How to fix the problem with Detroit.

I have worked for quite a while as a car salesman.I have worked in a couple different dealership, I have seen a ton of different sales techniques, I have worked in different facets of the business before my recent entrance to management and I ave seen a bunch of salesmen come and go. Most of that doesn’t matter. What does matter is three things.

1) I LOVE cars.

2) Even though I work in the industry I am still a customer.

3)I hear other customer complaints every day.

Now everyone has their own ideas of what is wrong in Detroit with the Big 3 auto manufacturers and why they are going down the toilet and honestly there are a lot of factors that need to be addressed to fully fix the problem but I think I may have a good place to start that maybe some other people are missing.

Sure there are the obvious problems of piss poor management, overpaid unnecessary unions (say what you want after working in, with and around unions I will always believe they have lost the true spirit of why they exist and have become the enemy) low quality products, in efficient cars, cutting jobs to cut costs and the list goes on. What it comes down to though is that no one is BUYING the cars.

The thing is no one is buying any car, no matter the country of origin or the logo on the front. Cars aren’t selling. The people that ARE buying cars are the people who can afford to pay cash and the people who have no choice but to buy a car right now. Yes, I will admit the economy is in a rough spot and it is tough to get approved for credit. Again like I said at the beginning, their are many factors that need to be addressed to resolve the issue completely but the biggest part of the problem is simple.

I know it took me a while to get here, but I wanted to make sure I covered as many of the other points as I could first. Ready? People aren’t buying cars right now because they can’t get what they want. I am not being existential or metaphorical here. It is the simple truth. Think of it like this, you walk into a burger joint and tell the cashier you want a double cheese burger, extra cheese no lettuce, no mayo, and a tomato on the side and when your order comes it is exactly what you wanted. What did you spend? $4.00? Maybe? Why did you get the burger prepared that way? BECAUSE IT WAS EXACTLY HOW YOU ORDERED IT. For a lousy couple of bucks a burger joint would probably set one of their employees on fire just to earn your business. Burger King even has it in the slogan, “Have it your way”.

Why then are you expected to pay anywhere between $12,000 and $70,000 for a car and have to stay within the constraints set up by the manufacturer? Why are there any constraints at all? When I talk to guys that have been selling cars for a while the all tel me the same thing. The 60’s 70’s and 80’s were over all the best time to sell cars. Sure there were economic factors that may have tossed in a bad year here and there, but generally it was 3 decades of sell sell sell.  One of my mentors pointed out to me that even though he did well in the 90’s it was because the price of cars sky rocketed, but he actually didn’t sell a ton of cars.

I started to process all of this and I came to a realization. Basically there were two factors that held true in three prosperous decades. First was that if wanted an orange car with yellow interior and very specific options, that’s what you got and second the cars were affordable.

That’s the secret right there people. Give the customer what they want at a price they want to pay. Now check this out…this is where it gets fun.

My suggestion is to start at the point of contact with the customer and work backwards. Instead of car lots with a limited number of New Vehicles with a limited number of options it should be set up like a boutique. The manufacturer would provide one of every model they offer to the dealer with base equipment. Those vehicles would be for demo purposes only. Once the customer selects a vehicle then options are added and colors chosen.

This approach can help to save some cash as well because if the people pick the options then they know the prices and they pay for what they want. They won’t argue over the price of the car. You know, back to the hamburger thing real quick, if you tell them to hold the pickles do they charge you less for it? No. You still pay full price because the cost difference isn’t that great and you’re getting exactly what they want. People aren’t afraid to spend a little extra for what they really desire.

O.k., so you may be saying to yourself, “Well in a system like that the cars would be ordered one by one and take months to deliver”. Not true. Build a shit load of the base models with no paint and fabric. then when you get orders the bulk of the car is already built and just the finishing touches are put on. Next? Oh shipping from over seas? Easy. Build them all here. Honda, Hyundai, Nissan, Toyota and others are already doing it. In the long term, paying employees and building the cars in the U.S. will save over the cost of shipping and exporting vehicles to the U.S.There, now the aut industry has started to creat a ton of U.S. jobs again.

