Letter to Obama: What the Car Industry Needs Is A Steve Jobs(techcrunch.com)
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Letter to Obama: What the Car Industry Needs Is A Steve Jobs
http://www.techcrunch.com/2009/02/22/letter-to-obama-what-the-car-industry-needs-is-a-steve-jobs/
27 comments
The other thing Automakers haven't got yet is that like 80% of people want a cheap fuel efficient vehicle. I would rather pay $4000 for a vehicle and have nothing except a 4* safety rating than pay $20,000 have a 4* average safety rating with a bajillion gadgets all priced at like $500 for something that costs $5 max to make.
Everybody on the fucking planet knows a 5 disc CD player with a line-in doesn't cost $500 to install because they're on sale for anywhere between 30 and 60 at any store selling anything remotely vehicular.
Everybody on the fucking planet knows a 5 disc CD player with a line-in doesn't cost $500 to install because they're on sale for anywhere between 30 and 60 at any store selling anything remotely vehicular.
The numbers say otherwise. 51% of all vehicles sold in the US in December 2008 were pickups or SUVs. [1] Average vehicle sales price is $25,000 [2], despite the existence of nice cheap fuel-efficient cars like the Yaris at $12,000.
Dagres' suggestion that cars should be more about electronic gadgets is wrongheaded. Cars last 10 years, gadgets are obsolete after 3. You want a car + an iPhone, the second of which you'll upgrade several times.
[1] http://www.bizjournals.com/albany/stories/2009/01/12/story1....
[2] http://www.nydailynews.com/money/2008/09/04/2008-09-04__anal...
Dagres' suggestion that cars should be more about electronic gadgets is wrongheaded. Cars last 10 years, gadgets are obsolete after 3. You want a car + an iPhone, the second of which you'll upgrade several times.
[1] http://www.bizjournals.com/albany/stories/2009/01/12/story1....
[2] http://www.nydailynews.com/money/2008/09/04/2008-09-04__anal...
Why does the installation of new electronic components have to be such a headache? We don't even have wifi in our cars today. To get a standard cubicle feature in your car it's a PITA DIY project. Maybe we need to design with customizability and modularity in mind.
Take mobile music for example. There is no respect for wifi or CRUD. If you want internet variety you're stuck with either an iPod or a CD player. Wouldn't we all like access to last.fm, pandora or a simplified version of itunes in our cars? Wouldn't it be nice if, whenever your car was in an open wifi area, it synced account preferences and pulled appropriate new content? You should be able to blacklist tracks and podcasts on the fly. Instead you have to remember preferences in your head so that the next time you sit down at your computer you can edit your playlist.
I think Detroit should open up standard panels in the dashboard so commuters can snap out last year's modules and plug in this year's technology. Nobody wants to perform majory surgery on their car, they just want to pop in whatever 3rd party vendors are selling this year. Break the rules, Detroit, and open up an API so 3rd party developers can access a few standard buttons.
Take mobile music for example. There is no respect for wifi or CRUD. If you want internet variety you're stuck with either an iPod or a CD player. Wouldn't we all like access to last.fm, pandora or a simplified version of itunes in our cars? Wouldn't it be nice if, whenever your car was in an open wifi area, it synced account preferences and pulled appropriate new content? You should be able to blacklist tracks and podcasts on the fly. Instead you have to remember preferences in your head so that the next time you sit down at your computer you can edit your playlist.
I think Detroit should open up standard panels in the dashboard so commuters can snap out last year's modules and plug in this year's technology. Nobody wants to perform majory surgery on their car, they just want to pop in whatever 3rd party vendors are selling this year. Break the rules, Detroit, and open up an API so 3rd party developers can access a few standard buttons.
> The numbers say otherwise. 51% of all vehicles sold in the US in December 2008 were pickups or SUVs. [1] Average vehicle sales price is $25,000 [2], despite the existence of nice cheap fuel-efficient cars like the Yaris at $12,000.
Actually, the numbers don't say that.
