Make Cars Like We Make Computers

Automakers should make cars like we make computers.

The US automakers are in trouble. Last week the government agreed to help the big 3 out with $15B. Today, Mike commented on the auto industry bailout, expressing an opinion I share for the most part (we should not save Detroit). Americans have voted with their dollars: they do not want American cars. For years the automotive industry has received subsidies for innovation; at this point it seems they frittered the money away. I think auto makers should follow the computer industry. As it stands automobiles are still crafted when they need to be manufactured.

A classic example of craftsmanship versus engineering is in gun production. Before the Industrial Revolution, people handmade every piece of a gun, meticulously massaging the metal and wood until everything fit. Then we specialized in making specific components very uniformly. With uniform components anyone could order the right pieces and assemble a gun.

The computer industry was in a similar position years ago. No, not bankruptcy, but auto makers were not doing well either; they were trying to accommodate myriad different components that led to countless different combinations (many did not work). As Ryan Harvey commented in my post about Macs, controlling the hardware removes a lot of headaches for anyone sitting above the foundation—Macs “just work” in part because they only support a handful of configuration works. However, AMD and Intel have both made their processors more standard (fitting a standard socket) which has led to 1) ease in building computers and 2) innovation in motherboards, graphics cards, and even CPUs. Whenever the hardware works, others can focus on higher layers.

Dell made a killing as a computer-builder without making any of their own parts. They bought components from companies who specialized in those components and produced inexpensive. In the meantime we saw many other companies follow a similar business model and do well. At the same time, hobbyists benefited from the reduced prices and increased technology. Car makers could follow the same arc to everyone’s benefit.

The automakers should make cars like we make computers:

  • Define the basic car components.
  • Make car parts more standard and interoperable.
  • Create new jobs creating parts, assembling vehicles, modifying cars and car parts, and researching new components.
  • Offer people premade vehicles at a discount or allow them to customize their components at a premium.