
Letter to Obama: What the Car Industry Needs Is A Steve Jobs - jasonlbaptiste
http://www.techcrunch.com/2009/02/22/letter-to-obama-what-the-car-industry-needs-is-a-steve-jobs/
======
makecheck
The article suggests Jobs himself be in charge of these companies. But it
would be a step in the right direction for a manager to simply observe what
Jobs did when he first returned to Apple.

In particular, Jobs axed all the different Mac models being developed, and
made a single compelling product: the iMac. This focused the business, and
created a market.

It wouldn't take Jobs himself to do this with automakers. In fact, it hasn't;
just look at something like the redesigned VW Beetle, or the Mini Cooper, both
the iMacs of their markets.

~~~
electromagnetic
The other thing Automakers haven't got yet is that like 80% of people want a
cheap fuel efficient vehicle. I would rather pay $4000 for a vehicle and have
nothing except a 4* safety rating than pay $20,000 have a 4* average safety
rating with a bajillion gadgets all priced at like $500 for something that
costs $5 max to make.

Everybody on the fucking planet knows a 5 disc CD player with a line-in
doesn't cost $500 to install because they're on sale for anywhere between 30
and 60 at any store selling anything remotely vehicular.

~~~
tlb
The numbers say otherwise. 51% of all vehicles sold in the US in December 2008
were pickups or SUVs. [1] Average vehicle sales price is $25,000 [2], despite
the existence of nice cheap fuel-efficient cars like the Yaris at $12,000.

Dagres' suggestion that cars should be more about electronic gadgets is
wrongheaded. Cars last 10 years, gadgets are obsolete after 3. You want a car
+ an iPhone, the second of which you'll upgrade several times.

[1]
[http://www.bizjournals.com/albany/stories/2009/01/12/story1....](http://www.bizjournals.com/albany/stories/2009/01/12/story1.html)

[2]
[http://www.nydailynews.com/money/2008/09/04/2008-09-04__anal...](http://www.nydailynews.com/money/2008/09/04/2008-09-04__analysts_vehicle_prices_falling_at_rapi-2.html)

~~~
anamax
> The numbers say otherwise. 51% of all vehicles sold in the US in December
> 2008 were pickups or SUVs. [1] Average vehicle sales price is $25,000 [2],
> despite the existence of nice cheap fuel-efficient cars like the Yaris at
> $12,000.

Actually, the numbers don't say that.

If you only have one car, that car has to satisfy almost all of your car
needs. The Yaris doesn't for a lot of people. (The Scion xB does for a lot
more people.)

If you're going to buy an "extra" car for its mileage, it has to be cost less
than the amount of money that you save by using it instead of your "all uses"
car. A $12k extra car usually doesn't do that.

A 10mpg vehicle will use 10k gallons over 100k. A 15mpg vehicle uses 6.6k
gallons. A 20mpg vehicle uses 5k gallons, 30mpg uses 3.3k, a 40mpg vehicle
uses 2.5k, and a 50mpg vehicle uses 2k gallons.

At $4/g, the 10mpg vehicle's gas costs $40k, the 15mpg vehicle's gas costs
$26.6k, the 20mpg vehicle's gas costs $20k, 30mpg costs $13k, the 40mpg
vehicle's gas costs $10k, and the 50mpg vehicle's gas costs $8k.

Note that gas isn't the only cost - the "gas saver" extra car also has
license/registration, insurance, maintenance, time value of money (the gas
cost is over time while the purchase cost either isn't, or requires paying
interest), etc.

So, if you're already getting 15mpg, the gas savings from an extra vehicle
that gets 40mpg are considerably less than $12k.

If you're already getting 20mpg, it's even harder to save money by buying an
extra vehicle.

In other words, the guy who wanted a $4k gas saver may have been at the upper
end of economic sense - the "extra car to save gas" probably needs to be less
than $3k.

Yes, the ability to "rent" big vehicles for occasional usage can let people
have smaller "main" cars, but only if the rental cost is sufficiently low. I
note that the zip car people seem to have gone the other direction. Hertz and
the like charge a significant premium for big vehicles.

And the loss of flexibility is important. I can (and have) gone diving with 15
minutes notice. If I had to rent a car....

And, yes, many families have multiple vehicles. They still have to satisfy
simultaneous users so the above analysis applies. (Yes, many can, and do, make
do with a "big" and "medium", but that means that a 3rd vehicle to save gas
must cost even less than the above suggests because they're already using the
big vehicle less than their average.)

~~~
electromagnetic
I _want_ a vehicle that costs $4,000 and does moderate-good mileage with good
safety. It could be a possibility with Tata Motors buying out brands like
Jaguar and Land Rover. They have a vehicle that fills this criteria selling
for $2,500.

I know, however, that if I'm spending $12,000 on a Yaris, $25,000 on your
basic sedan or $35,000 on a Ford F-150 what am I going to choose? Well I'm
going with the F-150 (or other truck) because the amount it'll cost me to do
'extra' things with a car is going to cost me more than it saves to buy a
truck. I've worked in construction, which means any work on my own house is
going to be done with my two hands and everything I use needs to be loaded
into my truck.