If you only have one car, that car has to satisfy almost all of your car needs. The Yaris doesn't for a lot of people. (The Scion xB does for a lot more people.)
If you're going to buy an "extra" car for its mileage, it has to be cost less than the amount of money that you save by using it instead of your "all uses" car. A $12k extra car usually doesn't do that.
A 10mpg vehicle will use 10k gallons over 100k. A 15mpg vehicle uses 6.6k gallons. A 20mpg vehicle uses 5k gallons, 30mpg uses 3.3k, a 40mpg vehicle uses 2.5k, and a 50mpg vehicle uses 2k gallons.
At $4/g, the 10mpg vehicle's gas costs $40k, the 15mpg vehicle's gas costs $26.6k, the 20mpg vehicle's gas costs $20k, 30mpg costs $13k, the 40mpg vehicle's gas costs $10k, and the 50mpg vehicle's gas costs $8k.
Note that gas isn't the only cost - the "gas saver" extra car also has license/registration, insurance, maintenance, time value of money (the gas cost is over time while the purchase cost either isn't, or requires paying interest), etc.
So, if you're already getting 15mpg, the gas savings from an extra vehicle that gets 40mpg are considerably less than $12k.
If you're already getting 20mpg, it's even harder to save money by buying an extra vehicle.
In other words, the guy who wanted a $4k gas saver may have been at the upper end of economic sense - the "extra car to save gas" probably needs to be less than $3k.
Yes, the ability to "rent" big vehicles for occasional usage can let people have smaller "main" cars, but only if the rental cost is sufficiently low. I note that the zip car people seem to have gone the other direction. Hertz and the like charge a significant premium for big vehicles.
And the loss of flexibility is important. I can (and have) gone diving with 15 minutes notice. If I had to rent a car....
And, yes, many families have multiple vehicles. They still have to satisfy simultaneous users so the above analysis applies. (Yes, many can, and do, make do with a "big" and "medium", but that means that a 3rd vehicle to save gas must cost even less than the above suggests because they're already using the big vehicle less than their average.)
Actually, the numbers don't say that.
If you only have one car, that car has to satisfy almost all of your car needs. The Yaris doesn't for a lot of people. (The Scion xB does for a lot more people.)
If you're going to buy an "extra" car for its mileage, it has to be cost less than the amount of money that you save by using it instead of your "all uses" car. A $12k extra car usually doesn't do that.
A 10mpg vehicle will use 10k gallons over 100k. A 15mpg vehicle uses 6.6k gallons. A 20mpg vehicle uses 5k gallons, 30mpg uses 3.3k, a 40mpg vehicle uses 2.5k, and a 50mpg vehicle uses 2k gallons.
At $4/g, the 10mpg vehicle's gas costs $40k, the 15mpg vehicle's gas costs $26.6k, the 20mpg vehicle's gas costs $20k, 30mpg costs $13k, the 40mpg vehicle's gas costs $10k, and the 50mpg vehicle's gas costs $8k.
Note that gas isn't the only cost - the "gas saver" extra car also has license/registration, insurance, maintenance, time value of money (the gas cost is over time while the purchase cost either isn't, or requires paying interest), etc.
So, if you're already getting 15mpg, the gas savings from an extra vehicle that gets 40mpg are considerably less than $12k.
If you're already getting 20mpg, it's even harder to save money by buying an extra vehicle.
In other words, the guy who wanted a $4k gas saver may have been at the upper end of economic sense - the "extra car to save gas" probably needs to be less than $3k.
Yes, the ability to "rent" big vehicles for occasional usage can let people have smaller "main" cars, but only if the rental cost is sufficiently low. I note that the zip car people seem to have gone the other direction. Hertz and the like charge a significant premium for big vehicles.
And the loss of flexibility is important. I can (and have) gone diving with 15 minutes notice. If I had to rent a car....
