to make money, it’s to not have it taxed away. That’s how the stock holders will get paid.