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25 Ways to Jump-Start the Auto Business

By: Fast Company staffTue Mar 10, 2009 at 1:00 PM

Rockwell Playground Photograph by Fisker Karma
Life-saving ideas from genomics whiz J. Craig Venter, Pimp My Ride star Xzibit, the GEICO gecko guy, the founder of Zipcar, Cisco's smart-garage guru, and more.

1. Let President Obama Take the Wheel

$4 Gas

Giorgio Rizzoni, director, Ohio State University's Center for Automotive Research

"Impose a floor on gas prices, a flexible tax that keeps the price at the pump at least $4 a gallon. In other parts of the world, that strategy has been proven to lead consumers to purchase fuel-efficient vehicles, and it lets automakers plan for the long term."

Nationalize Health Care

Tim O'Toole, managing director, London Underground

"The auto companies are unfunded benefit plans that make cars on the side. The government must institute a national health plan that frees the Big Three (and others) from current and retiree medical costs; it must also assume responsibility for pension obligations in exchange for equity."

Buy Electric

Chris Paine, film director, Who Killed the Electric Car?

"The government should use the bailout money to buy plug-in electric and hybrid vehicles for the government fleet. Some of the money should go to startups such as Tesla Motors and Fisker Automotive. They're innovative, more efficient, and don't have high overhead."

Cash for Clunkers

Annette Sykora, former chairman, National Automobile Dealers Association

"I'd love to see a nationwide cash-for-clunkers stimulus, which would incentivize people to trade in less-fuel-efficient cars. Because automotive is 20% of retail, restoring confidence could move the entire economy in a positive direction."

Put a Cap on Carbon

John DeCicco, senior fellow, Environmental Defense Fund

"A carbon cap would regulate the petrol industry and not put additional constraints on automakers. It's an incredible waste for automakers to chase ideas like electric cars. They might be important in the future, but a few years ago, it was ethanol; before that, hydrogen. Current automotive tech can take us pretty far without these unproven technologies. A carbon market will motivate the private sector to figure this out."

Pay by the Mile

Jason Bordoff, policy director, the Brookings Institution

"Let's change fixed-rate auto insurance to per-mile pricing. With no limit on driving, people tend to drive more. We estimate an 8% reduction in overall miles driven. It would take about a dollar-per-gallon tax increase on fuel to produce the same result. Two-thirds of households would save money, and it would make it easier to buy a second or third car."

Fake a Bankruptcy

Maryann Keller, analyst and principal, Maryann Keller and Associates; board member, Dollar Thrifty Automotive Group

"The industry needs to go through a restructuring. A legal bankruptcy could be long and messy. A prepackaged bankruptcy where the process is expedited and structural changes are negotiated ahead of time would be the best outcome."


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From Issue 134 | April 2009

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Recent Comments | 39 Total

March 12, 2009 at 11:34pm by Charles Bex

Bottom line is small buisness doesn't keep thier books right they fail. Whay is big buisness to be bailed out? What is wrong with you people. No one really gives a crap about the people who work on your vehicles, and vehicles that put grocerys in your store. You fine lady's wouldn't be able to have fine undys with out someone driving the product to your fav. store. You don't care about how big buisness takes advantage of your wallet, or how big dealers take advantage of the maker. WAKE UP give me someone nads to address who works on your vehicles. Maybe the technicians should go on break for couple weeks and see if your grocery store is empty in few weeks???

March 12, 2009 at 11:37pm by Charles Bex

Bottom line is small buisness doesn't keep thier books right they fail. Whay is big buisness to be bailed out? What is wrong with you people. No one really gives a crap about the people who work on your vehicles, and vehicles that put grocerys in your store. You fine lady's wouldn't be able to have fine undys with out someone driving the product to your fav. store. You don't care about how big buisness takes advantage of your wallet, or how big dealers take advantage of the maker. WAKE UP give me someone nads to address who works on your vehicles. Maybe the technicians should go on break for couple weeks and see if your grocery store is empty in few weeks???

