What would happen if Steve Jobs took over a car company?--It might be called the iMo.
One of the things Congress might consider if it agrees to help bail out the Big Three automakers is that at least one of them be run by Apple’s Steve Jobs.
I wish that was my idea, but it isn’t. Robert X. Cringely, the pseudonym for one of the best technology writers in the business (I’ll never reveal who he is. Never!) came up with the idea in his PBS column here, and it is beautiful to behold. The name iMo, is a bit of imagination from a British designer who is now in a lot of trouble.
Cringely’s point is that the car companies are stuck in the past and shackled with conventional wisdom. No one ever accused Steve Jobs of either. If Jobs transformed say GM the same way he transformed Apple, it would be a whole new paradigm.
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When Jobs returned to Apple from exile in 1997, the company was a basket case, even worse than General Motors. Michael Dell, of the eponymous computer company, suggested the only rational thing Jobs could do was liquidate Apple and return the money to the stockholders. Now, Apple is vastly more valuable than Dell, has transformed the modern world with products that everyone else, including Dell, is working very hard and unsuccessfully, to imitate. (Any websites out there breathlessly anticipating the next Dell product?) Think of what the iPod has done to music (Apple now is the world’s largest distributor of music now), and the iPhone to mobile devices (the second best-selling mobile phone in the world and every company is trying to imitate it). The reason Windows sucks and is actually losing market shares mainly is because it is a feeble imitation of Mac OS-X and has been for years. Apple is debt free and has enough cash in the bank to buy all three car companies with change left over. Buying Dell would come out of petty cash.
Here’s what Cringely and I think Jobs would do:
- Eliminate brands--the American car companies compete not only with each other and with the foreign brands, but themselves. Why have all those brands? GM eliminated the Oldsmobile (but added Saturn), and Chrysler cut the Plymouth, but Cringely thinks more slashing is necessary. I own a Mercury Mariner Hybrid (excellent car, by the way) but it is identical to the Ford Escape Hybrid except for the grill. Why do this? Know anyone who owns a Pontiac? Jobs understood that you need to simplify your product line. Identify your best customers (in Apple’s case, the graphics and creative people) and aim right at them.
- Eliminate losers--Jobs eliminated products that didn’t make money. Sounds simple, but explain why GM still sells Hummers? Indeed, it is the biggest SUV and the smallest cars, Cringely says, that make the least profit. (The big SUVs were hilariously profitable until oil soared to $100 a barrel). Why try to make a car for everyone? Leave the little cars to Kia and Hundai. Concentrate.
- Forget the notion there is an eternal conflict between product people and financial people. Cringely points out that the best proof that you can have that there are people who do both well, and companies that do both well, is Steve Jobs and Apple.
- Bank on new technologies--Detroit works on the basis that what went into a car and what made a car run for the last 100 years is still the best way of doing things. Think of gasoline and the internal combustion engine. Jobs has been superb at identifying new technologies and riding them to the bank. Pick one, any one. Hybrid? Electric? Hydrogen? Mice on a treadmill? Chose one and run with it.
- Emphasize radical design--If Apple is famous for anything it is design. You either buy into the aesthetic or you don’t, but enough people like me do to sell lots of products. Jobs would make cars that reflected that attitude--radical, beautiful, intuitive. You can look at a desk from afar and tell if the computer on it is an Apple or a HP or Dell imitation of an Apple. You would see a Jobs’ company’s car a block away.
- Don’t sell the cars people want; sell cars you convince people they want--Everyone loved the Sony Walkman until Apple came out with the iPod and convinced people they really, really wanted one. Everyone loves the Blackberry so Apple came out with the iPhone and convinced enough people that’s what they wanted. Detroit's excuse has always been it is selling Americans the cars they want. Big mistake. Eight or so years ago, Jobs eliminated floppy disk drives from Apples. Everyone said that was a mistake. Comuters need floppy drives. Jobs convinced customers they didn't need them at all and now no new compuers have floppy drives. Make them want the cars you sell. And lastly:
- Don’t make cars--Cringely thinks Jobs would get his car company out of the manufacturing business and outsource that function. Apple no longer makes its own computers; companies in China and Taiwan build them. Cringely thinks Jobs would announce that his car company design and market cars, not build them. Then he would open the manufacturing for bidding. He’d close all his plants, fire all his workers (Cringely thinks that you get tumult when you lay off only a percentage of workers; things are more peaceful if everyone goes--I demur). It would have several advantages, including having a company far more flexible and facile and well as cutting costs. Close the plants and outsource.