If there was a car for $4,000 I'd probably get it and suffer with renting a
U-Haul every time I wanted to do something, but over the run of 10 years
U-Haul's will add up way past the $10,000 difference between a truck and a
sedan.

------
browngeek
What the car industry needs is a reboot.

The 1908 Ford Model T had a 4-cylinder engine, ran on 4 wheels, used gasoline,
with a mileage of 20mpg. A hundred years later, the basics are still the same.
Why put billions more in a dead-end industry?

The government should instead invest in new ways of building cars. Like the
Aptera 2e (<http://en.wikipedia.org/wiki/Aptera_hybrid_car>) which is
fundamentally changing the way a car is built. Or Tesla. Or Zap.

Forget the Big 3. Create the Small 300.

~~~
tlb
I'm #1607 on the waiting list for an Aptera. I signed up because I had
complained so often that there was no electric car you could actually buy, and
people kept telling me I just didn't try hard enough. So far I'm right, and I
predict I'll never actually get mine. When the CEO brags that they have 45
circuit boards [1], I can already read the company's obituary. But maybe
they'll pull it off, and I'll have a really snazzy car.

I'm more excited about Mission Motors electric motorcycle.
<http://www.ridemission.com/>. (I'm an investor.) It's breathtakingly fast and
fun to ride.

[1] [http://earth2tech.com/2008/10/01/aptera-tweaking-electric-
ve...](http://earth2tech.com/2008/10/01/aptera-tweaking-electric-vehicle-
design-moving-on-up/)

~~~
RKlophaus
45 circuit boards? Maybe what the car industry needs is not a Steve Jobs, but
rather a Steve Wozniak.

Woz figured out how to drastically minimize the number of hardware components
on the Apple II. He could cut those 45 circuit boards down to 4.

------
vaksel
What the car industry needs is a restructuring.

Let them go bankrupt and sell off useless assets. There is no need for them to
make 3 different versions of the same car for 3 different brands.

Then they need to stop making 50 million different options. There is
absolutely no reason to make cars completely customizable. Consumer confusion
is not a good thing. All you need is 3 trims, a) DX model - the cheapest model
available lacks the premium features(cd changer, heated seats, power windows)
b) LX model - has all the missing parts c) EX model - has the premium features
like bigger wheels, heated mirrors etc.

Then they need to start closing off dealerships, this isn't starbucks where
the price is fixed, your dealers are negotiating prices, when you have 2
dealers, a block from each other, your average car price goes down, which
hurts your resale values.

------
calambrac
And a pony.

Isn't this like saying poor people need money and hungry people need food? Are
we really giving our attention to someone saying, "The solution is to fix
it!"?

And maybe this guy didn't notice, but at least one of the American auto
companies, Ford, actually has some pretty competent management. They're
dealing with their union problems and investing in sustainable technologies
(both in the vehicles they produces and the way they produce them), and Fords
these days suck quite a bit less than other American brands.

------
alexbosworth
This is pretty link-baitey even for Techcrunch let alone Hacker News

Ford's current CEO Alan Mulally is actually pretty good - I met him when he
was still director of engineering for the 777 - under him Ford has made some
good moves, such as building a large capital base just before the credit
crunch hit.

Ford also already makes some good cars, they just don't sell them in the US -
they need to pull some EU models over to the states

------
kyochan
I would like to see Steve Jobs deal with CAFE standards and union contracts.

GM doesn't need help creating high-end products either (see ZR-1, G8, CTS-V,
etc. the marketing needs improvement though), so can jobs design and market
the car equivalent of a Netbook?

~~~
access_denied
Here in Germany we have very strong unions. The system we have here would be
called communism by right-wing american standards. In Europe we call it social
capitalism.

With this system, we are building the best cars in the world for decades. I am
sure Steve Jobs could manage a Porsche successful, within the european system.

~~~
kyochan
Porsche is a low volume automaker in America so they are exempt from CAFE
standards. They also only sell high margin vehicles so they can take the high
labor costs.

The issue is not GM being unable to build the best cars in the world (compare
Corvette ZR-1 to a 911 GT2), it's the lousy way they approach CAFE standards
(Aveo, Cobalt). Can Porsche design and market a car that goes 35 mpg?

~~~
anamax
> Can Porsche design and market a car that goes 35 mpg?

And costs less than $20k out the door.

VW Brazil can, but those aren't German workers.

~~~
access_denied
The different parts for computers and cars come from all over the world.

~~~
anamax
Yes, but that doesn't mean that the parts come from anywhere or that they can
be assembled anywhere for the same amount of money.

------
MaysonL
Why, when it already has Shai Agassi?

See <http://www.betterplace.com/>

------
bianco
What american car industry needs is european or japanese or korean spirit. Any
of the mentioned industries invested much more in development than the
american one, which slept for too long (at least the big ones).

This was the conclusion of someone I talked to, working in that exact
industry.

