12/16/2008 05:12 am ET Updated Dec 06, 2017

Memo to Detroit: Change Now or Die

The "saving" of the American auto industry has become a comedy of errors, a circus with seemingly no good end in sight.

Feeling somewhat helpless about it all, I decided, in that great American business tradition, to send a memo!

Memo - To Rick Wagoner (GM), Alan Mulally (Ford) and Robert Nardelli (Chrysler):

1) You're all fired.

Please leave this memo behind for the new leaders of your companies.

2) America doesn't trust you.

Most Americans think you have brought this disaster upon yourselves, with inferior, irrelevant products the past 35 years.
(Alan Mulally was head of Boeing, a company with one competitor, when he agreed to a near-$20 million signing bonus to take over Ford, which has between 25 and 50 competitors, just in the US alone. William Clay Ford had run the company before hiring Mulally, and the Ford family member admitted after a year or two on the job, and after pledging to make Ford the greenest car company on earth, that he couldn't handle it. And you have to have a certain grudging respect for that).

3) Stop fighting.

Since 1970, when the EPA and NHTSA were created, you have fought tooth-and-nail every advancement and improvement in your industry.

In doing so, you've wasted untold billions of dollars and the efforts of thousands of your smartest and highest-paid employees.

4) Don't build what we don't need.

Shoe-horning your biggest V8 engines into full-size trucks and SUVs, because it was an easy way to make hundreds of millions of dollars, is wrong. And selling them to an audience conditioned to buy them is also wrong.

5) Create a 21st century franchise system along with your dealerships.

Though there's much to be done, a good start is to instill a version of GM's Saturn sales system in your showrooms; that would surely be welcome by car-buyers.
(GM chief Rick Wagoner, left, with Gary Shapiro, head of CES, at the computer group's 2008 conference in Las Vegas. Sharing the stage is GM's Volt plug-in hybrid, now a dead issue with the car-maker, at least until they get an infusion of as much as $22 billion, which some analysts say is the least GM needs to get their corporate ship afloat once again).

6) Forget about the next quarter.

Detroit lives and dies by one quarterly result after another. All your employees, and you, should be thinking of ways to keep your factories open 50 years from now as well as one year.

7) Stop blaming the unions.

Workers build vehicles only as good as their design. Bad designs = bad cars. And new car "blueprints" come from your white-collar employees, not blue-collar.

8) Stop blaming the government.

Yes, government-mandated rules and regulations cost money. But in spite of the cost they've added to cars and trucks, Americans would not give up airbags, anti-lock brakes, traction control, roof standards and rollover protection, improved mileage, lower emissions or all their electronic in-car gadgets for a slightly lower price.

Companies should never automatically rollover to any government, but common sense and our shared futures must be important parts of all Washington/Detroit negotiations.
(Robert Nardelli, hired by Cerberus Capital Management to run Chrysler. There are so many reasons for this man not to be an auto company executive, that I'll share just one with you: He never worked in the auto industry before taking this job. In the interest of full disclosure, Ford's Mulally didn't have any auto experience either, and GM's Wagoner has been in the company's finance department his entire career. Nardelli, though, is clearly out of his element. Cerberus made a great hire in Jim Press, the highest-ranking American at Toyota/Lexus/Scion. But he reports to Nardelli, and I haven't seen his name in a news story in months; he might be fulfilling his contractual obligations to Cerberus - and not much else).

9) Encourage all sides to participate.

The "enthusiast media," those newspapers, magazines, websites and radio and TV shows which are supported by the industry's advertising dollars and which wax rhapsodic about almost every new vehicle, are, to some, important sources of information. But both the auto industry and government have another responsibility in a free society; that is, to fund media outlets which encourage an ongoing national conversation about your industry and its many ancillary parts. Remember that one out of every ten jobs in America is connected in some way to the auto industry; worldwide, that number is one out of every seven manufacturing jobs.

10) If you build it, we will buy.

A great opportunity awaits us on the other side of this crisis; that rare chance to make a fresh start in our lives, schools, corporations and government. We all get a chance to make a difference. And your companies get a chance to build great, relevant cars and trucks.

One person who made a huge difference in the auto industry, and through it, in Japan, the US and the world, and whom you and all your employees can learn from, was Dr. W. Edwards Deming.

His name is worth Googling. Dr. Deming is possibly the most important American that most Americans never heard of.

In Japan, from 1950 onward, he taught top management how to improve design (and thus service), product quality, testing and sales (the last through global markets) through various methods, including the application of statistical methods.
(Dr. Deming and his wife, Lola, in Japan, 1978).

He was, as I called him in several articles written after lengthy interviews and attending his four-day management seminar at UCLA in the mid-1980s, "The American Who Invented Japan."

Despite being considered something of a hero in Japan, Deming was only beginning to win widespread recognition in the US at the time of his death (at age 93 in 1993).

The Detroit Three should study Dr. Deming at every level of your corporations. Teach his theories and instill his methodologies into action at every level of GM, Ford and Chrysler (spoken like a true believer, right?).

We'll have more memos for you in the future, Detroit Three, so stop by often. And good luck; remember, we're here to support you as soon as those first new and safe high-mileage cars and trucks roll out of those brand-new and retro-fitted, modernized factories of yours.

And if by that time you've merged into the Detroit One, we'd be happy with that, too. Our patriotism knows no bounds; just build relevant vehicles, and never take us, your potential customers, for granted.

And readers, let us know what we may have failed to mention, as well as where you think we're wrong. And answer this: Why do you think Congress and the White House agreed to fund the $700 billion bailout for Wall Street, but can't seem to find the money for Detroit, even though the action was approved last December?