O.k. so we solved the dealerships and the shipping, lets take on the plants. First things first, dump the unions. Sorry guys. i know you started off meaning well and I do believe that at one point you were a good thing, increasing wages, ending child labor and making safer working conditions, but now you’re killing the U.S. economy. If you don’t like it, there’s the door, there are plenty of people BEGGING for jobs that will work for half your salaries and be making twice what they were at their last job. Once the unions are cut then the amount of people drawing from pension funds will stop growing, the pension collectors wil all die off and the auto companies can start saving money again.

Finally management. Face it guys. You’re beat. I know. I love Detroit. I have great memories from there. I loved working behind the scenes at the auto show and getting to sit in on a lot of hush hush stuff, but you lost. The foreign guys can make a better, cheaper safer family sedan. That’s o.k. though. Let them have it. No one builds a better truck than Detroit. No one builds a better muscle car than Detroit. No one builds a sexier sports car than Detroit (except maybe the Europeans but they aren’t that affordable).

What I am saying is…FOCUS!!!

Ford, build the F-150, The Powerstroke, the Mustang, the GT and a luxury car under the Lincoln banner and stop.

GM, Build the Silverado, the Camaro, the Corvette and a Caddy and cal it a day.

Dodge. You already fucked up the charger, but you gave us the Challenger. My suggestion to you is a little different. Stop building trucks. You build a good product but the others got you beat and if you try to compete even the Japanese trucks can crush you. Its alright though, your strengths lie elsewhere. Build the Challenger. Build the 300. Build the Viper. Build Jeep Wranglers and Wrangler unlimiteds. Stop trying to build anything else. They suck. Believe me your last generation of durangos has no balls. You try to make every multipassanger vehicle a van. Stop. Focus.

This will help to streamline the Big 3, save them some money, create jobs, reduce costs to the customer, give the customer what they want and stimulate the economy. With a good foundation the auto industry can focus on the other issues plaguing it but it has to start by giving the customer what they want.

4 responses to “How to fix the problem with Detroit.

  1. Points I agree with:
    *Detroit is out of touch with customer needs.
    *On demand manufacturing is in this case superior to the current mode.
    *The big 3 are being counterproductive trying to by all release vehicles in every class.

    However, the bottom line is that cars no longer make sense. Don’t get me wrong, I love cars. From road trips to cruising the strip with hot wheels and a killer sound system to late night races to tuning my ride, cars are awesome and very America. But then I grew up and realized that while those things are awesome, cars do not make sense from the practical standpoint of getting people where they need to go. Between the amount of energy used to the number of deaths and major injuries to having a place to park them all; cars are just not the answer for getting people and goods around. Maybe for contractors, movers and deliveries; but pretty much everything else is safer, cheaper and cleaner to use a combination of trains, buses, taxis, bikes and motorcycles.

    Anyways, there’s a more in depth analysis of that line of reasoning at http://prfx.wordpress.com/2008/11/15/auto-industry-bailout-part-ii/
    feel free to point out the flaws. I would love to hear what you think.

  2. I took a look at your post and perhaps I am mistaken, but it seems as though you are posting from outside the U.S. Any how, I used to agree with you the first time I lived on the east coast. Then I moved to South Dakota. Places like that, (and there are a lot of them) people don’t really think about when they form an opinion in favor of mass transit. Even places like western P.A. where it would be non cost effective to build through all of the mountains.

    The other thing to remember is Americans don’t like being told they have to wait for anything. You can say what you want about us, but that part is true. When we want to go some where we want to leave and not have to wait for a bus. It’s why the rail industry died off as a form of public transit when the interstates system was put in and why buses only thrive in major city centers now.

  3. As an afterthought. I wasn’t trying to dismiss your idea by asking if you were writing from outside the U.S. I am just pointing out that your perspective seems a little different.

  4. Lol, I was born in Boston raised in Cali, I will choose to consider it a compliment that you think I have an international perspective…. Anyways, I appreciate your responding. It is a nice reality to check and I feel your responses are insightful and serve to balance my own.

    I agree that in places like the Dakotas mass transit or small vehicles do not make a lot of sense. I think the fundamental issue is sprawling, low density population is inefficient from an environmental perspective; but you’re right that we, as Americans, do not like being told what to do, our country was basically founded on that premise.

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