For those who check in on my column will know my colleague and friend Merkel Weiss who I quote on occasion because he adds balance from a design engineer’s point of view.
He’s a friend and a colleague and member of the Motor Press Guild. Professionally he is a Mechanical Engineer and was a member of the design group at Chrysler Corp. Equally important is that he was a professor of automotive engineering and design at the famous “Art Center College of Design” in Pasadena, California. Some of Professor Weiss’s students went on to become famous as well with adopted car designs such as the PT Cruiser and Chevrolet HHR to name a couple.
Merkel and I talk on occasion and try to inspire each other and critique each others work. We’ve met on many fields of battle which often come out a draw but when it comes to engineering I can’t argue with the man.
I believe Merkel’s observation here will ring a bell with the events of the day with the Automotive Industry in turmoil.
Free the Detroit Engineers
By Merkel Weiss
Perhaps by the time you read this the dust will have settled on the remnants of what used to be the Detroit Big 3. I’m confident that whether or not you love, only care for, or couldn’t care less for Detroit products, it is clear that the tie-up of the myriad of related jobs (about 10% of all US jobs) and the need to supply the defense industry makes sufficient enough case that the auto industry must be remain active. To those who say they believe that Capitalism alone will cure the Big 3, please recall how rapidly the rest of the world went into a tailspin when our market did, and try to recognize that all of us are dramatically more interconnected than we were in the 30’s. The down side of losing such a large portion of the US manufacturing industry is simply too vast to overlook.
We all must take a hard look at the current layout and decide how we feel about the bailout, loan guarantee, or structured bankruptcy since we are so connected to the products. There is no doubt that the Big Three could have managed their companies better than they have. After all, in the postwar era they were the premier automotive design and construction organizations in the world. Subsequent to that, we can safely say that at least until 1971 they did in fact build true world class products. But things began to change and, as you well know, at GM there was gradual and consistent market share erosion for maybe 35 years.
There are many reasons for this but they are all connected to Toyota one way or another. First and most importantly, entrenched management always led themselves to believe that the quality differences between their cars and Toyotas were largely a matter of public perception and that the gap has been bridged. We have heard this repeatedly and in fact I heard it in a Ford commercial for the Fusion only last night. Unfortunately this was neither true then nor is it true now.
Take a look at any year Consumer Reports listings of the Most Reliable vehicles and Least Reliable vehicles (April and December) and you will quickly see that the former reads like a product pamphlet for Toyota and Honda while the latter looks more like a who’s who at the Big 3. Look around and you’ll see lots of old Honda Civics and Toyota Corollas on the road. They were good cars in the 70’s and they still are. When you look around, note how many ‘70s domestic cars remain compared to the then relatively more scarce Japanese. Quality of course is a moving target and the Big 3 have done much to improve. Clearly the Big 3 cars are vastly better than they were in the ‘90s. But unfortunately, they are still not good enough or efficient enough and without this baseline, much of the rest of the product detail is just that.
Roger Smith, CEO at GM from 1981-1990 made many decisions that were shrewd, but poorly executed. Among them was the notion that there could be a Cadillac in every garage. Then while he cut costs and related quality, he invented Saturn. This tended to polarize the products and ultimately relegated them to the bottom of the price pool, and sadly also at the bottom of the quality pool. While companies like BMW, Audi, Lexus, and Acura clawed their way up-market to compete with Mercedes Benz, Cadillac executed a magnificent backslide from the Standard of the World. Sad Cadillac products such as the Cimarron, V8 diesel, V8-6-4, Catera, and the most recent Euro-failure BLS, have all come and gone.
Similarly sad stories can be told of the fortunes at Ford and at Chrysler. The path toward salvation begins by simply recognizing how some of our more successful competition works and to emulate those. Starting with Honda and BMW, for instance, we can see that the structure of the company is flatter and less vertical, with dramatically less upper management. Next most obvious is that even with the reduced management overhead, more money as a percentage of net income after taxes is spent on R&D. This may not always look that wonderful on the monthly balance sheets, but in the end results in a more technically competitive product, which of course is where we want to be.
Every BMW and Honda car sold in the US has a modern DOHC engine with virtually service-free variable valve timing and lift system designed integral to the engine for maximum thermal efficiency (read: good performance and mpg). This is hardly the case at the Big 3 and as a result, they find themselves at a technical disadvantage in engine design and therefore efficiency. Further, imports are making rapid inroads toward direct cylinder injection across the board, much like that used in the 1954 Mercedes Benz 300SL Gullwing. As a result, the imports have passed us and are now pulling away from us technologically. This needs to end. The engineers in Detroit need to be set free to generate the new products that they are more than capable of producing while at the same time achieving the ever increasing fuel economy that we need.
In order to relieve the technical logjam, the Big 3 must relieve themselves from the layers of management which have caused them to get here. House cleaning needs to start at the Board of Directors and proceed downward through the CEO, Vice Presidents and into the upper strata of working managers. There need to be fewer products as well; fewer Marques and fewer nameplates from smaller companies. Reliable domestic small cars with solid fuel efficiency in the neighborhood of 40mpg need to be available from all of the companies. Modern 6 and 7 speed automatics with limited slip need to appear yesterday. Automatically-shifted manuals transmissions (clutchless manuals) need to be available. Mercury and Buick need to either be supplied with decently appointed salable products or pack it up. The Big Three need to emerge as smaller, more agile, better-run companies. In particular, they need to manage success better by putting more into products and savings and less into obese salaries.
The outcome has already been written, for Toyota will emerge as the powerhouse that it is, not so much for how great their products look or how well they isolate the driver from the road, but for how little they break, and how much money they have in reserve. This is good management and we can do it too. All it takes is to put the right people in place now.
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