Editorial


 

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Detroits Demise--What Goes Up Must Come Down

By: Brad Kuvin

Friday, May 01, 2009
 
Manufacturers must take risks, innovate and evolve, or they will not last. Yet, evolving saps energy and requires investment, to fund development work and prop up marketing and sales efforts. The manufacturing companies that understand this concept and continually invest in themselves are those that survive the generations, and those that will survive the current crisis.

Yet, few U.S. companies get to celebrate 100 years in business, no matter how well they are run. And, even fewer can point to a legacy of innovation that comes close to that of General Motors, a company that not only changed the way the entire product design and manufacturing process transpires, but which improved our way of life—for decades. Once in a lifetime we might hope to experience a company that so saturates itself with leadership and expertise that it can teach whole generations of industries and businesses better ways of doing things. So, last September when General Motors celebrated its 100th birthday, several authors recounted the company’s glorious history of innovation and its impact on American life and business.

“It was GM which perfected vertical integration, and taught generations of companies how to create consumer demand for products through marketing innovations,” said Michael Marsden, an expert on the automobile and American culture quoted in a Detroit News article written by David Phillips. “GM established the industry’s first styling department…and established the first automotive proving grounds and first research department,” added history professor Charles Hyde.

It’s important, too, to remember that GM’s influence reached far beyond the automotive industry, for it was GM (Delco) engineers that helped bring electricity to rural America, and, wrote Phillips, “GM engineers created the gyroscope that guided man to the moon, as well as the lunar rover that later allowed man to traverse the moon.”

That General Motors and Chrysler stood atop the world’s industrial complex for as long as they did, and played such a vital role in the history of civilization, is, quite frankly, nothing short of incredible. For Chrysler’s part, its engineers are credited with developing on-board computers and electronic feedback for ignition timing; early use of aluminum in cars as a weight-saver; the all-electric window lift; stamped aluminum wheels; four-wheel antilock brakes; and, yes, even cup holders.

Today it’s become all too easy to take shots at GM and Chrysler, the once great giants now on their knees, begging for mercy. Yes, the legacy of mistakes has been well documented. So, while it’s okay to blame GM and Chrysler management for the current crisis spanning the supply chain, it’s also important to put the crisis in proper context. Simply: We all should have seen this coming. Companies do not last forever, GM included. As strong as the mighty Detroit giants were, time catches up. And so, suppliers with all of their eggs in the huge Detroit basket must not be shocked when the basket unweaves. Remember—it’s much easier to gain on, and eventually pass, the leader of the pack than it is to continue to extend or even maintain the lead. It was inevitable that GM and Chrysler be caught and passed, and now we’re left to see how far behind they fall. Or, even if they have any legs left at all to run on.

What is to be learned? Companies at every level—from GM and Chrysler all the way down to the tiny supplier—must continue to lead by taking risks, by innovating, and by noting and immediately responding to changes in the marketplace. This is where we are at this moment.

Make sure your company is equipped to respond to the challenges it faces. Do not accept fate. Take risks. Innovate. That’s the only recipe for moving forward.

 


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