Auto Bail Out or Auto Collapse or Both

So there is this major US company that employs hundreds of thousands of Americans. The company is huge but has been in decline for several years. Now that the economy has fallen through the floor worldwide, this company has now gotten to a point to where they may shut their doors. They can't sell their product anymore. They employ so many people that it could put the US unemployment rate in a skyrocket high. This company wants to be bailed out by the government. Oh by the way, this company sells Dial-up 56k internet service to college students and dorms. Wait a minute, this is old, dying technology and college students of all people want better than that.

Now though I made up the company and it's services, this shows the absurdness of the auto industry that could not sell cars when times were much better because no one wanted them. Now that the economy is bad they want a bail out? OK so the tax payers bail them out and still don't buy their cars, their cars are still expensively made and very few noticeable innovations consumers want. Where do you go from here? Do what every other American business would do in trouble, file bankruptcy! This is where I would suggest different.

Lets take GM for instance. GM files bankruptcy but then they are forced to split up their divisions into separate companies. For example the Cadillac company is formed along with the Buick Auto Group, Saturn and etc. The poorest producers are eliminated or sold off to outsiders as a separate business unit. The newly formed auto companies are much smaller and are competing among each other. More innovation, better designs, faster launches of concepts especially technology and energy concepts.

Next, dealerships become showrooms, test drive facilities and local pickup locations. In others words, the lot is eliminated and online ordering and customer service call centers become the new sales force. People already hate dealing with car salesmen, so now the car salesman is follow up in a call center after the initial web visit. This is already the case in a lot of places. Now everyone custom orders the exact car they want from the paint, options and down to the carpet. Regional distribution completes the order and delivers to the dealership a new custom car to the customer.

There is more to this process which I will share on upcoming blogs but you get the point that we have to change the way we do things today to have a vibrant auto industry remain in America and be competitive in the world.