I was just watching Ford's CEO Alan Mulally on CNN... Ford is actually doing fairly well, and doesn't need much of the bailout money, so a lot of people were confused about why he would stick up for GM or Chrysler went bankrupt. At first glance, you think it would be great if your competition went bankrupt, because then you could gobble up their market share... but Ford was actually very concerned.
Initially, I suspected something of an old-boys-network thing. Mulally is sticking up for other Detroit car companies, simply because they need to stick together if one of them needs to go to Washington to ask for help against Japanese or German car companies... so it might be just cynical, political self interest.
Mulally's explanation was oddly different...
He stated that the majority of the auto industry is in the suppliers, not the auto makers. Since all auto companies use the same suppliers, and suppliers are hurting as well, then one bad company puts the whole thing at risk.
For example, if GM goes bankrupt, then Delphi might go bankrupt, and not be able to supply parts to Toyota, Ford, or Volkswagen. That puts them all at risk if a company as large as GM goes bankrupt.
What shocked me was that during the interview, Mulally called his own company an "original equipment manufacturer!" This is a common term in both software and manufacturing, usually shortened to just OEM. It basically means Ford doesn't manufacture anything; it wraps pre-manufactured products with its own brand. They don't make engines, doors, wheels, brakes, transmissions, or pretty much anything anymore... they just slap together other people's stuff, put the word "Ford" on it, then sell it through their distribution channels.
I was wondering how long it would take them to admit this... and how folks would react... The CNN guy just brushed it off as "auto company speak," so I don't think they actually understood what Mulally meant.
Cringely brought this up a few weeks ago in his article What if Steve Jobs ran one of the Big Three auto companies? He suggested the same thing... Car companies should act more like Apple: let other companies do the dirty work of creating the "parts," then focus the big 3 on design, sales, marketing, and customer services. The whole article is very good, I recommend reading it.
Hearing Mulally openly admit that Ford is nothing but an OEM is very telling... and it gives me hope that some folks in Detroit "get it," and might actually be able to turn around the industry... but it might take a while longer for the folks at CNN to "get it."