An interesting letter in the FT from Geoff Wardle:

“Sir, There is much debate about whether the US car industry should be bailed out. Some argue that lame ducks should be left to die. Others point out that if General Motors, Chrysler or Ford fail, millions of indirect employees could lose their jobs too as the colossal supply industry falters.

So, I would recommend that any “bail-outs” from Washington be contingent upon Detroit’s re-invention. Clearly the 20th-century auto industry business model is broken. Designing, mass-producing and selling cars yields a sad or, at best, sporadic return on investment (unless your name is Toyota or Honda). However, the demand for personal mobility and transportation continues to rise. The auto industry needs to see its future business as providing mobility. Building cars might still be a significant part of the industry’s economic activity but it would be a means to an end, not the end in itself.

Detroit (and much of the global car industry) might not be good at heeding advice but its design and engineering teams are spectacularly good at developing and manufacturing complex, extremely reliable and durable products at a very keen price and on a massive scale. So imagine how this prowess could be utilised to create and build much-needed alternative transportation and infrastructure, such as personal rapid transit systems. If Washington insisted that American taxpayers’ money was used to build a different, sustainable business model, the car industry’s product development and manufacturing expertise would become better utilised and provide the US with much-needed alternative transportation.

Perhaps the dealer network, which has for so long held the auto industry’s development hostage, could also play a more profitable part in the mobility service equation. There is a great deal of creativity and technical expertise within the auto industry. Washington just needs to insist that it happens on the executive floor as well.

Geoff Wardle,
Director, Advanced Mobility Research,
Art Center College of Design,
Pasadena, CA, US”

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