Not That Complicated, Really

I read two different news stories this morning that rather amazed me in the complete cluelessness being displayed. One was an article in the Washington Post with one of the vice-chairmen from General Motors talking about how hybrid vehicles are primarily important because of image, and how the introduction of the Prius made everyone think that Toyota was now a completely green company and brought people flocking to their dealerships. The other was a piece from Bloomberg Online about how the airline industry stands to lose $9 billion this year because the downturn in the economy has forced travelers to find cheaper ways of getting where they are going. I haven’t seen so much denial since the last time I accidentally tuned into the Jerry Springer show…

In the case of the car companies, the reason the U.S. automakers are in crisis right now (two of the three are in bankruptcy) is not just because somebody else brought alternative fuel vehicles to market first. I’m not denying that this was a factor; it says something about the current crisis that the only U.S. automobile company that has introduced hybrid technology (and actually sold significant numbers of hybrid vehicles) is the only one not in bankruptcy. But the real problem is that while the rest of the world was working on ways to build reliable cars at lower and lower prices, the U.S. automobile companies were perfecting the concept of “planned obsolescence” to force their customers to replace their cars every three years – or before the cars turned into terrariums. Everyone points to the Hummer’s 10 miles per gallon fuel economy as being what killed the brand (and its parent company); I would argue that the fact that the blasted things will never make it to 100,000 miles is a larger factor…

Similarly, the airlines are blaming fuel costs and lower disposable incomes for their operational and financial issues. These certainly have not helped; people who can’t afford to make the payments on their houses and cars are not going to spend money on airline tickets to exotic destinations, especially when the price of those tickets keeps rising. But the fact that modern air travel has become nightmarish even for those people who can fit into a standard airline seat (and even worse for those of us who can’t) is definitely a factor, and so are the preposterous “airport security” measures that can’t prevent two knuckleheads from just bribing an employee to bring a gun onto an airplane. Nor can the airlines deny responsibility for those conditions; if the airlines hadn’t fought tooth and nail against sensible security for generations, the 9/11 attacks might not have happened, and we wouldn’t all be taking off our shoes, belts and underwear every time we fly…

The unfortunate truth, in this case, is that these two industries have not been undone by environmental conditions, competitors, costs or regulations; they’ve created their own crises through their own efforts, and the only way they are going to get out of them is by changing their ways. A few thousand Chevy Volts are not going to change GM’s fortunes; building cars that people actually want to purchase will, and that’s going to mean developing models that are both durable and affordable that also get competitive gas mileage. Charging extra for checked baggage is not going to save the airlines; it’s just going to annoy more people and decrease their business even further. Greater convenience, reliability and comfort will reverse the trend – if they can make those changes in time…

I get impatient with people, sometimes, for assuming that the manager’s role is easy, and that any business problem can be hashed out in 46 minutes of prime time (allowing for the commercials, of course), but in this case I honestly have to say that the problems threatening to tank two major sectors of American commerce are not really that complicated…