Why I love the US auto industry

I’ve been watching a lot of the talk about the US Auto Industry lately and I don’t see many people sticking up for it. That’s partially because the execs in that industry are horribly clueless and are flying around private jets. Come on, you missed the chance to really pull some PR magic out of the air. If I were an exec there I would drive an American car down from Detroit. But, let’s leave the PR cluelessness aside.

When I was in China over the past few weeks I saw that the Chinese market LOVES American brands. You really need to go there to understand just how significant this is. On nearly every corner you saw an American brand. The world’s biggest bookstore there? It has a 7-11 on the first floor. And a KFC. And a Starbucks.

Everywhere I looked I saw Buicks and Chevy’s (both American car brands).

I saw Nike and Patagonia and many other American clothing brands. And lots of American technology brands were used at the BloggerCon there. Dell. Apple. Etc.

So, back to why I love the US auto industry and why I’m going to stick up for it.

I own a GM car. My producer owns a GM car and a Ford car. My wife owns a BMW, German. My dad owns a Toyota. My brother owns a GM truck. My other brother owns a Honda.

Funny thing, they are all great cars. The last two cars I’ve owned are American (I had a Ford Focus, now have a Saturn Aura).

So, why are American cars getting such horrible press? Well, they haven’t done two things:

1. They haven’t protected their brand from mediocrity. Apple, for instance, doesn’t put its brand on crappy things. At least not in the past nine years since Steve Jobs came back. But Ford and GM puts its brands on all sorts of second-rate crappy cars that are sold to taxi drivers and rental car industry. Every time I rent a car it’s usually a crappy car. It really bums me out. If I were at GM or Ford or Chrysler I would stop making these crappy cars.

2. They haven’t innovated. Three weeks ago Ford gave me a Flex SUV to borrow for a week. I put more than 500 miles on it, and it is a great SUV. It is a state-of-the-art SUV. Has Microsoft’s Sync technology in it so you can talk with it. The lift gate has a motor in it to lift the tailgate up for you, which I really appreciated when we had some heavy rains and it kept me from getting my hands wet. The SUV itself had a great ride, handling, and was a lot nicer to ride in than my BMW is (my producer Rocky, says so). But, really, these are minor innovations. They aren’t any that you’ll get credit for as an auto maker because other brands have similar things (aside from the Microsoft Sync, which isn’t that satisfying, truth be told — it often didn’t understand when I wanted to switch the radio from, say, CNBC, to NPR). The kind of innovation that American car companies WOULD get credit for? Going all electric all the time. Even GM here, with its Chevy Volt, is coming too late to the marketplace to get all that much credit.

Actually, I think it comes down to the executives PR gaffe. Why are they flying private jets around? They need to demonstrate that they are car enthusiasts and that the American industry is worth saving. Bob Lutz has gotten close when he drives around the Volt and shows it off, but it’s too far away still. We don’t understand why it takes so long for American industry to come up with a new idea and a new car.

When the executives come back to Congress they should demonstrate that American industry CAN come back and CAN do something innovative.

Here’s how.

1. GM should shut down many of its lines and many of its brands. Do a real house cleaning. Why do we need Saturn, Buick, Cadillac, GMC, Chevy? We don’t. Pick two, get rid of the rest. Work on the brand. Make sure that the American brand remains one that’s viable in places like China and India. If we screw up our brands, or, worse, let them go out of business, then we’ll see America drop in influence very quickly around the world. Right now Chinese young people think that being like an American is “cool.” What if they figure out that it’s not? Yeah, there goes any chance of interacting with a billion-person market.

2. Ford and Chrysler should shut down all lines that make substandard, crappy cars. Yes, this will put hundreds of thousands of people out of work and move tons of market share over to Korea, Singapore, and China. But, sorry, this needs to be done if you want Americans to be in the car business at all in a decade. If you don’t, then the people who can build quality low-cost cars will eat our lunch and will take away our oxygen anyway (and, they are coming).

3. GM or Ford should make a strategic deal with Tesla to turn 20% of its best dealerships into Tesla dealerships and should help Tesla get access to the American market. The same company should make Tesla a premier American brand.

4. GM or Ford should figure out why rock star Neil Young could turn his big-ass-American car into an electric car that regenerates its electricity with a liquid fuel generator that uses natural gas, not the stuff that comes from Alaska or Saudi Arabia. Why can a freaking rock star out innovate big old American car companies? GM and Ford should be ashamed. We should take away all executive perks until GM and Ford demonstrate they can innovate again.

5. GM or Ford should make Shai Agassi’s car, Better Place. Why, again, is an executive from Silicon Valley out innovating the old-school US car industry? Give Shai one of those jet planes and let him get to work.

6. The congress should increase gas taxes to make all this happen. Obama should call for a “moon shot” for the US industry. One of replacing 50% of cars with electric cars by 2020. Can’t happen? Well, if you think that, then get ready for the Chinese. They are building their own car industry. Their citizens are getting tired of the pollution there. They are getting wealthy (I saw tons of Audis, BMWs, Ferraris, mixed in with those Chevys and Buicks) and they are building their own brand names too, that they will bring world-wide. We only have a couple of years of market window before someone else slams it shut.

These moves will not be easy. There is not a whole lot of love for the American car industry in the United States right now. Getting Congress to do ANYTHING for this industry will prove remarkably difficult (and will be impossible if American Car execs remain arrogant and out of touch and don’t sell all their jet planes and start riding in coach like the rest of us).

I’m hopeful, because I love my American car and I hope I can buy another one soon.

My experience with the Ford Flex demonstrates that we can build awesome cars here. The fact that the VW Beattle (and Tesla and many other great cars) were designed in Los Angeles demonstrates we still have the best car designers on our shores and that they build products that people want around the world.

What do you think? Am I off my rocker? Is there any hope? Or should we just shut down the whole industry and let the Chinese take over?

Oh, one other little data point. I met a former executive from Mercedes Benz (Daimler Chrysler). He said they built a car in Germany and built the same one in China and the one in China had fewer defects. Do NOT assume that the Chinese won’t take over the entire world in car production in the next 15 years. You will be proven horribly wrong if you assume that.