And, yes, many families have multiple vehicles. They still have to satisfy simultaneous users so the above analysis applies. (Yes, many can, and do, make do with a "big" and "medium", but that means that a 3rd vehicle to save gas must cost even less than the above suggests because they're already using the big vehicle less than their average.)
I want a vehicle that costs $4,000 and does moderate-good mileage with good safety. It could be a possibility with Tata Motors buying out brands like Jaguar and Land Rover. They have a vehicle that fills this criteria selling for $2,500.
I know, however, that if I'm spending $12,000 on a Yaris, $25,000 on your basic sedan or $35,000 on a Ford F-150 what am I going to choose? Well I'm going with the F-150 (or other truck) because the amount it'll cost me to do 'extra' things with a car is going to cost me more than it saves to buy a truck. I've worked in construction, which means any work on my own house is going to be done with my two hands and everything I use needs to be loaded into my truck.
If there was a car for $4,000 I'd probably get it and suffer with renting a U-Haul every time I wanted to do something, but over the run of 10 years U-Haul's will add up way past the $10,000 difference between a truck and a sedan.
I know, however, that if I'm spending $12,000 on a Yaris, $25,000 on your basic sedan or $35,000 on a Ford F-150 what am I going to choose? Well I'm going with the F-150 (or other truck) because the amount it'll cost me to do 'extra' things with a car is going to cost me more than it saves to buy a truck. I've worked in construction, which means any work on my own house is going to be done with my two hands and everything I use needs to be loaded into my truck.
If there was a car for $4,000 I'd probably get it and suffer with renting a U-Haul every time I wanted to do something, but over the run of 10 years U-Haul's will add up way past the $10,000 difference between a truck and a sedan.
It is an article of faith for the Democrats to think that. And the Administration may tell the car manufacturers to produce fewer SUVs as a condition of their bailout. But as another poster has already pointed out, the average American wants an SUV.
This will lead to problems.
Also, if you're really interested in safety you may not realize that safety ratings only compare cars in the same class. More weight is generally more safety. And if you don't drink and always wear your seatbelts, the rollover fatality risk of SUVs goes down 90%, making them very safe. In my Southwestern home state, where everybody drives either a pickup or an SUV, I didn't think for a second about getting a small car. When that drunk from the reservation inevitably runs into me, I don't want my tiny SmartCar to crumple under his F350.
This will lead to problems.
Also, if you're really interested in safety you may not realize that safety ratings only compare cars in the same class. More weight is generally more safety. And if you don't drink and always wear your seatbelts, the rollover fatality risk of SUVs goes down 90%, making them very safe. In my Southwestern home state, where everybody drives either a pickup or an SUV, I didn't think for a second about getting a small car. When that drunk from the reservation inevitably runs into me, I don't want my tiny SmartCar to crumple under his F350.
"The article suggests Jobs himself be in charge of these companies."
It does, and I think that's a basic mistake. If Steve Jobs was "a Steve Jobs" right now, he wouldn't be off sick from Apple for six months.
It does, and I think that's a basic mistake. If Steve Jobs was "a Steve Jobs" right now, he wouldn't be off sick from Apple for six months.
What the car industry needs is a reboot.
The 1908 Ford Model T had a 4-cylinder engine, ran on 4 wheels, used gasoline, with a mileage of 20mpg. A hundred years later, the basics are still the same. Why put billions more in a dead-end industry?
The government should instead invest in new ways of building cars. Like the Aptera 2e (http://en.wikipedia.org/wiki/Aptera_hybrid_car) which is fundamentally changing the way a car is built. Or Tesla. Or Zap.
Forget the Big 3. Create the Small 300.
The 1908 Ford Model T had a 4-cylinder engine, ran on 4 wheels, used gasoline, with a mileage of 20mpg. A hundred years later, the basics are still the same. Why put billions more in a dead-end industry?
The government should instead invest in new ways of building cars. Like the Aptera 2e (http://en.wikipedia.org/wiki/Aptera_hybrid_car) which is fundamentally changing the way a car is built. Or Tesla. Or Zap.
