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Need One Goal: Build the Best!

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U.S. Auto Firms

Need One Goal:

Build the Best!

By JAMES B. STEWART

September 26, 2007

In another life, I'd love to run a U.S. auto maker.

With General Motors on strike, billions in losses, and U.S. auto makers' market share in a seemingly irreversible decline, I can understand why you'd think this is crazy. Maybe I'm an incurable optimist when it comes to American cars, rooted in a love affair that began when my father brought home a 1957 DeSoto with power windows.

But Detroit's glorious past isn't the main reason. I'm convinced that all the industry needs is some bold ideas and leadership. I'd like to think that Alan Mulally at Ford is the man for the job since I own the stock myself, and have held on despite several opportunities this year to exit with a nice profit. But I have some bold ideas myself.

I start with the proposition that quality is not only the most important goal, but the only goal. Quite simply, the reason I want to be chief executive of an auto maker is to make the best car in the world. I'd manage everything around that aim.

That may sound simple, but consider what goals get lost as a result: market share, short-term profitability, number of employees, health care and other benefits and everything else that creates static when the auto industry is the subject. All of these problems would vanish if people were lined up to buy American cars because they were the best.

And let's don't pretend that they are now. I'm tired of all the hand-wringing in Detroit about the inexplicable failure of American customers to recognize how much Detroit's products have improved. Yes, they have improved. It's impressive that Buick tied Lexus at the top of the latest J.D. Powers quality survey. But as an American, I take it as an affront that the most exciting car on the road is the Toyota Prius.

The simplicity of this goal also offers a road map for labor relations. The UAW has to get on board, and will when it recognizes how a thriving, quality-based auto industry will meet its workers' needs. I have some sympathy for the union's current plight. The workers weren't responsible for the decision to stake the industry's future on trucks and SUVs. But auto workers need and should embrace incentives that align their interests with the goal of building the best cars. This may mean a more competitive, less egalitarian workplace in the short run, but the alternative is far worse.

To further this effort, I'd like to see someone step up and offer a prize to the team responsible for designing and building the best new car in the world. Whoever funds the prize could define the parameters and time frame, but surely qualities would include environmental sustainability, performance, style, practicality and affordability.

Google has offered a $30 million Lunar X Prize to the first team to land a vehicle on the moon by 2012. How about at least that much for a project a little closer to home? Earlier this year the X Prize Foundation proposed an automotive X Prize to "inspire a new generation of viable, superefficient vehicles that help break our addiction to oil and stem the effects of climate change."

I'd prefer something a bit less polemical, but this is a good start. Guidelines are being developed and a dollar prize hasn't been announced, so there's still a Google-like opportunity for someone to step in and make this a reality. X Prize hopes to hold races in 2009 and 2010.

This being a global economy, the competition would be open to anyone. It might well be won by the Japanese, Europeans or anyone else. But Americans invented the car. They thrive on competition. If I was running a U.S. auto company, we'd be in the competition -- and I'd bet on the home team.

James B. Stewart, a columnist for SmartMoney magazine and SmartMoney.com, writes weekly about his personal investing strategy. Unlike Dow Jones reporters, he may have positions in the stocks he writes about. For his past columns, see: www.smartmoney.com.

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The Germans invented the car, and it was refined by the French (pioneering the front-engine layout, steering wheel etc.). Americans (well, mainly GM) invented the self-starter (hand cranks could be lethal), automatic transmission, airbags and a host of other gizmos for making motoring safer and more comfortable.

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The Germans invented the car, and it was refined by the French (pioneering the front-engine layout, steering wheel etc.). Americans (well, mainly GM) invented the self-starter (hand cranks could be lethal), automatic transmission, airbags and a host of other gizmos for making motoring safer and more comfortable.

like i said in another thread there is a lot of advancements made since the original carrage with an internal combustion engine

some what similar, the primitive chinese were the first to try to goto the moon, but there have been some major advancements in engeneering that allowed us and the russians to actually make it to outerspace let alone land on the moon. not saying that the chinese arent capable of doing so now, its just the original design of things arent always the ones to send the credit to...

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