Healthy Innovation

Like people, companies tend not to make any substantive changes in behavior until it’s almost too late.

Like people, companies tend not to make any substantive changes in behavior until it’s almost too late. Resolutions easily made just as easily go by the wayside. For most automakers, significant change occurs when they are on a stretcher, and bleeding red ink. Despite chronic weakness, all available energy is mustered to rally forward toward health with new, often daring, product the likes of which never would have been approved for production before illness arrived. Once healthy again, sclerosis sets in, and innovations are neglected. An odd thing, really, considering that it is when the OEM is healthy that it is better able to absorb the shocks and setbacks that often come with innovation.

In the 1950s and 1960s, General Motors was the strongest automaker in the world – and one unafraid of innovation. I can remember overhead cam inline sixes at Pontiac, the rear-engine Corvair at Chevrolet, a turbocharged 3.5-liter aluminum “Jetfire” V8 at Oldsmobile, large front-drive luxury coupes when everything in the segment was rear-drive, and many other interesting production vehicles. Each pushed the boundaries, expanded the knowledge of the corporation, and when combined with GM’s less adventurous offerings, overlapped the market in a way that kept the company prepared for almost any eventuality. Had the process continued, is there any doubt that it would have been GM, not Toyota, who would have introduced a hybrid powertrain to the market?

Unfortunately, the shift toward ever -greater efficiency forced these projects to go underground, then disappear. And, for a while, profits increased as complexity decreased. Call it efficiency’s perverse short-term side effect. But it wasn’t long before the competition started to chip away at segments where the newly efficient GM was underrepresented, or absent. Toe holds were gained, and soon the competition was carrying off customers. Thanks to its size, it took a long time before GM was wheeled into the operating room, fighting for its life.

Now back on the road to redemption, GM is expanding its offerings, but doing so through the rebadging of other automaker’s wares. Unwilling to carry the cost of developing a small, turbocharged engine mated to all-wheel-drive, GM tapped Subaru to provide this technology to Saab, though Chevrolet or Pontiac are in desperate need of a sport compact capable of reducing young buyers’ fealty to Honda’s Civic. Confident of the need to play in the entry-level arena, it sells Suzukis and Daewoos as Chevrolets while moving its domestic small car upmarket. The only thing missing is the internalization of the knowledge needed to create these vehicles. And that lack of know-how could, in the end, prove fatal. After all, though it may be efficient, no one ever got healthy by having someone else exercise for them.

As health returns to the domestic automakers, I’d like to see them resolve to expand their lineups with niche vehicles and niche technology. Put a few thousand diesels into the national fleet, and not just into SUVs. Offer an efficient luxury V10 by adding cylinders (and cylinder deactivation technology) to the best V8 they have. Adapt a small-to-medium front-drive platform to rear-drive, and create a family of new vehicles nobody else has in their portfolio. And, from all of this, learn to shuffle the building blocks in ways never imagined. Like the proverbial apple a day, it will do more to save money and keep the companies healthy than anything else they might possibly do.

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