Forget the Big 3. Create the Small 300.
I'm #1607 on the waiting list for an Aptera. I signed up because I had complained so often that there was no electric car you could actually buy, and people kept telling me I just didn't try hard enough. So far I'm right, and I predict I'll never actually get mine. When the CEO brags that they have 45 circuit boards [1], I can already read the company's obituary. But maybe they'll pull it off, and I'll have a really snazzy car.
I'm more excited about Mission Motors electric motorcycle. http://www.ridemission.com/. (I'm an investor.) It's breathtakingly fast and fun to ride.
[1] http://earth2tech.com/2008/10/01/aptera-tweaking-electric-ve...
I'm more excited about Mission Motors electric motorcycle. http://www.ridemission.com/. (I'm an investor.) It's breathtakingly fast and fun to ride.
[1] http://earth2tech.com/2008/10/01/aptera-tweaking-electric-ve...
45 circuit boards? Maybe what the car industry needs is not a Steve Jobs, but rather a Steve Wozniak.
Woz figured out how to drastically minimize the number of hardware components on the Apple II. He could cut those 45 circuit boards down to 4.
Woz figured out how to drastically minimize the number of hardware components on the Apple II. He could cut those 45 circuit boards down to 4.
The Aptera smacks of vaporware, with the constant delays, but I'm still guardedly excited about it--if they can hit their price target with something close to their promise, I'd make a Californian friend just to buy one.
The Mission Motors bike, on the other hand, is firmly in the Tesla roadster camp: The projected price point puts it out of the "this could save you money, eventually" category and into the "cool toy for rich eco-geeks" category. Its performance is similar to my Daytona 675's, which cost me $7500 and gets 45mpg.
The Mission Motors bike, on the other hand, is firmly in the Tesla roadster camp: The projected price point puts it out of the "this could save you money, eventually" category and into the "cool toy for rich eco-geeks" category. Its performance is similar to my Daytona 675's, which cost me $7500 and gets 45mpg.
Why do you think there should be 300 car companies? Can you point to another manufacturing industry where hundreds of players collectively have significant market share?
Yes. The car industry in the early twentieth century. Car companies coming out of every moderately-well-off mechanic's garage.
Yes, it eventually consolidated. It will again. But we're not going to get from here to there without some competition that just isn't going to come from the established players, for a variety of reasons.
Yes, it eventually consolidated. It will again. But we're not going to get from here to there without some competition that just isn't going to come from the established players, for a variety of reasons.
Isn't it the startup model?
By investing in 300 small companies, you get better chances to reinvent the market and create better big ones.
By investing in 300 small companies, you get better chances to reinvent the market and create better big ones.
What the car industry needs is a restructuring.
Let them go bankrupt and sell off useless assets. There is no need for them to make 3 different versions of the same car for 3 different brands.
Then they need to stop making 50 million different options. There is absolutely no reason to make cars completely customizable. Consumer confusion is not a good thing. All you need is 3 trims, a) DX model - the cheapest model available lacks the premium features(cd changer, heated seats, power windows) b) LX model - has all the missing parts c) EX model - has the premium features like bigger wheels, heated mirrors etc.
Then they need to start closing off dealerships, this isn't starbucks where the price is fixed, your dealers are negotiating prices, when you have 2 dealers, a block from each other, your average car price goes down, which hurts your resale values.
Let them go bankrupt and sell off useless assets. There is no need for them to make 3 different versions of the same car for 3 different brands.
Then they need to stop making 50 million different options. There is absolutely no reason to make cars completely customizable. Consumer confusion is not a good thing. All you need is 3 trims, a) DX model - the cheapest model available lacks the premium features(cd changer, heated seats, power windows) b) LX model - has all the missing parts c) EX model - has the premium features like bigger wheels, heated mirrors etc.
Then they need to start closing off dealerships, this isn't starbucks where the price is fixed, your dealers are negotiating prices, when you have 2 dealers, a block from each other, your average car price goes down, which hurts your resale values.
