American Auto Makers Have to Change so Do We!

The past few months have presented nothing but bad news for the formerly world leading American automobile industry. Henry Ford must be rolling over in his tomb. Alfred Sloan, the architect of the multi-division General Motors juggernaut, is a very sad “car guy” in the sky these days. Plant closings, huge employee layoffs, lost market share and horrid fiscal performance indicate that the “big three” (including Daimler-Chrysler) are in big trouble. They must change, and change is not pleasant for huge business complexes, or for employees, suppliers or customers.

This brings to mind a change that occurred right before my eyes as a small boy growing up in Kentucky. Several times each week, a horse drawn ice wagon would pull up in front of our little house and deliver block ice. The iceman was named Herb. My mother would always pleasantly greet Herb and they would exchange small talk, how about that the Reds game last night or the nice weather we were enjoying. Herb was a hard working and very nice man. And then, one day this regular ritual in our lives abruptly ended.

My parents bought a refrigerator. The hand delivered block ice that was essential to keep the old icebox cool was no longer needed. My mother was very concerned about the effect our new wonder appliance would have on Herb. She met him in the yard and told him as gently as possible that his ice deliveries were no longer needed. Then she asked him if he would like some iced tea and to sit a minute.

As clearly as I remember anything in my youth, I remember that conversation. Herb knew the inevitable march of progress and technology; in this case a 12 cubic foot Frigidaire, meant that he was soon to be looking for another line of work. It was sad. He was very matter of fact and my mother tried to be encouraging. Over the next few months we saw Herb in the neighborhood less and less. Within six months the ice Company was out of business.

Accept Change or Get Run Over

Like the barrel industry, the bicycle industry or dozens of other formerly thriving business segments, the ice delivery service, and now the American automobile industry was forced to change business models. If change were not embraced, indeed aggressively pursued, industry subsets would be superceded by new upstarts and technologies. “The Big Three” still have an opportunity to adjust to new market realities, but they will have to be relentless in the pursuit of economies, creativity and changing cumbersome bureaucratic business cultures.

Change is short-term pain. Managers will be significantly fewer. Blue-collar workers will not earn $65,000 per year plus benefits for unskilled labor in new jobs. Communities will undergo brisk changes in tax revenues, real estate prices and shopping patterns. College plans will be upset. Retirement dreams will be delayed, in some cases destroyed. Parts suppliers will be pressed on pricing. And yet, the future for all effected parties can, and should, be bright.

Since the Luddites in the mid-19th century attempted to stop the industrial revolution and preserve old-world work models, there have been groups trying to thwart progress. Progress requires change. Fortunately, looking in the rear view mirror is not a widely admired American trait. The parties most effected by this sea change in the American auto business have multiple opportunities to re-train, re-strategize, and start new businesses and services. With normal American drive, work and creativity our society will be blessed with a new generation of wealth creation, entrepreneurs and growth. It has always been so.

We live in a global market place. Nothing will change that. If foreign auto companies make better products at a better price we have to confront, and overcome, these market realities. Americans always have in the past, and there is no reason not to foresee a bright, but different future, for every current participant involved in the radical restructuring of our formerly great auto business.

The American economy is the most dynamic in history. Opportunity abounds and is available to every citizen willing to compete in the marketplace of ideas, work hard and not look backwards. Ford, Chrysler and GM can survive and prosper. Nevertheless, understanding and preparing for change will separate the successful from the losers, or modern day Luddites.

About the Author

Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.

After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.

Geoff Ficke and his consulting firm, Duquesa Marketing, Inc. (www.duquesamarketing.com) has assisted businesses large and small, domestic and international, entrepreneurs, inventors and students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.

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