When General Motors and Chrysler declared bankruptcy, a series of questions flooded my head. I questioned the concept of mass industrialization, and what drove companies to maximize profit for their shareholders. Were corporations legally bound to maximizing profits (they aren’t). The laws of supply and demand, of mass surplus and car banks seemed to encapsulate an entire generation of flawed business direction.
In fact, in my mind, the bureaucracy of the automotive industry was a metaphor for the seismic meltdown we’ve felt throughout the global recession. Opinions appropriately associated with the process:
- Slow and lumbering decision making
- “Analysis paralysis” of innovative new products
- Fear of risk taking
All of this resulted in a homogeneous product that couldn’t distinguish itself outside of the ever growing competitive set that now included vehicles from Japan, Germany, and Korea.
So when bankruptcy occurred, there was a real opportunity to rethink the way these companies manufactured products. Unfortunately, the bail out money allowed the big 2.5 an opportunity to live another day without the ramifications or desire to rethink the process.
While Chrysler is yet to announce its plan to profitability (rumored to be delivered by CEO Sergio Marchionne sometime over the next few weeks), GM has laid its cards on the table. Sure they shed Hummer (allegedly) and will be shutting down Pontiac and Saturn, but while the brands that needed to close did indeed close, the process remains the same.
Enter Local Motors, a new means of sourcing, producing and deciding how a car is manufactured. Local Motors uses an open source model, empowering their community of advocates with the ability to determine what is verses what isn’t a desirable product. As the above video demonstrates, their model is built on agility, innovation, and a commitment to communication. Local Motors utilizes hundreds of designers and engineers from throughout the world to help them build a vehicle with true global appeal.
Whether a process like open source vehicle development is scalable is yet to be proven as a model. But, what we do know, is the concept of mass industrialization needs to change. The long tail may be shorter in the context of automotive manufacturing, but never the less, consumer choice has left the domestic manufacturers with a fight they never saw coming: the fight for the admiration of their customers.