Wow. The American automobile industry seems to be undergoing a phase-change before our eyes. I've been closely watching Bob Lutz's comments on the GM Fastlane blog for over a year. Lutz has made it clear that the only way for GM to recover is through a sharply focused design strategy.
Then, yesterday, Bill Ford announced enormous cuts in Ford's workforce, essentially relegating that company to the second-tier of world-wide auto manufacturers. His speech included these words, which sum up Ford problems:
Our product plans for too long have been defined by our capacity. We developed vehicles to fill plants, sometimes at the expense of creativity. That's why we must reduce capacity in North America.
From now on, our products will be designed and built to satisfy the customer – not just to fill a factory.
We're going to go way beyond what we’ve ever done before at Ford to find out what’s on the customer’s mind.
And then, today, we get this from Jack Keebler, Director of GM's Advanced Concepts group:
GM has been traditionally (and perhaps rightly) accused of ignoring customer input. Too often without that perspective, we've offered buyers well-reasoned -- but perfectly passionless products.
Now, these heartfelt mea culpas are touching. We all have a soft spot in our hearts for repentence.
But, look at what these two people are saying: in 2006, both are acknowledging that their companies have not bothered to truly determine what the American customer desires in an automobile or to have developed the capacity to reliably deliver to those desires. Wait. This isn't 1976, or even 1996...it's 2006. And NOW Ford is going to "find out what's on the customer's mind?" Have they been in a coma?
Toyota has been living in people's home doing ethnography for decades. Nissan spent months with surfers and extreme sports-types while designing the X-terra. For pete's sake, underwear makers create videos about their customers so their designers know what customers' lives are like!
How can the two historically largest auto manufacturers in America still be in a position to have to confess to being out of touch with their customers in the 21st century?
When the definitive history of the collapse of this great Ameican industry is written, I'm afraid arrogance and laziness will be at the center of the tale.
And millions of jobs and billions of dollars will have slipped through our fingers...
Tags: Ford GM Fastlane Blog
This ...
How can the two historically largest auto manufacturers in America still be in a position to have to confess to being out of touch with their customers in the 21st century?
When the definitive history of the collapse of this great Ameican industry is written, I'm afraid arrogance and laziness will be at the center of the tale.
And millions of jobs and billions of dollars will have slipped through our fingers...
.. is it. I found myself wondering very similar things as i watched Ford deliver his announcements. My wondering was along the lines of Thjey are so far behind the Japanese, and even the Koreans, imo. It's a mental model thing, along with (as you point out) ongoing arrogance and laziness.
I think it was a combo of the profitability of SUV's and the ongoing environment of low interest rates. I believe (tho' I'm no economist) that the easy-money policies of the last two decades, app;lied to the leasing of everything and ridiculously structured morthgage lending policies, are going to be shown, by history, to have been very problematic indeed.
Posted by: Jon Husband | January 30, 2006 at 03:13 AM