And a pony.
Isn't this like saying poor people need money and hungry people need food? Are we really giving our attention to someone saying, "The solution is to fix it!"?
And maybe this guy didn't notice, but at least one of the American auto companies, Ford, actually has some pretty competent management. They're dealing with their union problems and investing in sustainable technologies (both in the vehicles they produces and the way they produce them), and Fords these days suck quite a bit less than other American brands.
Isn't this like saying poor people need money and hungry people need food? Are we really giving our attention to someone saying, "The solution is to fix it!"?
And maybe this guy didn't notice, but at least one of the American auto companies, Ford, actually has some pretty competent management. They're dealing with their union problems and investing in sustainable technologies (both in the vehicles they produces and the way they produce them), and Fords these days suck quite a bit less than other American brands.
This is pretty link-baitey even for Techcrunch let alone Hacker News
Ford's current CEO Alan Mulally is actually pretty good - I met him when he was still director of engineering for the 777 - under him Ford has made some good moves, such as building a large capital base just before the credit crunch hit.
Ford also already makes some good cars, they just don't sell them in the US - they need to pull some EU models over to the states
Ford's current CEO Alan Mulally is actually pretty good - I met him when he was still director of engineering for the 777 - under him Ford has made some good moves, such as building a large capital base just before the credit crunch hit.
Ford also already makes some good cars, they just don't sell them in the US - they need to pull some EU models over to the states
I would like to see Steve Jobs deal with CAFE standards and union contracts.
GM doesn't need help creating high-end products either (see ZR-1, G8, CTS-V, etc. the marketing needs improvement though), so can jobs design and market the car equivalent of a Netbook?
GM doesn't need help creating high-end products either (see ZR-1, G8, CTS-V, etc. the marketing needs improvement though), so can jobs design and market the car equivalent of a Netbook?
Here in Germany we have very strong unions. The system we have here would be called communism by right-wing american standards. In Europe we call it social capitalism.
With this system, we are building the best cars in the world for decades. I am sure Steve Jobs could manage a Porsche successful, within the european system.
With this system, we are building the best cars in the world for decades. I am sure Steve Jobs could manage a Porsche successful, within the european system.
Porsche is a low volume automaker in America so they are exempt from CAFE standards. They also only sell high margin vehicles so they can take the high labor costs.
The issue is not GM being unable to build the best cars in the world (compare Corvette ZR-1 to a 911 GT2), it's the lousy way they approach CAFE standards (Aveo, Cobalt). Can Porsche design and market a car that goes 35 mpg?
The issue is not GM being unable to build the best cars in the world (compare Corvette ZR-1 to a 911 GT2), it's the lousy way they approach CAFE standards (Aveo, Cobalt). Can Porsche design and market a car that goes 35 mpg?
> Can Porsche design and market a car that goes 35 mpg?
And costs less than $20k out the door.
VW Brazil can, but those aren't German workers.
And costs less than $20k out the door.
VW Brazil can, but those aren't German workers.
The different parts for computers and cars come from all over the world.
Yes, but that doesn't mean that the parts come from anywhere or that they can be assembled anywhere for the same amount of money.
But Porsche is not excempt from rigid european / german union standards. And I could have picked Audi or BMW as well and they are not low-volume by any measure.
Why, when it already has Shai Agassi?
See http://www.betterplace.com/
See http://www.betterplace.com/
What american car industry needs is european or japanese or korean spirit. Any of the mentioned industries invested much more in development than the american one, which slept for too long (at least the big ones).
This was the conclusion of someone I talked to, working in that exact industry.
This was the conclusion of someone I talked to, working in that exact industry.
In particular, Jobs axed all the different Mac models being developed, and made a single compelling product: the iMac. This focused the business, and created a market.
It wouldn't take Jobs himself to do this with automakers. In fact, it hasn't; just look at something like the redesigned VW Beetle, or the Mini Cooper, both the iMacs of their markets.