Why Can’t Detroit Reinvent Itself? One Answer: Texas

In examining the current woes of the American auto industry (among which is the fact that GM has 7,000 dealers compared to Toyota’s 1,500), blogger hilzoy at Obsidian Wings asks why there can’t be a serious rethinking of how cars are sold:

For instance, is it obvious that automobiles have to be sold in franchises, as opposed to stores in which the storeowner can stock whichever cars seem most likely to sell, the way bookstores do?

The obstacle to such innovative thinking?  Texas. The car dealership associations in our state, as in most others, have the Legislature in the palms of their well-manicured hands. Ironically, their self-interested history in promoting straightjacket state laws to protect themselves against the manufacturers may mean those that carry GM, Ford, and Chrysler products will soon be out of business.

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Comments

9 responses to “Why Can’t Detroit Reinvent Itself? One Answer: Texas”

  1. R says:

    Why, oh why do all the different manufacturers make their own engines?

    Apple and Dell and IBM and HP all use the same CPUs…all buy their hard drives from the same sources…

    The big three might be thought of a little better if they bought their engines from Honda or Toyota…buy the best parts for the job…quit reinventing the wheel.

  2. Danno says:

    Wrong answer, I think. Why don’t you guys check with Ed Wallace on this, doesn’t sound right to me. He writes for BW
    and the Startlegram. In fact why don’t you guys have him write for you? He is a wealth of knowledge on oil and cars.

  3. Glenn Hunter says:

    As a matter of fact, Danno, Ed will be featured in the January issue of D CEO magazine.

  4. Um... hello? says:

    @ R …

    They do share engines … have been doing it for years. The old Saturn VUE had a Honda V-6, the first gen MINI Cooper had an engine developed between BMW and Chrysler (new one is a venture between BMW and PSA), many Chryslers used turbo-4s and V-6’s from Mitsubishi, the V-6 in the Ford Fusion is the same as in the old Mazda 6s, etc, etc…

    Sometimes they share engines, or they bring over European/Asian Market Vehicles and rebadge them (see, eg, Chevy Aveo/Acura TSX)and quite often they share entire platforms. (The new VW Routan is really just a Chrysler Town and Country/Dodge Caravan Twin.)

  5. CrabKilla says:

    The car business is fukked up. It needs to go under so it can be reinvented like a modern day company.

    PC market is the first place to look. There should be two or three engine and major part manufacturers. The car companies should be marketing and design companies. The glue that brings together a vision. Not constructing it.

    Apple doesn’t manufacturer it’s iPods. It deisgns them.

  6. matt says:

    so really, “One answer: the entire country”…Frontburner is really hating its home state lately..

  7. Bill Marvel says:

    Detroit is pretty good at manufacturing cars, lousy at design and innovation. The solution is to separate the two functions. With federal money likely available to develop fuel-efficient cars wouldn’t it make more sense to have the Big Three bid to produce cars designed by independent design bureaus?

  8. Crabkilla says:

    @Bill Marvel – the design, innovation, marketing, and product design should come out of the car companies. The building of the car should come from overseas.

    Americans are spoiled. There are other countries that will do better work for 1/8 the cost. Sad but true. That is the way capitalism works.

  9. TGla323 says:

    Detroit is fixing itself. The only thing that needs to happen is a bridge loan to get the companies to 2010, when the UAW takes on the health care burden that have made them so uncompetitive on wages for the past 20 years.

    Ford really has their stuff together…they’re making great cars and trucks right now and are in a position where they could *probably* survive with little government help. The problem is that if GM and/or Chrysler fall, the overlaps in the supply networks and market perception would probably bring them down with the others. The auto industry spends more on R&D in this country than any other, defense included. This bailout shouldn’t even be a question.

    As for the dealers, you make a great point. For years the Big 3 have been unable to eliminate or punish dealers that screw customers or are generally incompetent because of state laws and strong dealer associations. Honda, Toyota, and the European manufacturers have much greater control over their dealer network which is why they have better customer service. This downturn in one way is great as it kills off the dealers that are underperforming or are incompetent which should lead to improved customer service.