Today GM and Chrysler are approaching the US Treasury for more aid. They have been preparing their case to prove that they need more money to survive in the current economy, and that they are being responsible in cutting costs, headcount, and negotiating with the unions and creditors.
This leads me to a question. What are they going to make? Before you roll your eyes thinking "of course they'll make cars", hear me out. In reading about what it is they are going to do differently, I have not read anything about how they are going to ensure that the cars they make will appeal to the people they most desperately need to buy them. I know they have a mandate to make more energy efficient cars, but that is a technology. What type of car - or should I say, motorized people mover - will the new technology be powering? Who are the people who will buy these cars, what do they need, and how do GM and Chrysler plan to meet those needs?
Simply cutting costs, or investing in technology is not enough. The car companies are in trouble because they were not able to make cars that people wanted. Yes, consumer needs changed quickly, and another part of their plan should focus on how they will be more flexible and responsive to rapidly changing conditions.
These are things that will enable long-term success for any company. Yet today, we continue to see focus on operational efficiency, cost cutting, and investment in technology without a holistic sense of purpose. At the end of the day, the wrong product is still the wrong product, regardless of its technical superiority or efficient production.
Let's hope the answers to the questions I'm posing are buried somewhere in the 100 page report that will be presented today, but I suspect they are not. As part of a network of people who make their living solving problems like this, I can tell you that car companies are not among the new clients calling.