Resurrecting Detroit

THE CENTURION CHRONICLE
Special Issue – Mar 2010

RESURRECTING DETROIT
(might be good for the country as well)

It’s been a year since Uncle Sam moved in to bail out GM and Chrysler (Ford decided to tough it out, and declined). At the time most of us were very dubious such a move would really do the job of saving the industry, since it had shown several decades of decline in terms of quality, fuel performance, and cost. And foreign brands such as Toyota, Honda, KIA, and VW, among others, were giving Detroit stiff competition in the marketplace. For all practical purposes, the auto industry was a dead-man walking one. So why bail it out? Well, it isn’t the first time the government has bailed out large industrial elements of our economy. It made similar moves back in the day to “rescue” Boeing, Chrysler, Lockheed. So such a move was nothing new (despite the yowling of those equating these efforts as a dastardly attempt to “socialize” the industry).

The obvious answer, of course, is jobs, but what we’ve seen of the “rescue” operations so far is not very impressive….or encouraging. Somehow, all those billions of government bailout dollars don’t seem to have done the job for that aspect of the problem. The auto industry, Detroit, and Michigan itself, are all still hurting badly from high unemployment and low economic activity, resulting from that melt-down. Motown, looks like the remains of a bombed out city from WWII. So perhaps the answer to all these problems is to recall the old saw: What’s good for GM…is good for the country! That’s not as far-fetched as some might think. And here’s a scenario that just might do it for us all.

The key to resurrecting Detroit, and a big chunk of the American economy besides, is to reconsider the entire concept of the automobile. That is, to move away from the idea of it being something to be “owned”, as a kind of private asset which, incidentally, provides personal transportation. Instead, perhaps it’s time to just consider it as a “personal transportation unit”, something to be “rented” instead, and nothing else. Something that is both disposable and recyclable within a given short time frame. Doing that would allow the industry to change the way it produces and markets its automotive products.

As the elephant of the auto industry, perhaps GM should consider taking the lead to begin moving in that direction. That is, focusing its design and engineering resources and skills to produce a….365-day car. Simply put, to design and produce a personal transportation unit with a guaranteed 365-day maintenance free operation, with the unit returned to the dealer at the end of that time, with the customer receiving a recycling value and credit, against the cost of being issued a new unit to take its place. Far fetched? Perhaps not as much as anyone might think.

Here’s why: By producing such a short operating life vehicle, that would create a constant and steady demand for a new one each year. Thus, production operations would have to be structured to fill such a demand. A demand factor that would probably require a three-shift per day, 24/7 operation, thus, requiring a labor force and productivity level to maintain such a pace of production….all of which meaning…. jobs and full employment. The scope of such an industrial activity would, in turn, have enormous economic ripples. Economic ripples, not just for Detroit, but reaching into almost every corner of the country as well, to provide the raw materials, the miscellaneous parts, bits, and pieces needed to sustain such a production concept, on the front end, and, to support the re-cycling aspects of it, on the back end.

Collaterally, the marketing aspect of such a concept would require a wider and more dispersed network of outlets/dealerships all over the country, further adding to the momentum and impact of such an economic machinery. It would be different from the old model of these, because, rather than “selling” these personal transportation units, the dealerships would more resemble car “rental” operations. That is, clients would enter into year-long service type contracts for the kind of unit they needed, and with whatever amenities/extras they could afford, secure in the knowledge that they would only have a fixed operating cost for the entire period, and that, at the end of it, they would be able to turn in that unit, get a credit for it, and start up with a new unit for the following year.

As for GM, with production lines almost running 24/7 three shifts per day, its financial condition would rapidly return to its former glory days. Best of all, from local, State, and Federal government perspectives, tax revenues would once again flow into their coffers in volumes large enough to support all those budget schemes they so love to produce for us. As for the rest of us, instead of going in hock for five or more years to buy a so-called “asset”, depreciating to near zero in that same time frame, and, costing us a bundle in maintenance and repair costs besides, we could now simply go to the nearest “outlet”, pick what we wanted at a monthly cost we could afford, plunk down our credit cards, with auto-pay arrangements (freeing us from potential repo anxieties), and merrily drive off the lot. All in the matter of minutes. Our automotive life….would be a dream!

Today’s technologies make such a concept economically viable. Whether with internal combustion, electric, or other power-train configurations, the same 365-day concept could be applied to it. Further, as advances in technologies occurred, the efficiency, safety, and economy of operation of these transportation units would continue to evolve as well. We would be back to an age of having our own private “horse” for transportation again. One made of steel, plastic, and other materials, but with neither the need to care and feed it or….to dispose of its manure. Transportation life couldn’t get better than that.

And, like Lazarus, Detroit…would become swinging MoTown….once again.

CENTURION