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25 Ways to Jump-Start the Auto Business

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.

25 Ways to Jump-Start the Auto Business
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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Rockwell Playground Courtesy: Peapod Mobility

2. The iPhone Solution

Dave Bieselin, director of unified communications, Cisco Systems

“The trick is to motivate people to buy a whole new set of vehicles, the way the iPhone changed the cell-phone market. If you look at the typical garage, it’s where the home, transportation, and power supply meet. Traditionally, all three operate independently. What if we were to link them, with the garage being the point of intersection? Now the garage wouldn’t just be a place for storage anymore but a power conduit, where you could charge your car and manage energy consumption. What if the car had a network that could connect to your home computer? Suddenly, you can download your playlist off your stereo, program your DVR, and adjust your home thermostat from the road. There’s a way to do cool, innovative things with technology, with connectivity, that could revolutionize how we think of cars — as something more than just another mode of transportation.”

Introducing the Ultimate App

Peter Arnell is chairman and chief creative officer of product innovation firm Arnell, as well as Chrysler’s chief innovation officer. His latest venture is Peapod Mobility: “On Earth Day, we’re unveiling the Peapod, a $12,500, 25-mph ‘neighborhood electric vehicle’ not allowed on highways.” Here’s how this 21st-century love bug borrows from the past and piggybacks on our Apple-obsessed future.

  • “The Peapod takes design cues from charming small vehicles from the 1950s and 1960s and looks futuristic from the front.”
  • “It’s made of 95% recycled and recyclable materials and costs between 2 and 2.5 cents per mile to operate.”
  • “Instead of a key, it starts by plugging your iPhone or iPod into the docking station on the dashboard. Eventually, it will record and display your energy efficiency and your carbon footprint.”

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Rockwell Playground Rendering by George Barris / Dmitriy Shakhmatov

3. Get Sexy

More than any other reason — even legacy overhead costs — the experts we contacted singled out poor design as the root cause for people turning away from American cars. “Unfortunately for Ford, its products aren’t exciting,” says David Champion, senior director of Consumer Reports’ auto-test division, by way of example. “Their style and interior fit and finish don’t make them got-to-have. Ford needs to focus on design.”

Professional car buffs see a return to the attitude of the swaggering 1960s as the answer. “There’s a reason why, when you ask people, ‘What’s your favorite car?’ it’s always the cars of the ’60s and ’70s,” says Justin Lin, director of street-racing flick Fast & Furious (fourth in the series, out this month). “It comes down to their sensibility and boldness.”

One option: Don’t water down the sexy concepts that get people’s attention. “The new Cadillac concept, Converj, is one of the most beautiful cars I’ve ever seen,” says Jesse Boyer, a young designer who has received acclaim for his Mazda concept vehicle, Hyoryu. “I would push those concepts into production to make the final product as close to the original idea as possible.” What that would accomplish is what Henrik Fisker has tried to do with his electric Karma sports car. “We need to inject emotion into vehicles and capture people’s love for cars again,” Fisker says.

Can we add that kind of sex appeal to lower-cost hybrids and electrics? Car customizer George Barris, who designed the original Batmobile, and rapper Xzibit, host of MTV’s Pimp My Ride, sure think so. “Look at the Prius. It’s a nerd car,” Xzibit says. “Yeah, you’re being environmentally friendly, but your dating life is gonna suck. That’s where the bailout money should go: making cheap, efficient hybrid cars that look good. Automakers just got $17 billion. Give me $1 billion. I’ll turn that shit around.”

Pimp My Prius

Longtime car customizer George Barris has converted pickup trucks and dowdy Lincolns into hot rods. Here’s how he spruced up a 2005 Toyota Prius Hybrid — while keeping it in warranty.

  • “The headlights retained their uniform position, but the outer rim was painted with gold-leaf fingertip swirls and pin-striped around the outer edge.”
  • “Right- and left-slanted scoops were used as air intakes.”
  • “The lower front pan has a wide horizontal air intake, plus stock directional lights.”
  • “The overall design is more aerodynamic, including the paint variations.”
  • “The frontal design is meant to be simple, dramatic, and free-flowing.”
  • “Vertical doors on the right and left can be moved up and out.”
  • “The design for the top has 2-inch drip moldings to lower the height of the bubble impression and give a unique streamlined effect.”
  • “Dual rear spoilers were installed to give you the ‘upstream’ air-dam look. The rear roll pan was molded into one piece.”
  • “All four wheel wells were flared out to compensate for 19-inch wheels and larger tires. We installed an adapter on the wheel drums for the wider tread to offer better cornering.”

