A New Idea for How to Save the US Auto Industry

The US auto industry seems to be in a real pickle. Like much of the financial sector, it is tanking and wants help. There is something remarkable about seeing advocates of orthodox free market economics who in the abstract surely believe that firms that can't make it for whatever reasons should die, pleading government aid for industries in deep trouble. Free market ideologists often wind up advocating, as it is said, socialism for the rich, even if for no one else.

Part of the problem surely is understandable and justifiable lack of trust in upper management of Ford, Chrysler, and GM. How can it be that for forty years, those extremely high paid executives could never figure out how to compete with Japanese, Korean, and European cars that were better made and more appealing to US customers? Why did they not buy a few cars from other companies and take them apart and see how they are put together? Why did they not emulate the quality control practices of companies more successful than they? Why did they not study carefully what American consumers wanted in cars and try to satisfy that, instead of, in effect, turning the whole shebang over to foreign manufacturers while smugly assuming that somehow Americans would buy whatever Detroit offered them, even as sales figures belied that pathetic conviction?

Let me guess that part of the problem is that extremely rich executives with rather little foresight or imagination were in charge of the Big Three for decades. Let me guess that it never crossed their highly paid minds that their companies could tank. Let me guess that smugness and self-satisfaction are packaged in the same envelope along with huge salaries and bonuses that come regardless of performance.

Let me guess too that all the Economics 101 assumptions about the resilience of companies under our economic system, about rationality in economic behavior, about incentives to innovate and create, about the long term benefits of competition, fade like a sun bleached painting before the realities of short-term planning and short-term thinking, avarice, fear, and panic that seem not to make it into those introductory economics courses.

Why don't boards of corporations more often fire CEOs who fail at their work tasks? What is the sociology of the buddy-buddying among the super rich and powerful that blinds them to realities outside the fragile islands of "success" where they build their outrageously posh abodes? It is fully understandable that in the culture of the rich and powerful, anything goes if it serves the purposes of making money and living extremely well.

It turns out there is more to life than profits and comfort. And it may be that the cultures that nourished the bankers and mortgage companies and auto companies sucked them away from the realities that would, if properly heeded, have had them acting more thoughtfully and cautiously during the many years leading to the current and growing economic catastrophe.

I want to suggest a daring idea that could save the auto companies. It proceeds in three parts.

1) Give up on highly experienced, highly paid executives. Some might be up to the task of the moment, but once they get their salaries and golden parachutes, most of these executives are unlikely to care about the companies they are hired to salvage.

2) Extend your imaginations beyond the conventional box of assuming you need people with business school degrees and lots of polish to make a success of companies.

3) Turn to the one resource that probably has the strength, imagination, daring, and commitment to pull off a complete turnaround of the auto companies. I am talking about the lower level staff and workers who can bring their ideas, their ignored wisdom, and their neglected talents to the executive suite and figure out how to solve transportation problems in ways that will benefit everyone. They will learn how to build better cars, they will learn how to use environmentally sound ways of moving those cars, and they might even have the energy, determination, and imagination to see cars and trucks as part of larger transportation systems that can be understood and addressed right now.

Workers have taken over some failing industries in this country and in Argentina. It would be wise to learn how they did that and then apply what is learned to our suffering auto industry.

It is time for a great new social experiment: letting the people who understand the product and the business from the inside apply their smarts and dedication to saving this most fragile, underperforming, once-great American industry.