Can you build a car by committee?
Can you build a car that people will buy by committee?
It’s been tried, and it doesn’t work.
Nevertheless, Treasury Secretary Tim Geithner and National Economic Adviser Lawrence Summers are forming a task force meant to revamp the auto industry.
The AFL-CIO and other interested parties will have a commanding presence – which doubtless will be good for them.
Whether the auto industry survives is another matter.
This is part of the price GM and Chrysler must pay for accepting federal money – but it’s hardly a reassuring notion.
On the Washington landscape, a task force lies somewhere between a committee and a commission – and none of them are good at actually doing things.
In fact, creating a task force for the US auto industry is about as smart as, well, designing a car by committee.
That’s what Henry Ford II tried back in 1948. There was a heavy postwar demand for cars – and Ford thought he’d try his hand at an upscale model.
He set a planning committee to work: Six years later, it presented details to Ford’s Administrative Committee, followed one year later by a formal presentation to the Executive Committee.
Thus was born the star-crossed Edsel – arguably the most famous flop in American industrial history.
Projected to sell 200,000 vehicles in its first year, 1958, it sold 110,000 in three years of production.
The committees loved it.
Customers hated it.
What an unnecessary failure.
What a lesson for Geithner, Summers and their committee.
Bottom line: A task force isn’t needed to “fix” Detroit.
The solution to its problems is simple:
* Make cars people want to buy.
* Make them affordable by renegotiating the labor contracts now strangling the companies and wrecking the future for autoworkers and their families.
The overall per-worker burden at the Big Three is upward of $70 an hour – compared to the $27.34 an hour earned by the average private-sector worker in the Upper Midwest states.
As a result, GM – Detroit’s sickest “patient” – loses about $2,000 per car sold.
That’s unsustainabile.
The car-by-committee approach caused Henry Ford II excruciating embarrassment and lost (in today’s dollars) billions. But it came at a time when America totally dominated the global automobile industry – so Ford could recover from the Edsel debacle.
That’s no longer the case.
Detroit is on thin ice; it won’t take much to put the industry out of business.
Yes, Washington is paying the piper, and it is free to call the tunes.
But it would do well to make this song slow and easy.