Thomas L. Friedman is one of my favorite columnists.  He is author of The World is Flat and Hot Flat and Crowded.  His ideas on fixing the auto industry are almost identical to mine. This column appeared in the New York Times and I have copied it here.  He is so correct when he points out that Steve Jobs would be the right man to fix G.M.  Congressional efforts to save the auto industry  may have to wait until Barack Obama is president.

How to Fix a Flat

Published: November 11, 2008

Last September, I was in a hotel room watching CNBC early one morning. They were interviewing Bob Nardelli, the C.E.O. of Chrysler, and he was explaining why the auto industry, at that time, needed $25 billion in loan guarantees. It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?

How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.

This included striking special deals with Congress that allowed the Detroit automakers to count the mileage of gas guzzlers as being more than they really were — provided they made some cars flex-fuel capable for ethanol. It included special offers of $1.99-a-gallon gasoline for a year to any customer who purchased a gas guzzler. And it included endless lobbying to block Congress from raising the miles-per-gallon requirements. The result was an industry that became brain dead.

Nothing typified this more than statements like those of Bob Lutz, G.M.’s vice chairman. He has been quoted as saying that hybrids like the Toyota Prius “make no economic sense.” And, in February, D Magazine of Dallas quoted him as saying that global warming “is a total crock of [expletive].”

These are the guys taxpayers are being asked to bail out.

And please, spare me the alligator tears about G.M.’s health care costs. Sure, they are outrageous. “But then why did G.M. refuse to lift a finger to support a national health care program when Hillary Clinton was pushing for it?” asks Dan Becker, a top environmental lobbyist.

Not every automaker is at death’s door. Look at this article that ran two weeks ago on autochannel.com: “ALLISTON, Ontario, Canada — Honda of Canada Mfg. officially opened its newest investment in Canada — a state-of-the art $154 million engine plant. The new facility will produce 200,000 fuel-efficient four-cylinder engines annually for Civic production in response to growing North American demand for vehicles that provide excellent fuel economy.”

The blame for this travesty not only belongs to the auto executives, but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom, year after year, voted however the Detroit automakers and unions instructed them to vote. That shielded General Motors, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt long ago.

Indeed, if and when they do have to bury Detroit, I hope that all the current and past representatives and senators from Michigan have to serve as pallbearers. And no one has earned the “honor” of chief pallbearer more than the Michigan Representative John Dingell, the chairman of the House Energy and Commerce Committee who is more responsible for protecting Detroit to death than any single legislator.

O.K., now that I have all that off my chest, what do we do? I am as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse. But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.

“In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company … Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”

I would add other conditions: Any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol.

Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.

A version of this article appeared in print on November 12, 2008, on page A31 of the New York edition.

Fortune Magazine is my second favorite business periodical.  My first choice is Business Week.  Fortune has been telling all of us who the biggest corporations (The Fortune 500) are in the whole world for decades..  The magazine has offered interviews with many of the world’s wealthiest people.  Recently I found a Fortune Magazine book mark that offered these 3 Skills You Can Improve Right Now.

Improving these business skills can have a big impact on your career.

1) PUBLIC SPEAKING

Conquer fear with a game plan.

·       Podiums disconnect you from the audience.  Grab the mike and wander the stage.

·       Eye contact is your friend.  Looking at people one by one shrinks the room.

·       Questions.  If you stumped, talk about your team: “We’re lucky to have an expert on that.  I’ll get you in touch with him later.”

2) NEGOTIATING SKILLS

Using the right phrases matters.

·       How did you come up with that number?  Opens a window into the other side’s thoughts.

·       Let me check with my wife. Or husband or boss.  Stops you from saying yes prematurely.

·       If things change give me a call.  Put the burden on them.

3)  MEMORY SKILLS

Never confuse Don with John again.

·       Introduce yourself first so you can focus on the other person.

·       Connect he name to your brain.  When you meet a guy named Bill, think of other Bills you know.

·       Use the name three times. Once to confirm you have the name right, then in mid-conversation, and again when you say good-bye.

In the 1950s General Motors sales exceeded 50% of total auto sales in the United States. Imported cars amounted to only small percentage of that total. By 1992 the Ford Taurus was the best selling car and Honda was on its tail.  In 1995 all the American car companies were feeling quite successful despite the growing size of Japanese imports.  Today the “Big Three” is on the verge of becoming the “Little Two” as more and more Americans buy cars from foreign manufacturers.

At the same time as cars are coming from foreign manufacturers we have seen appliances, clothing, and almost everything else we buy come from other nations.  The manufacturing base of our nation has deteriorated to such an extent that the population of our Midwestern industrial complex has no place to work.  This has been the result of big corporations moving their manufacturing to other nations that have lower labor costs.  Unfortunately American car manufacturers are not in that category.  They are failing due to the second rate quality of their cars.  Quality of products has been a big issue for American manufacturers.  We used to laugh at the inferior quality of Japanese goods and they have more than overcome that stigma.  China is now going through a similar phase and it’s likely they too will overcome their quality issues.  Many United States manufacturers have not yet address the issue of quality. 

I know.  I worked for American manufacturers for 45 years.  There were always new quality programs being installed.  Most of them really did not work.  The reason is that the workers themselves were not devoted to producing quality products.  This is not a government issue.  A free society does not enable government interference in private enterprise.  Government can encourage job development though tax incentives but cannot involve itself in the operation of any company.

Michael E. Porter, a Harvard Business School authority on American competitiveness suggests in a Business Week article that the United States needs a long term strategy to resusitate our manufacturing prowess.  I believe he is correct.  The problem is that our government lacks the will to develop this plan.  The reason is that lobbyists and special interests have more influence on Congress than the real needs of our nation.

I intend to write about U.S. manufacturing and competitiveness in many of my future blog entries.

There is not a country in the world that has thrived without an agricultural, mining or manufacturing base.  Today those nations include China, Taiwan, Japan, Germany, Russia, and Iran, Brazil, and Canada.  The United States is part of that group too but this nation has seen a significant decline in its manufacturing.  Charlie Gibson on ABC News was reporting from Racine, Wisconsin when he pointed out that the town has always been a manufacturing town.  The problem is that the United States has been shedding manufacturing jobs for many years.

If you look at the GDP over the years going back to 1967 you find that manufacturing as a percentage of the total has continuously declined.  In that year manufacturing was 25.2% of GDP.  By 1987 manufacturing had declined to 17.1 %. That was not the end of the decline as it was down to less than 12% in 2005.

When I was in college in the early 1960s there were 30 million people in labor unions.  Today the number has declined to 15 million.  The reason is the shedding of manufacturing jobs.

Automobile manufacturing has been one of the industries that personifies American manufacturing know how.  The problem is that the Japanese, the Germans, and others have taken the lead from the American companies.  It’s no wonder.  The auto manufacturers in those countries have delivered cars with better quality and higher gasoline efficiency.  General Motors share of the U.S. market in 1954 was 54% and imports were play things for the rich.  The VW would not arrive in significant numbers until 1955.  We all know what happened next.  Japan developed superior quality control and that made the names Honda and Toyota synonymous with the word quality.  I remember asking an employee of mine in 1983, after he had completed his assignment, “Is that Toyota quality?”   

Unless the United States returns to its manufacturing roots and does it better than the rest our nation is in for a very difficult 21^st century.