Long-time readers of this column know I consider the industry's fascination with both MBAs and what Wall Street thinks to be major impediments to building great product, and may jeopardize the OEM's very survival. Unfortunately, this does not tell you where the emphasis needs to be placed, or how such a change would halt the slide to mediocrity and death many automakers are now making. For that piece of the puzzle, I turn to Jonathon Hurden, managing director, U.S. Operations, Mahle Powertrain Systems (formerly Cosworth Technologies; Novi, MI).
"Engineering is where it all starts for a product," says the peripatetic Hurden, "but it's seen as a burden, a cost at many corporations." It is an image that permeates the profession, not only within corporations but with the general public as well. The ability to design and develop a product ranks well below the ability to make money, despite the fact that all the money in the world is useless if there are no products to buy. It is in his succinct description of the money men that Hurden—in my estimation—really hits the nail on the head: "They are the police department—the head guy, the 'controller,' is the equivalent of the police chief—when they should be seen as a service bureau. Their job is to provide analysis, support and information to those responsible for the various functions within an organization, but power and responsibility has devolved to them because what they do can be measured."
Yes, Mr. Hurden is an engineer by trade and training, but one with financial responsibility for his group. However, his engineering background doesn't nullify the validity of his statements. If anything, they magnify them because an engineer is trained to reach an optimal solution by understanding the interactions that take place between components, and determine their potential effect on the system. Engineering components in isolation—much like measuring dollars spent by each function—tells you nothing of the effect a failure or fault has on the rest of the system.
Which leads me to this point: Engineering is the lifeblood of any organization that produces a product. Strangle it, and you will compromise the ability for the company to survive. The car companies and suppliers with the highest returns on investment and best quality over the long run are those with the reputation for engineering excellence. They place a premium on the creativity of their engineering staff to produce robust, innovative, cost-effective solutions, and redeploy these resources when necessary to do more with less money. These companies don't look to the supply base to take the engineering "burden" from their shoulders, though they may move some of their engineers out to the supply base to create more integrated solutions. Creating products is the most important thing these companies do. Making money—very large sums of it, in some cases—comes from doing this well.
"Breaking down the silos that exist within a corporation, or even within functions," says Hurden, "reduces the potential to miss problems, and creates opportunities to use information to solve problems." Solving problems is what engineers do. Like any other member of the organization, with the right motivation and incentives, they can contribute greatly to the bottom line. "Unfortunately," says Hurden, "I believe it will take years to convince some companies breaking down the walls is a good thing to do." By then, however, it may be too late to save them.