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Rockwell Playground Courtesy: Zipcar

4. “If I Were CEO of a Big-Three Car Company…”

Robin Chase, founder of Zipcar (the largest car-sharing company in the world) and GoLoco.org (an online ride-sharing community)

“Let’s assume the bailout solves the immediate cash crisis. Now what? First, I’m going to ask Congress to raise the price of gasoline. I need to be assured that there will be enough demand out there to merit an investment in more fuel-efficient cars. If our gas prices are in line with those of other countries we like to sell cars to (perhaps starting in 2011 when my new cars will be coming off the line), I’ll be confident that consumers will embrace these new cars.

Next, I’m going to start experimenting with new product and service models. We recently passed the tipping point of 50% of the world’s population living in urban areas. ‘One adult, one car’ doesn’t work in congested and parking-scarce urban environments. Let’s expand beyond manufacturing and selling cars to selling transportation as a service.

I’d take 10% of my current R&D budget and put it into a venture fund. I’d finance startups, experimenting in areas where I lack core competency: truly alternative vehicles; services that relate to car maintenance and in-car experience; services that conceive of the car as one node in the larger transportation network; and ideas that leverage my cars and my consumers as a means of collecting data or marketing other in-car services. This is a smart use of my money because I would be investing alongside others instead of financing all the R&D in-house. In the process, I’d gain firsthand insight into a whole realm of business models that might be my future.

Third, I’d definitely stop fiddling with closed, proprietary wireless technology inside my cars and immediately introduce a generic wireless platform into every new car. A standard feature of this platform is the ability for owners to access critical car information remotely. I’d send owners text and email updates telling them about their fuel and battery levels, when it’s time to change the oil, and when the car received an unusual bump while parked. This would tie car owners to my company, provide dealers an ongoing revenue stream for maintenance and repair, and give me insight into exactly how consumers use (and abuse) my vehicles. I’d also develop a device that could be easily installed into cars already on the road so I’d have more owners participating.

This wireless platform lets me farm for ideas. As an open system, it would attract the minds, money, and efforts of thousands of innovators to think up desirable applications that a person with a screen in a car might find useful. This platform would be like my PC: Car owners could download any apps they find useful. I’d let the loser applications or those with no revenue model muddle along, and I’d buy up the winners.

By mitigating our investment risk and placing lots of low-cost and low-risk bets, we’d bring the Big Three into the future.”

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Rockwell Playground Courtesy: Martin Agency

5. Why Geckos Can’t Solve the Problem

Mike Hughes, president and creative director, The Martin Agency

“I’ve gotten at least a half-dozen messages from concerned citizens asking, ‘Why don’t you guys do for the American car industry what you’ve done for GEICO and Wal-Mart?’

As powerful as advertising and marketing are, they’re not going to save the American car industry. What the industry needs is a vision. The kind Bill Gates had for software, Steve Jobs has for Apple, and, yes, Henry Ford had for automobiles. Don’t just give us what you think we want; give us what we should want.

Don’t keep telling us your cars are every bit as good now as Toyotas or Hondas. That’s probably true today, but you’ve been trying to sell us that line for far too long. Tell us why we should want your cars. If you can’t figure out what makes your product special, then it’s probably not special. When you do have something to say, market the hell out of it. Boy, would I love to do that campaign.”

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Rockwell Playground Photograph by Tom Roche

6. Respect Dirty Work

Mike Rowe, star and executive producer of Dirty Jobs With Mike Rowe; CEO of mikeroweWORKS.com; spokesperson for Ford Trucks

“I’ve got too little expertise and too much bias to weigh in with a straight face about the Big Three. (Trust me, that new F-150 really does kick ass.) However, after 200 Dirty Jobs and five years of unintended social anthropology, I do have a theory regarding our overall relationship with manufacturing.

I believe the majority of people in this country are deeply disconnected from the Americans who still make our stuff. Forty years ago, it was easy to buy American. Not just because our stuff was better than theirs. We bought American goods because we actually knew the people who were making them. It was a powerful and personal connection that tied us to the products we bought.

The seismic shift from manufacturing to services has not only changed the composition of our gross domestic product, but also changed our national mind-set toward work. We no longer celebrate the way things get made. We are more interested in the way things get bought. In this global economy, we focus only on the finished product, which makes the Americans who still make them largely invisible.

Much has been written about the drama between management and organized labor, but the bigger struggle is our own dysfunctional relationship with work. The symptoms may be in Detroit, but the problem is everywhere.”

