As I think about our bailing out Detroit, I can’t help but reflect on what, in my view, is the most important rule of business in today’s integrated and digitized global market, where knowledge and innovation tools are so widely distributed. It’s this: Whatever can be done, will be done. The only question is will it be done by you or to you. Just don’t think it won’t be done. If you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, because someone in Denmark or Tel Aviv will do so a second later.
Why do I bring this up? Because someone in the mobility business in Denmark and Tel Aviv is already developing a real-world alternative to Detroit’s business model. I don’t know if this alternative to gasoline-powered cars will work, but I do know that it can be done ”” and Detroit isn’t doing it. And therefore it will be done, and eventually, I bet, it will be done profitably.
And when it is, our bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay….
A sobering, hard look at the troubled car industry that seems eminently reasonable. Friedman could easily have picked some other examples of how new technologies have radically transformed industries and turned once dominant industry leaders into obsolete dinosaurs. I always think of how the invention of the digital watch just decimated the Swiss watch industry when the Swiss were slow to adapt to it.
Could there be an Anglican equivalent in the religious marketplace? As conservative and resistant to change as churches tend to be, could there be a whole new paradigm shift that is imminent in this realm too? And if so, what will be that new and improved technology for doing church and reaching the world with the gospel?
Here are a few possibilities:
1. “3-D Christianity” (evangelical, catholic, and charismatic) replacing the merely one-dimentional kind (plain vanilla Protestantism), or the two-dimensional sort (classic Anglicanism as both Catholic and Reformed). For 1-D is very narrow; and 2-D is by definition FLAT; but 3-D is lifelike.
2. As +Bob Duncan said in his visionary speech on the eve of GAFCON, a Global, Post-Colonial Setlement will soon overtake and overwhelm the venerable old Elizabethan or Reformation Settlement.
3. The New Anglicanism won’t just be “post-colonial,” it will be post-Christendom as well. The old state church model will finally go the way of the Dodo Bird, i.e., extinction. To me, this is the most radical and exciting prospect of all. It will also be the most divisive and take the longest to implement. But it will be well worth it.
David Handy+
No, no. Friedman jumped the shark some time ago, and doesn’t really have a grip on reality. His infatuation with globalization and the green revolution sells books but is not really connected to truth. The antidote to the old school network of auto manufacturers and dealerships is to oust the members of your state legislature and congress that are beholden to dealership campaign contributions. That’s right, folks, the laws in your state prevent innovative car distribution models. It’s not the “big three” that hold us back, it’s your good ol’ boy state legislature.
[blockquote]As I think about our bailing out Detroit, I can’t help but reflect on what, in my view, is the most important rule of business in today’s integrated and digitized global market, where knowledge and innovation tools are so widely distributed. It’s this: Whatever can be done, will be done. The only question is will it be done by you or to you. Just don’t think it won’t be done. If you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, because someone in Denmark or Tel Aviv will do so a second later.[/blockquote]
Ever wondered what’s being described when you hear the term “fatuous?” Read the above.
The first rule of business is cover your costs, Tom. And does it occur to you that tiny, crowded Denmark and Israel might be different markets? And how much coal are you going to burn to power up all those electric cars–or do you have any nuclear reactors set to go? And do you know what it takes to dispose of one car battery now? Quadruple that process and get back to me.
Sheesh.
If I am comprehending his argument correctly, I actually would tend to agree with what Friedman seems to be arguing here. That somewhat surprises me, as I generally find his ideas and tone rather cheeky.
My question (well, one of them) about the whole Auto Industry Bailout thing would be to ask if the bailout is propping up an industry that simply has failed from an institutional standpoint. And instituitional change is incredibly hard to do. You can’t just change this one thing or add that one product line, you have to literally go back to the drawing board and rebuild your entire vision and method of operation from scratch.
I don’t see most of the Big 3 really willing to do that, which is why I would argue that they want a bailout and not do the corporate soul searching (truly an ironic turn of phrase) the Chapter 11 Bankruptcy Protection urges.
Detroit is not going bankrupt because they don’t make enough hybrid or electric cars. Toyota’s Prius is a very small part of its product line, and is bought mostly by earnest granola’s without a clue what it takes to juice those toxin-laden batteries up. Porsche and VW are going like gangbusters, and SFAIK they don’t make hybrids or electrics.
Detroit is going bankrupt because of legacy costs and an archaic distribution model. Both involve heavy government externalities.
The main thing that’s wrong with the auto bailout is that it would be a shameful waste of a good crisis. Floods clean out storm drains, and crises clean out business (and occasionally politics).
The only way to fix the Detroit/UAW/politics mess is to have it ripped to shreds by external events.
Cheers,
Phil Hobbs
Phil, be careful what you wish for. There is no such thing as “business” – there are people, a group that includes you and me. I don’t think any of us wants to go down the storm drain in the interest of flushing business. And it is not likely that the individuals who created the mess will suffer – or be the ones who suffer most.
Sherri,
I’m not *wishing* for it–it’s here. The question is, are people going to be helped by propping up a system that has limped for decades, producing poor-quality vehicles under archaic work rules and Byzantine management practices? I think it’s far better for the people involved to have GM and Chrysler go into Chapter 11, restructure, and get rid of the problem, so they can prosper in the future. I speak as one who’s been through it–I was at IBM in 1992, when it was spewing red ink everywhere and laying people off by the thousands. I may go through it myself in the next few months.
The British car industry was a world beater at one time, but just this sort of misguided industrial policy doomed it to an agonizing decline for 30 years before its final disappearance. I don’t want that to happen to Detroit, and this crisis is our best chance at preventing it.
Cheers,
Phil Hobbs