Home > Uncategorized > Jobs, Gates, Buffett Should Run U.S. Automakers: Mark Gilbert Bloomberg.com: Opinion

Jobs, Gates, Buffett Should Run U.S. Automakers: Mark Gilbert Bloomberg.com: Opinion

I sat in the window of a cafe this month in Annapolis, Maryland, a sailing town near Washington, counting parked cars. “Honda, Honda, Nissan, Toyota, Honda, Lexus (made by Toyota), Mazda, and a battered 1970s Cadillac.”

No wonder the U.S. carmakers are in meltdown and begging to be plugged in to the Treasury’s life-support machines.

Don’t be misled, though — the something that is rotten in the auto industry has nothing to do with the credit crunch, and everything to do with years of mismanagement, shoddy products and bad choices. (via Bloomberg.com: Opinion)

After 30 years of decline in American auto industry, the US still does not get it. There is a fundamental problem which goes right down to the way the US is organized.

To start with, the welfare state in the US breeds a huge structure of overheads – and it does not make a difference whether it is in private sector (as in US) or public sector (as in Europe). The auto industry with 300,00 direct workers – down from a million a decade ago cannot afford this cost. The adversarial US system with the UAW and the Corporations on opposite sides have closed minds.

The same goes for development cost. The overheads are simply killing. These overheads inflate the cost of development. The US, cosseted by 50 years of technological dominance – now need to kill that complacency and well fed contentment. The US Government also feeds this attitude with a system that is ‘fixed’ and ‘favors’ US business.

All this leads of course to poor product quality. Which the US consumer will not accept.

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