March 13, 2009 at 2:51am by Tim Schwartz

can anyone see that america must re-tool to have a chance at any type of come back to a stable economy we have given other nations the tools to produce products so let their countries buy the products they make we should not be giving away our science anymore and we should not deal with countries that have no patent laws they have no type of moral aptitude their main concern is not quality but quantity how many times do we go through re-calls from foreign countries with products, merchandise or food before it becomes another disaster which they call a little mistake bird flu lead poisining mad cow i'm just saying illegal is just wrong so if our country says patent laws are a must for us then people our mission must be holding someone responsible to uphold them laws and not deal with countries that do not beleive in this simple way of business /law suits are very relavent here so be careful when its time to clean up after them

March 13, 2009 at 11:49pm by Evan Webb

What about declare bankruptcy and renegotiate union contracts? I have seen how unions work and they breed inefficiency and a lack of productivity. The Auto Worker's Union is one of the worst. The first thing they teach is to not be too productive because you will make the other union workers look bad. Also,there was a lot of stuff about what the government should do (setting artificial price floors, etc.) and a lot of stuff about electric cars. The best thing for the government to do is to get out of the way and let consumers speak with their dollar. If people really, truly wanted electric or hydrogen cars then it would be profitable for the auto industry to develop the technology. And the private sector would find it profitable to build the infrastructure--rapid recharge stations?

March 14, 2009 at 10:20am by Allen Laudenslager

The $4 gas idea will definitely kill auto sales. If you can't afford gas, you can't afford to drive and thus you don't need a car. We are a mobile society because we can afford to be. Want to hit the economy even harder, try taxing people into not driving to work. Now 30 miles away because the company you used to work for closed and this is the only job you can find.

March 14, 2009 at 7:31pm by Stu Gatz

The bailout money should be used to pay & retrain the workforce so the auto industry can cut loose its enormous staff and scale down to only profitable models. And the union is going to have to admit that the auto worker salaries are not sustainable and part of the reason that the US auto companies are not competitive.

March 14, 2009 at 8:33pm by Anton Romanenko

Crisis can a great deal to change in this business ;(

March 15, 2009 at 7:28pm by Mark Cady Jr

There are several things that have gotten the domestic automotive industry into the ditch they're in. I think they not drummed a common drumbeat that their products are really quite good qualitatively and feature-wise. The next thing that has affected them is the very business model that all publicly held companies suffer from in the U.S.; that the stockholder is the primary person of importance to the bottom line. We are very shortsighted relative to other countries. Most of the offshore manufacturers can develop and "bank" technologies without concern to profits. Then, when the time is right, they can unleash it in their product lines; thereby giving the illusion that they possess an acuity to being able to develop and produce new tech more quickly than the Big 3.

The next thing is fuel and safety regulations here. Fuel economy standards are based on a wrong assumption; that we should not "tax" the end user for their fuel usage. Most other countries do so and part of the reason they have smaller cars is that it costs the end user more to drive a bigger car. Other reasons we have bigger vehicles is simply we have more space and we have not developed effective short and long distance high speed public transportation. In almost all other countries except for Australia, one can cross multiple countries borders inside of one days drive. Here, you may not, in some instances. I have relative from Scotland and when he comes here, he rents a SUV. Why? It covers many miles comfortably and the fuel costs are a 1/3 what he pays back home. Worldwide there is no coordination of international standards. U.S. safety standards are some of the most stringent of all yet, we may not have as stringent a standard for say safety glass used in the windshield.

Another area that is a grossly underestimated cost is what it takes to provide health care and pensions to the average worker. This became apparent when the southern states Senators during the automakers bale-out hearings in Washington were heard to say, "let the Big 3 go bankrupt". Every one of those senators voted to give huge sums of monies to the offshore manufacturers so they would locate their assembly plants in their states. They made these statements as it is to their political advantage to their local base; not to the good of the America. What was not said is that the offshore manufacturers like the fact there is no history of fair wages there, they do not have to worry about social benefits costs and they got a load of cash from a bunch of U.S. taxpayers to locate there. We need to take care of our citizens needs. Should our industrial base provide this?

Once we get all of these inequalities in line with the rest of the world, maybe we can then sell more of our products overseas. This would provide the U.S. automotive and manufacturing base a much more stable foundation to weather future economic storms.

Now all we have to worry about is the unfair tariffs be leveled at our exported goods by other countries.