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Rockwell Playground Image by Kernigh

7. The Facebook Solution

John McElroy, host of the Speed network’s Autoline Detroit

“Almost 100% of the value created with a new car comes from design and engineering. But 60% to 70% of the time spent on product creation is a waste — you’ve got thousands of people at different companies working on the same problems. I would create an information portal for the entire industry. If there’s a small job shop now that’s stamping out a panel of steel and it’s tearing, it could take weeks or months to figure out. With access to the best minds, they could get it solved in a day. Imagine combining the best aspects of social networks like Facebook and Twitter. We have to break down these silos and share info. It’s product creation 2.0.”

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Rockwell Playground

8. Urban Outfitters

Car-free living is Detroit’s worst nightmare, but it also may be its greatest opportunity to reinvent itself. “The auto industry could reframe itself as a transportation industry,” says Katie Alvord, author of Divorce Your Car, “in the same way some of the oil companies have started talking about themselves as energy companies.” What other products could the car companies make? “It’s imperative that we restore passenger rail service, and we will need someone to build the equipment,” says James Howard Kunstler, author of The Long Emergency. But our favorite vision of the future has to be Sharon Roerty’s: “Imagine a young professional driving her GM car from her suburban home to a well-maintained train station, taking her GM collapsible bike from the trunk, boarding the GM train to the city, unfolding the bike in 15 seconds, and riding to work,” says the director of the National Center for Bicycling and Walking. “Now is the time.”

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Rockwell Playground Courtesy: Sound Wise Studio

9. Bet on Biology

J. Craig Venter, founder and chairman, J. Craig Venter Institute; founder and CEO, Synthetic Genomics; board member, X Prize Foundation (the Avion will compete for the Progressive Auto X Prize in 2010)

“I remember auto shows as a little kid, all the cars of the future that the auto industry promised that it bailed on over and over again. It was all electric cars or cars that got 100 to 200 miles per gallon — these innovations have been around for decades. Yet not much has changed. That’s not a failure of science; it’s a failure to implement the tools and technology that have been around for a long time.

Biology is emerging as the science that will most likely contribute to the positive disruptive technologies to mitigate climate change. The material that we use today — oil and coal — is ancient biology. It’s biology compressed over eons, converted into coal or oil. Biology can produce any molecule we want, including existing gasoline molecules or diesel or jet fuel. The question is, Can it produce the billions of gallons we continually use? We need something that is infinitely scalable, and that’s what biology is.

Most people don’t realize that the air they breathe is the result of biology — mostly microorganisms in the ocean, but also plants, providing all the oxygen in the atmosphere. Just by looking in the oceans, new organisms — and all these new genes — are providing some of the raw materials for discoveries that can make it possible to create fuel out of carbon dioxide. These are not processes that are 20 to 30 years away; they’re 5 to 10.

We don’t need radical new technologies to use the tools that come out of biology. We need a push to make it happen.”

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Rockwell Playground Courtesy: RUF International

10. Make Sci-fi Reality

Palle R. Jensen, CEO, RUF International, a Danish startup combining electric-car and monorail technology

“The concept of dual-mode e-guideways, of which RUF is one example, has great potential. The electric cars have small batteries because they only need to drive a few kilometers to get to the monorail. The user is automatically guided to enter the monorail, and information about his destination is transferred to the system, which will now move his vehicle through the network at an average speed of about 80 mph. The battery is recharged on the monorail, so that he never has to recharge at home. The energy needed for moving the vehicle is much lower than for a comparable electric car because both rolling resistance and air resistance are reduced. We’ve tested this on a test track in Denmark, and the Los Angeles MTA, among others, is interested in seeing its development. This system would create an attractive global market for car manufacturers.”

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Rockwell Playground Courtesy: Google.com

11. What Would Google Do?

Bill Weihl, head of green energy, Google

“The problem is not just about the auto industry. Ninety-nine point nine, nine, nine–I don’t know how many nines–percent of what moves our cars is oil. The most important thing for us to do is move away from that dependence and start using more electricity, which is much more efficient in terms of mileage and produces lower emissions. In addition, electricity can come from many different sources, coal, nuclear, hydro, so that as the grid gets cleaner, the emissions for electric cars will also go down.

There are a number of things that Google has done that can serve as useful lessons. Most importantly, we have converted eight cars in our fleet–Toyota Priuses and Ford Hybrid Escapes–to plug-in electric hybrids and set them up as a demo fleet that’s part of our car share program for our employees. There are a lot of reasons why after-market conversions of these cars has been good for Google’s bottom line–productivity, energy costs, everything. We’ve put monitoring boxes on the cars to measure mileage, gas, and electricity levels, and we’ve seen interesting and useful data that’s really shining a spotlight on the potential for this kind of technology.

