US carmakers: A Clear Message to Innovate and Survive

US government recently provided financial assistance to GM and Chrysler. However, the companies must come out with a survival plan by the end of March 2009. And many consider this as a last chance for the survival of the domestic auto companies. Many conceive this as a chance for America to lead the world in technologies and manufacturing management related to automobiles. The Big three must agree to make only cars that are fuel efficient enough to get at least 50 MPG by 2011, 75 MPG by 2013 and 100 MPG by 2015. Failing to do that, the companies should go into bankruptcy and fend for themselves like all the other businesses that are having trouble.

American lawmakers interestingly have at least invented a new concept of ‘Car Czar‘ who knows how to spend the bailout money. According one expert, the ideal candidate for holding the position of Car Czar “would possess the manufacturing skills of Lee Iacocca, former president and CEO of Chrysler, who is credited with reviving the company; have the retail abilities of Michael Jackson, CEO of AutoNation, the largest chain of auto dealerships in the country; and have the diplomatic skills of former Secretary of State Henry Kissinger to negotiate with the auto unions “to realign and restructure their compensation and benefits package to enable domestic manufactures to be competitive.” Is US or for that matter the auto world having one such superman? I wish US finds one. There are hopes in two other innovative concepts: Better Place and Automotive X Prize.

Better Place is a new model for power distribution to replace the old model of gas stations that supported the evolution of the automobile to this point. Better Place’s revolutionary concept for distribution of power to vehicles actually lowers the price of the vehicle by making the battery free to the consumer and automaker, while a subscription allows the user to only pay for miles traveled. As reported, Better Place is taking hold in countries around the world and in some areas of the US.

The Automotive X Prize is a race of 100MPG vehicles across America in 2010 sponsored by the Progressive Insurance Company. As reported, “There are many entries. These cars must be safe and have a business plan that allows for at least 10,000 units per year. Automotive X prize contenders need to share their knowledge with the Car Czar.”

“Lincvolt, an X Prize contestant, is a 2.5 ton, 19.5 foot American classic now attaining 65 MPG utilizing electricity and domestic fuel. The converted 1959 Lincoln Continental MK IV demonstrates that today’s big sedans SUVs and pick-up trucks can get at least 50 MPG if they are fuel-efficient and use electric power, making it obvious that smaller cars could do even better than that. Ultimately, the Lincvolt team aims to demonstrate a Lincvolt hydro bio-electric series hybrid that will attain 100MPG with domestic fuels and very low emissions. In February, Lincvolt will begin an historic drive to Washington to showcase “the people’s fuel,”

Can America take back the reins of innovation and show the true wave of the future? Will America be able to lead the world?

It gives one in automobile industry a wonderful feeling seeing that happen. I wish the technocrats and managers of other developed and developing nations would have participated in the project.

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