March 24, 2009 at 12:06pm by S. B. Hotalling

Been out of town, just opened up April's issue, didn't read any other of these posts - NOTHING MAKES ME ANGRIER than self-serving little non-leaders wanting to FORCE anyone into buying any product they don't want. Oh gosh, that means HARD WORK, INNOVATION, DESIGN on YOUR OWN DOLLAR! We can't have that!! There is enough gimme claptrap in this Fast Company issue to FORCE a person to call in sick for several days.

March 26, 2009 at 1:04pm by Frank Sherosky

I picked 4 ideas in the entire series that are plain dumb. The common factor is how each reflects social engineering solutions over technology. Too much for here. So, I address it as the Detroit Automotive Technology Examiner via http://www.examiner.com/x-3721-Detroit-Automotive-Technology-Examiner~y2...

March 26, 2009 at 8:49pm by James Jacks

Re:xzibit's comments in the article. I can't tell you how many times I've heard his same comments from people all the time. "Don't water down the concepts that get people's attention." If it were only that simple. The problem is these things called FMVSS (Federal Motor Vehicle Safety Standards) they restrict the designs to the watered down versions for safety's sake. Not that I would eliminate these standards or even change them. What people need to realize is that the concept cars are vehicles that are hand made, with little attention to safety, cost, manufacturability. When all of these pesky little attributes are factored in, you get what is currently being designed, It's that simple.

The reason that cars were more aesthetically pleasing years ago is that many of the requirements that we work to today weren't even around back then. It was like designing with a clean sheet of paper, whereas, today is like designing around the scribbles of a 5 year old.

March 26, 2009 at 8:49pm by James Jacks

Re:xzibit's comments in the article. I can't tell you how many times I've heard his same comments from people all the time. "Don't water down the concepts that get people's attention." If it were only that simple. The problem is these things called FMVSS (Federal Motor Vehicle Safety Standards) they restrict the designs to the watered down versions for safety's sake. Not that I would eliminate these standards or even change them. What people need to realize is that the concept cars are vehicles that are hand made, with little attention to safety, cost, manufacturability. When all of these pesky little attributes are factored in, you get what is currently being designed, It's that simple.

The reason that cars were more aesthetically pleasing years ago is that many of the requirements that we work to today weren't even around back then. It was like designing with a clean sheet of paper, whereas, today is like designing around the scribbles of a 5 year old.

March 31, 2009 at 8:05am by Allen Laudenslager

GM used to be a niche car maker. You bought a Chevy for entry level, stepped up to a Pontiac, then an Oldsmobile, a Buick and finally a Cadillac. Their big problems started when they tried to have a similar price point model for each brand line. Once they lost their brand differentiation their sales tanked. Putting the finance guys in charge homogenized their cars into something no one hated, but no one loved either.

April 14, 2009 at 9:28pm by Jamie Baker

Heck yeah! Crowdsource Detroits issues and build a solution. One of Detroit's biggest problems was being so myopic and insular. Get some new IQ and perspective on the case!

April 20, 2009 at 5:28am by Musa Gulkaya

There is another innovation option suggesting superior efficiency gain with a dramatic change in engine design technology, which is now contestant in Google Project 10^100.

To view; type "project 10100" to youtube2s search bar to find Affordable WheelChair w/ Future Energy" of bluea178. (Sort the list by view and rating to see appreciation of ranking among submissions).

You can access the mini website of the EnerGravity team. Just type it to google search bar to get it.

May 13, 2009 at 9:38pm by petty deh

These are great strategies for an auto business. Also consider the fact that people these days are now being more practical when it comes to purchasing a car. Consider a very affordable green car {e.g. chevy parts }, yet reliable and that has passed the US crash test.

June 12, 2009 at 4:33pm by Dave Windsor

Everyone agonizes about why the automotive giants of the U.S. are in trouble. Some have focused on labour and benefit costs as the culprit of the demise of the "big three", arguing that the unions are the problem even if that variable cost of manufacturing is just a small part of the total cost and rarely relates to marketing costs of the products. Why haven't they realized that all automotive businesses in the world are going through the same problems? Do they truely understand that there are few "U.S. built" vehicles any more? Every G.M., Chrysler, and Ford vehicle is a "world built" vehicle. Parts and engineering have been distributed to part suppliers and subcontractors that can supply the best product at the best price globally. Final assembly may be located in the U.S. but even those vehicles are probably becoming less and less. The "big three" has done many things right in providing customers with excellent product quality and service in recent years. Their products are on a par with the best marketed anywhere in the world. Part of the problem they have is with a marketing model that assumes a new release of vehicle designs every year and the continued financing availability of those products for customers.