Another thing we’re doing that could be helpful to the auto industry is having individual companies make a strategic decision to commit to higher efficiency standards. This is something that we actually did with a number of IT companies on energy efficiency related to computers. We co-founded Climate Savers Computing with Intel in 2007, and the goal is to basically reduce the hardware efficiency of computers and raise the capacity of computers to use smart technologies. We set a standard where all of the companies–Microsoft, HP, Dell, and others–agreed on adopting this fairly aggressive efficiency standard. Then we are working to get people who buy computers to commit to buying these more efficient models when they’re available.

The car industry could do something similar to this. They could get together and say something like, ‘By 2015, we’ll have hybrid cars that will get at least 75 miles per gallon.’ These changes don’t have to be implemented across their entire fleet, but any amount of commitment to research and development is a good step. That’s something car makers could do beyond the government-mandated fuel economy requirements. But the main priority should be to make more effective vehicles so that we can transition from using only gasoline to power our cars to a combination of gas and electricity and, eventually, once battery technology takes off, we may see a lot of people with electric cars that use no gasoline at all.”

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12. Customers First

Sarah Fisher, CEO/President/Owner of Sarah Fisher Racing, IndyCar series driver

“The best way that I can look at (the auto industry) is through the eyes of my race team and what we do here, on a much smaller proportion. We have a very streamlined approach to our team and our driving, by focusing our biggest efforts on staying close to our consumer, which in my world is the racing fan.

When you compare that to the world of auto manufacturing, they can also benefit from the same type of streamlined approach: who their customers are, what they want, when they want it. They can examine their older models and leverage the technology they have to consolidate product offerings to best match where the demand is. You just have to find and cultivate where their needs are and continue to make them hungry for a new story, a new product. Right now, it’s more of a mass appeal that they’re going after. Instead it should be, ‘Here are some specifics we’re doing, and let’s consolidate 5 or 6 offerings, maybe down to 1 or 2, so we can better serve them and bring all those technologies together in one piece.'”

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Rockwell Playground Courtesy: Ridemakerz.com

13. Deal or No Deal

Even though the experience of buying and selling cars has already changed radically in the Internet age, the lingering stench of going to the dealer remains and many experts see room for improvement. “We need to allow manufacturers to sell cars over the Internet,” says Jack Gillis, author of The Car Book. “Linking the purchase process to ‘just-in-time production’ will start to remove the tremendous inefficiencies in the distribution channel and increase their ability to estimate demand.” And it might also make buying a car, dare we say it, fun. “At Ridemakerz, kids customize their own toy cars, and we bring them to life,” says Larry Andreini, CEO of Ridemakerz, a Build-A-Bear-like experience for racecars. “Why can’t U.S. automakers do the same thing?”

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Rockwell Playground Courtesy: Honda.com

14. Change How Cars Get Made

Eric Noble, president, The CarLab, an Orange City, California consultancy that offers product planning and design advice for automakers

“Big, giant automakers need to start thinking in niche markets and niche vehicles, at least in volume terms. They need to free themselves from the delusion that they’re going to sell 120,000 units a year. One way to do this is to change auto-manufacturing platform from “unibody” construction to “space form.” The average car built in North America is built on unibody, which means the whole vehicle structure and outside body panels are made from several hundred pieces of stamped sheet metal welded together. Every one of those stampings requires male/female dies, every pair of those dies get loaded on a press that’s often two stories tall. All of this is incredibly capital intensive–above half a billion dollars for the average vehicle investment. At the volumes cars now sell at now, about 40,000 or 50,000 (because there are so many new competitors), you simply can’t pay off that investment. The space-frame model is reserved for Corvettes, the Pontiac Solstice, the Fisker Karma, and racecars. Tooling investment for the frame itself is an order of magnitude lower than that for the unibody. The bottom line: Building unibody cars is something that has been the rule and in fact today it should be the exception.”

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15. Surprise Us

Craig Jackson, CEO, Barrett-Jackson Auction Co., which operates sales for car collectors and enthusiasts

“I understand why Detroit shares its concept car designs; they’re testing the waters to see what people like and then tweaking the designs. But it takes away that wow factor from the September unveiling like we used to have with products like the Ford Mustang. I’ve been seeing the new Corvette model for three years, and it’s still not out yet. Detroit needs to get that excitement and surprise back when it can translate into sales.”

