Tuesday, August 14, 2007

Liquor Is Quicker, But Innovation Is Better

Too bad there wasn't an alcohol shortage in Western Siberia (at least he wasn't driving blind). Nissan has come up with a possible solution (it looks very feasible to me).
Meanwhile, a new theory that fulacht fiadh, in Ireland, may actually be ancient breweries (traditionally, they have been thought of as cooking sites). I'm not sure anyone can actually prove that, one way or the other.
It seems funny to me that Japanese auto manufacturers tend to be more progressive than their American counterparts--building cars with better gas mileage, and frequently better safety features--and the Big Three complain that they just can't compete. How hard is it to plan ahead? We had our first gas shortage in the 70's, and Detroit still hasn't built a car that gets 'good' gas mileage. I understand that part of the problem is that Japanese auto workers work for less money than UAW union members, but by the time they pay to have cars shipped over here and pay import taxes (if they even do that--look around, there are an awful lot of 'Japanese' cars being made right here in the United States. That avoids shipping costs and import taxes, but then they probably have to deal with union wages, the same as Big Three cars made in the US), there can't be much of an advantage (if any--why do you think so many Japanese car companies have set up plants here in the US?). It seems to me that the real problem is that the Big Three have grown complacent: For a lot of years, they only had to compete with each other (I say that, I mean, the Big Three has only been around for about fifty years. Chrysler invented hydraulic brakes in 1957 and changed the face of American car companies forever). Are the American car companies afraid of another Edsel?
And now Chrysler has hired new CEO Bob Nardelli, the man who received a 210 million dollar payout from Home Depot amidst fears that, if allowed to complete his contract as CEO, he would run the company into the ground. Does Chrysler know something that Home Depot didn't? One would hope so. Who knows? Maybe Home Depot's board just didn't understand Nardelli's work ethic; maybe this is the guy that's going to infuse some real innovation into American car manufacturing. I think what Detroit is missing is just the simple philosophy: Look at what people want and need, and work out ways to build it better, and less expensively than your competition, even if your competition stops working out ways to build its product better and cheaper. Isn't that the basic model of competition? When companies work to earn business from competitors, then they win, and, more importantly, consumers win.

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