They have been forced to discontinue duplicated product lines (for example Pontiac) and that is a step in the right direction. Their marketing model has been based on a growing economy where everyone replaced their vehicle frequently and focused on a U.S. market place. The expanding markets in the U.S. are in decline, just as the baby boomer generation peaked and is decline. People are keeping their current vehicle as long as possible. Leasing a vehicle and turning it over every two or three years is a process that may never return or will only be the available to a few. As product quality improve and the service of that vehicle is better, the vehicle will satisfy customer requirements that much longer. The opposite of the past marketing model.

There is a natural adjustment to the volume of products required unless there can be an expansion of the markets available. "U.S. built" vehicles have to be sold globally without trade restrictions they currently battle with. Their pricing of those vehicles has to make them attractive to those global customers. The products have to be attractive to those global clients. Financing of the sale of those products have to be available. The automotive business has adjusted to the concept of a global economy in their manufacturing process and have been unfairly denied opportunities to sell those same products internationally. Now it is time for governments to adjust to the same concept. Force foreign governments to remove trade barriers and give the same access to markets to all products, including vehicles.

Finally, people will just have to acknowledge that the growth of sales and product volumes of vehicles may never return to what they may have once been, that the number of automotive companies will be rationalized globally.

June 12, 2009 at 4:33pm by Dave Windsor

Everyone agonizes about why the automotive giants of the U.S. are in trouble. Some have focused on labour and benefit costs as the culprit of the demise of the "big three", arguing that the unions are the problem even if that variable cost of manufacturing is just a small part of the total cost and rarely relates to marketing costs of the products. Why haven't they realized that all automotive businesses in the world are going through the same problems? Do they truely understand that there are few "U.S. built" vehicles any more? Every G.M., Chrysler, and Ford vehicle is a "world built" vehicle. Parts and engineering have been distributed to part suppliers and subcontractors that can supply the best product at the best price globally. Final assembly may be located in the U.S. but even those vehicles are probably becoming less and less. The "big three" has done many things right in providing customers with excellent product quality and service in recent years. Their products are on a par with the best marketed anywhere in the world. Part of the problem they have is with a marketing model that assumes a new release of vehicle designs every year and the continued financing availability of those products for customers.

They have been forced to discontinue duplicated product lines (for example Pontiac) and that is a step in the right direction. Their marketing model has been based on a growing economy where everyone replaced their vehicle frequently and focused on a U.S. market place. The expanding markets in the U.S. are in decline, just as the baby boomer generation peaked and is decline. People are keeping their current vehicle as long as possible. Leasing a vehicle and turning it over every two or three years is a process that may never return or will only be the available to a few. As product quality improve and the service of that vehicle is better, the vehicle will satisfy customer requirements that much longer. The opposite of the past marketing model.

There is a natural adjustment to the volume of products required unless there can be an expansion of the markets available. "U.S. built" vehicles have to be sold globally without trade restrictions they currently battle with. Their pricing of those vehicles has to make them attractive to those global customers. The products have to be attractive to those global clients. Financing of the sale of those products have to be available. The automotive business has adjusted to the concept of a global economy in their manufacturing process and have been unfairly denied opportunities to sell those same products internationally. Now it is time for governments to adjust to the same concept. Force foreign governments to remove trade barriers and give the same access to markets to all products, including vehicles.

Finally, people will just have to acknowledge that the growth of sales and product volumes of vehicles may never return to what they may have once been, that the number of automotive companies will be rationalized globally.

September 19, 2009 at 7:36am by hazel mon

If I were to plan and open a business that is related to automobiles, I'd rather be unique like I'd sell car accessories and oklahoma parts of different quality and quantity so customers could choose and decide which accessories they would like to avail depending on their budget.

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from such financially poor country will not have big requirements and therefore will be ideal for the family. Shocking is the fact that more and more criminal events, which happen in America, Pretty Russian girls and in other countries are related with the abuse of the foreign brides.

November 4, 2009 at 1:56pm by andrew zverev

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