Monday, March 30, 2009

Auto empires too 20th century?

Who wants to argue that admen and spin doctors, with their slogans aplenty, didn't have too much say over the consumer-culture, we'll-police-the-world American mindset in the second half of the 20th century?

If there had been an overriding slogan to represent the prevailing thinking of that 50-year period, is there one that could top Bigger is Better?

Growth was god.

"We cannot make the survival of our auto industry dependent on an unending flow of tax dollars," said President Barack Obama.

With the politics of the world having been buffeted about for the first half of the 20th century by the toppling of monarchies and the disintegration of colonial empires, the new concept in empire building was ascending. In many ways the biggest winners of World War Two were those who were at the forefront of building the world's largest multinational corporations.

Yet, while extolling the virtues of competition, the most aggressive corporations pursued strategies that sought to eliminate it. The winners of that bloody business routinely killed off their competitors or gobbled them up through merger.

In the 21st century empires of any kind don't seem to work anymore. The strategy of domination by being gargantuan and far-flung has gotten to be too expensive.

And, from society's standpoint, squelching competition isn't healthy, no matter how it's done. Looking back on it, when Virginia didn't allow regional banks we were better off. There were good reasons to keep banks based in their own communities and insulated from other so-called "financial services."

That lesson has come with a price, we're selling pieces of the future to come up with bailout money. We can only hope we aren't selling more shares of our pie-in-the-sky than can ever exist, as did the protagonists of Mel Brooks' "The Producers."

Whether the panic-driven massive bailouts we've seen in the last few months will look smart 20 years from now is something I don't know. Will President Barack Obama's effort to transform the auto industry look smart 20 months from now?

Don't know about that either, but I wonder. In trying to save Detroit, is Obama beating dead horsepower? Is rescuing General Motors going against the tide of history? Because maybe, like other empires, GM is out of date.

Maybe America needs 25 small, car-building companies to spring up. Not companies with ten divisions that build 50 different models. Not big companies building big cars.

They might be companies that will specialize in building one model, maybe two. Their dealerships might be the size of a convenience store. Most of their customers would order their cars, whatever color they like, online.

If "bigger is better" has gotten to be too 20th century, isn't the concept of "too big to allow them to fail" passé, yet?

-- Art by F.T. Rea

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