
Saturn deal is called a new business model - rglovejoy
http://www.freep.com/article/20090606/BUSINESS01/906060412
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JimmyL
I guess the new business model being presented is the dealer network owning
the company (as opposed to the other way around), and the "company" being
centered on design and marketing, as opposed to manufacturing. In some ways -
but on a larger and more expensive scale - it reminds me of how the computer
industry changed from corporate-owned manufacturing, to everyone using four or
five no-name companies in Taiwan for everything. It worked out pretty well for
the major players in that industry (Dell, Compaq, Apple, etc.), so I wonder
how it will work out for cars.

I'm not sure, however, how it will work out with the labour situation for
factories (I'm thinking long-term, once their two-year contract with GM
expires). In order to make this work, you'll have to have some free-standing
auto plants willing to bid for the contracts to build the cars; an industry
which doesn't currently exist (almost all auto factories are owned by car
manufacturers). Conventional economics says that in order to get prices down
with this process, you'd have to have competition in the bidding process for
these plants, but I'm not convinced that there would be enough (any) plants
who would bid for them. I'm also not sure how the existing supplier network
would work out, and how they'd stay in business.

All-in, it will be interesting how this shakes out over the next five to ten
years - if it works, it's got the potential to change how the industry works.

