The Chasm Detroit Must Cross

In recent days we have heard much about the potential bailout of the “Big Three” automakers, while at the same time foreign auto manufacturers in the US are in hiring mode. The prime reason given for the Big Three Bailout is millions of jobs are at stake and the potential for the Big Three to default on $100 billion in loans which is affecting the financial sector of our economy. The Big Three CEO’s have come to Washington to plead their case, and Congress responded. “Show us a plan,” they said or “we cannot show you the money”. And in this plan it is expected that the Big Three outline how they will innovate to future success.

In the past Detroit was seen as a source of innovation, but as a recent BusinessWeek article described the current Chrysler (currently lead by Robert Nardelli, former HomeDepot CEO) is in the “innovation basement” lacking vision, design clarity and banking on old technology. This holds true for the other Big Two, and how they got here is clear to me. Innovation has become a chasm between the American Automotive Industry and the market.

I work on innovation issues in the auto industry, including OEMs, suppliers, engineers, designers, financial and marketing people. I have worked with US automotive companies, European automotive companies and Asian automotive companies and I have come to understand a key difference between US automotive companies and the others related to their ability to innovate: Automotive companies outside the US have a design mentality that permeates their enterprises.

What becomes clear to me with foreign automotive companies is the presence of what I call the “designer’s eye” in every aspect of the enterprise, a sense of aesthetic and function that instills a human appeal to the products they create. Whether it is the smallest component to be placed in the vehicle or the design of the vehicle itself, the designer’s eye is constantly present. This eye is present even in the most ardent engineer.

This is very counter to how American automotive companies approach their work. First of all, engineering is seen as a problem solving activity. Problem solving is based on a mindset that is reactive (responding to what is) rather than predictive (generating what could be). This reactive mindset precludes an aesthetic orientation, which is ultimately needed, so the ideas for new technologies and products are engineered and then handed off to designers to “package” and make functional and appealing, an activity often described as “design by committee.”

Second, the walls between engineering and design in American Automotive companies not only add to product development cycle times, but inhibit the sharing of the designer’s eye. Chris Bangle, the Chief of Design at BMW’s Design Center in Munich, Germany (an American, by the way) puts it this way, “At BMW we work with cross-functional teams from the start, with representation from design, engineering, human resources and financial controlling.”

A more fundamental issue may be influencing this designer’s eye; education. Schools in Europe and Asia place equal emphasis on the Arts and the Sciences. Students in Europe learn as much about the Master Painters and Architecture as they do about Physics and Differential Equations. I believe this emphasis creates a balanced perspective that is brought to the job.

So what should we look for in the Bailout Plans of the American Automotive Industry?

First, we must see that there is intention to instill higher levels of innovation in the products and technologies they produce. They must show concrete steps, including the integration of design and engineering, and having the courage to try new things. The challenges of the future are clear; meeting rising energy costs, reducing carbon emissions, and dealing with ever increasing congestion on our nation’s highways.

Second, we should see that the American Automotive Industry is willing to develop ideas that are less reactive and challenge consumer assumptions. Too often they have kowtowed to the whims of the American consumer (large SUVs) rather than developing compelling ideas and designs that are right for a changing world. This is evidenced by the fact that the Toyota Prius and other hybrids have taken the market by storm even though the American Automotive Industry introduced alternative vehicles years ago, but withdrew them when a small group of critics, including the Oil Industry, emerged.

Finally, the American Automotive Industry must be willing to challenge the constraints placed on it by related industries; in particular the oil industry. The influence of the oil industry has done much to direct the development of the American Auto Industry and it is imperative that for the American Automotive Industry to survive, the two must work together and address the challenges to both industries and the world.