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Rockwell Playground Courtesy: Magna Steyr

16. Look to Europe

Robert L. Kanode, President & CEO, Valence Technology

“The U.S. auto industry will need to follow a model similar to what we see in Europe, with the planned rollout of pure electric vehicles for everyday and commuting needs, and of super fuel efficient turbo-diesels for long distance driving, in order to meet the needs of the average family. In addition, the US government will need to play an active role in encouraging increased battery manufacturing by investing in commercially viable technologies and in providing incentives to consumers to purchase electric cars.”

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Rockwell Playground Courtesy: Apple.com

17. Think Like a PC

Lionel Bony, senior consultant, Rocky Mountain Institute

“Automakers are going to have to change their business models, which means rethinking what it means to be efficient, and also reorganizing themselves and really focusing on hardware-software integration because software is going to become a lot more important once we start moving to electric cars.”

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18. Make a House Call

Ron Harbour, partner, Oliver Wyman’s automotive consultancy

“One of the things the government could do is just give the car companies $50 billion to foot their medical bills. The government is going to end up paying for it in other ways anyway, through Medicare or Medicaid and other social programs.”

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Rockwell Playground Associates assemble Accord engines on one of three engine assembly lines at Honda’s Anna Engine Plant in Marysville, Ohio where more than one million V-6 and four-cylinder engines are produced each year. | Courtesy: Honda.com

19. Fix the Weak Link in the (Supply) Chain

Casey Kozlowski, former quality systems auditor for Visteon, a major auto-parts supplier

“There should be a more collaborative approach all the way down the supply chain between American auto companies, their suppliers, their suppliers, and their suppliers. Old-school automotives have old-school confrontational attitudes toward those who supply them. Many of our teams worked with companies like Honda, and they’re very collaborative. That made developing new products easier because the environment isn’t confrontational. Everyone is working on a design and manufacturing parts. The probability of that turning out better is higher when more people have input.”

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Rockwell Playground Ray Evernham, right, at the Daytona 500. | Courtesy: Richardpettymotorsportsmedia.com

20. Leadership Matters

Ray Evernham, former championship NASCAR crew chief, former NASCAR winning team owner and analyst for ESPN/ABC

“Put someone in charge who’s gonna last more than three years.”

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Rockwell Playground Courtesy: Zipcar

21. Combine the Asphalt Highway with the Information Highway

Scott Griffith, CEO, Zipcar

“Auto companies have built an entire business model where the car is the unit of value. The experience is the unit of value they’re missing. GPS navigation is a bunt compared to where the industry can go. Think diagnostic information, entertainment, weather, congestion, emergencies, upcoming tolls. What if you could say, I’m going from point A to point B, tell me where the cheapest and easiest place to park my car is when I get within 10 minutes. And while I’m driving, give me the latest entertainment news? Or use a social network, so your car could tell you which friends are nearby and you could get together? The company that figures that out can become for the auto industry what Google did for the Internet, what Apple did for the computer industry.”

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Rockwell Playground Courtesy: Lauren Fix

22. Think Globally, Act Nimbly

Lauren Fix, editor-in-chief of CarZen.com, CNN correspondent, and author of three automotive books

“One of the biggest problems is not getting the product to market quickly enough, and the only way to do that is to use world platforms. Ford is just starting to figure that out: If the Audeo sells well in Australia and New Zealand, bring it over here. That’ll save them a ton of money across the world, rather than saying of each car, ‘This is just for Japan’ or ‘This is just for the U.S. market.’ Look at Toyota, Kia, Honda, Audi–they’re all incredibly nimble.”

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23. Sell Your Car

Jane Holtz Kay, author, Asphalt Nation: How the Automobile Took Over America and How We Can Take it Back

“I sold my car when I wrote Asphalt Nation, so for me, saving the auto industry is not a high priority. I’m more interested in promoting cleaner, friendlier mobility, like bikes and public transportation.”

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Rockwell Playground Courtesy: General Motors

24. Stay the Course

Lorraine Schultz, founder, Women’s Automotive Association International

“I would actually do what they are doing right now. I’m not going to go back on any mistakes that were made. They (auto manufacturers) actually have been working on saving the industry; it just hasn’t been brought out until the pressure hit. But they are trying to get the electric car, trying to observe better fuel efficiency, something we’ve needed for a long time. We’re on the right track now, and I do believe it will bring the auto industry back into the fold. I believe the bailout they got is going to keep them afloat, and if they can make those major changes that they have plans to do, we will do very well. We’ve gone through this before.”

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25. Buy American

Alonzo Bodden, stand-up comic and host of SPEED network’s “101 Cars You Must Drive”

“Let’s be real: If U.S. automakers really want to sell big, they have to convince people that buying Toyota will support the terrorists, and that “Honda” is actually Japanese for ‘Al Qaeda.'”

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