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We are losing market share faster than water passing through a sieve, and nobody is even talking about it!
Americans have got a real bad habit of sweeping unpleasant realities under the carpet and pretending that they don’t exist in order to placate the more bone-headed sectors of society. Anybody who insists on addressing real problems is accused of being disloyal.
In just the last couple of weeks, problems which have taken decades to develop have sprung up and confronted us with the unpleasant semblance of digestive gases bubbling up to the surface of the bathtub and exploding into the atmosphere in a general stink of toxic pollution.
General Motors has announced multiple plant closings and massive layoffs, and has sunk to second place in world automobile manufacturing, behind Toyota. Their bond rating has sunk to junk bond status, with no prospect of recovery.
Boeing has fallen behind Airbus and sunk to number two in aircraft production.
These news items, instead of setting off alarm bells of frenzied debate, are being accepted with Pollyannish expressions of placid equanimity by the processed cheese commentators who force-feed us the establishment interpretation of the news, as though this were the natural order of things and we are living in the best of all possible worlds.
Everywhere you look, our act is falling apart. National leaders are dodging blame for 9/11 with the excuse that, hey, the game changed and we only found out about it after New York blew up!
We still have not got a grip on foreign intelligence because nobody with the language skills or knowledge of foreign cultures can pass the security clearances. (Imagine where Israel, where fifty per-cent of the population comes from Arab countries, would be if the only people accepted into their intelligence services were Yale graduates!)
I had a good career going as an accessory designer for many years, until globalization hit the handbag and belt industries in the mid-1990’s, when all the production jobs moved to China. Overnight I became over-qualified for the chickenfeed jobs being offered in the New York market – nobody wanted to hire me because I was overqualified, too authoritative, knew too much, was too expensive. Unlike a lot of people in my position who just slinked out of New York to that elephant’s graveyard of redundancy, Vermont, and took menial jobs, I fought back.
I still had some resources to go back to school and re-tool myself. But it was touch-and-go, and I was miserable. I was young and fit, used to wielding authority, and now I was back in school with a bunch of dorks. Ooooh My Gawd!
Right about this time, Airbus Industries announced a program to develop the A-380 jumbo passenger jet, capable of transporting up to 700 passengers on long haul trajectories. Meanwhile, Boeing was staying with the 747, which was already ancient at that time.
The worst of it was, the concept of a two-level jumbo passenger jet had been developed in a study commissioned by…Boeing, who decided not to go forward with it, so Airbus decided to run with it instead!
This was way before blogs had been invented, so I had to express my astonishment verbally to my girlfriend, Magpie, who accused me of disloyalty for criticizing the American corporate style of decision making (she is a fanatical corporatist).
Airbus went ahead big-time, creating a whole new city outside of Toulouse, France, for A-380 production and generating thousands of new jobs. The order book for the A-380 is filling up, and they are looking to do massive business, especially in the orient, where there are a lot of people to move around.
The A-380 is not Airbus’ main item. Its big sellers are the A-330, A-340 and A-350 but the A-380 is its showcase item, demonstrating that Airbus is moving ahead with new concepts.
Not to impugn Boeing, they have got a beautiful item with the 787 Dreamliner, which is selling well. But it is a conventional product, a result of safe decision making. When the world finally gets used to the concept of a huge mega-jet, the A-380 will take over.
If planes are getting bigger, cars are getting smaller. I recently took a vacation in the Dominican Republic, where gas sells for $8.00 a gallon and the average monthly wage is $200. Even though the DR is only a couple of hundred miles from our border, I did not see one American car the whole time I was there. The whole market in that country has been taken over by Japan!
Outside of North America, the world is looking for fuel economy, and the Japanese are filling that demand. Even assuming that Americans are going to continue to demand dinosaur cars, you would think that some Detroit executives would consider developing some cool, small cars for the export market.
Or would they? Maybe the decision-making process in Detroit is so sclerotic that nobody would DREAM of rocking the boat by suggesting a radical departure from industry orthodoxy, for fear of being considered a lunatic and losing his job.
Meantime, the decline goes on.
At the end of World War II, the U.S. counted for more than half of world industrial production. Now we are down to a quarter. The Japanese and the Europeans are not geniuses – they study us, they learn from our successes and they profit from our missteps. They chisel away from us in minuscule amounts on a day-to-day basis. But they are helped by the atrophy that has set in among our own managerial elite, the tendency to play it safe, even when incremental steps toward innovation are clearly necessary.
How is it that Bombardier Corp. of Quebec has progressed in thirty years from a manufacturer of snowmobiles to one of bullet trains, while this country, with all our capital and scientific institutions, has not got one modern train manufacturer? How did the Canadians, who hate to work, come up with the Blackberry, having stolen (oh yeah!) all the technology from us? How come we only have one mobile phone manufacturer, Motorola, and the Japanese and Europeans have run away with that market?
Have we gotten out of the habit of working, or is that too simplistic a response and the real problem lies in our management model?
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Posted on 1/2/2006
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