Dudder: Yesterday, Today, Tomorrow

Delphi is the poster child for industry, and more than a few OEM executives are praying that Steve Miller and company will force changes with the UAW they can borrow.

Delphi is the poster child for industry, and more than a few OEM executives are praying that Steve Miller and company will force changes with the UAW they can borrow. If it happens, these boardroom titans won’t have to confront the union and its workforce with long overdue adjustments that would have been less painful had they been taken in small steps over the past couple of decades. But I’ve railed enough about the lackluster talent that permeates so much of the auto industry; Ivy League graduates that believe theory is practice, and for whom textbook answers are the only solution. As much as I’d like to take these jokers out to the woodshed to beat them and force them to repeat, “We must know who we are and what our products stand for,” it’s not worth the effort. They’d only internalize the stimulus, not the meaning, and create a new category where this is but another box to be checked off in similar situations.

Instead, let’s look at the decline in the units per model. In a finite world, if you have more models—or more players—the number of units per nameplate is going to trend down. Or at least it did in the math classes I took. We’ve known for years that the domestic industry has too many plants, too much capacity, and a declining share of the market. Despite this, agreements were signed that gave the unions veto power over plant closings, and laid-off workers “supplemental unemployment benefits” that are an income redistribution tax paid by new car buyers. What a great business model!

Only recently have automakers become serious about building the greatest number of variants off a single platform, but even this strategy reduces maneuvering room as tastes change and buyers move from this drive configuration and powertrain to that one. Building around component sets—suspensions, powertrains, interior pieces, etc.—that can be mixed and matched to create unique vehicles offers a better value. Unfortunately, neither does you any good when the mindset is still focused on volume. Cranking out cars with minimal differences helped Henry Ford lower costs and capture market, but it didn’t last. Once the public’s basic transportation needs were sated, the desire for variety grew. It’s no different today, nor will it be tomorrow. Competitive organizations will offer low-volume vehicle families that share major componentry, and can be built together under the same roof. A plant capacitized for 150,000 units might build as many as nine different vehicles, and use aluminum and steel in ratios from 0% to 100% in the structure. Long-life dies will become a thing of the past, and bodies-in-white will be assembled like race cars on base plates with precision jigs and room temperature adhesives. There will still be an assembly line, but it will be fed from lineside module build areas, and travel at slower speeds because more content will be added at each station. Of course, the key to success is the personality and character of the final product. It will take men and women of vision to set these parameters from the outset, and to negotiate skillfully to keep them intact. Strong leaders with the steel backbones of divisional leaders of days gone by, who know how to interrogate a vehicle in order to determine what it stands for. Unfortunately, they aren’t the ones who will be promoted to positions of power.