Outsourced Salvation: American Carmakers Need to Open Up A Little

Every day we hear of new companies with new products aimed at automotive efficiency, technology and environmental safety. U.S. automakers’ sprawling bureaucracies, wrought with labor relations issues and rigid production methods, have been exposed. Yet at the same time, the automotive market is now bursting with the “little guys.” Some of these small ventures sell ways to improve gas mileage and research ways to improve the traditional combustion engine. Others are creating their own electric vehicles, and one-off manufacturers like Tesla and Better Place are setting examples to huge automakers.

Recall Better Place CEO Shai Agassi's formula for the crisis in Detroit and the future of electric vehicles: Policy, business model, and the right manufacturing. Specifically, if American automakers adapt their policy and open up to outside sources for their car’s components, their entire business model will adapt to the times, and the “little guy” is allowed to right what’s wrong in Detroit.

Here’s a book report blog—In an article in the June issue of Wired titled "Beyond Detroit," Charles C. Man looks at the problems facing U.S. car companies, and offers up the big picture. The auto industry has so far been exclusive, resisting outside innovation and dictating the manufacturing of its own parts. To survive the evolution to alternative fuels, for instance, automakers will have to let down the bridge and invite the entrepreneurs in, who can then compete to provide the best innovations in technology for parts that can be swapped out and improved upon. In this way, production and manufacturing is revamped, and maybe the Ford Fusion won’t cost so much anymore.

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