U.S. Automakers Lost Spirit of Innovation, Industry Analysts Say

Tiffany Gabbay | December 16, 2008 | 6:10pm EST
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In this Dec. 4, 2008 file photo, auto executives, from left, General Motors Chief Executive Officer Richard Wagoner, UAW President Ron Gettelfinger, Ford Chief Executive Officer Alan Mulally, and Chrysler Chief Executive Officer Robert Nardelli testify on Capitol Hill in Washington, before a Senate Banking Committee hearing on the auto industry bailout. (AP Photo/Gerald Herbert, File)

(CNSNews.com) - Prominent engineers in the automotive industry say U.S. automakers have great technological talent but lack the vision to use it effectively. They apparently have lost the innovative spirit.

Victor Fey, adjunct professor of mechanical engineering at Wayne State University and founding partner of the TRIZ Group, a Michigan-based technology consulting firm, told CNSNews.com that while everyone is focused on fuel economy as the "holy grail," the main problem confronting U.S. automakers is a “lack of innovation.”

Fey said it is “nonsensical” to focus solely on fuel efficiency as the means of restoring viability to U.S. auto companies because as the economy improves and gas prices stabilize, American car buyers will return to their normal affinity for larger, more comfortable vehicles.

In the aftermath of a bailout, American automakers will still have to meet consumer preferences, not just government-mandated fuel efficiency standards, said Fey.
American automakers have been “reacting” to their competitors rather than “creating something highly innovative and new,” he said.

“None of their products have that ‘wow factor’ that leaves you thinking, ‘This is amazing. I never dreamed this could be possible,’” said Fey.

“American automakers can win, but not by replicating what the competition has done.  They can win by innovating, by creating something dramatically different,” he said.

Alexander Shoshiev, principal systems engineer at Yazaki, a Japanese auto parts supplier located in Michigan, echoed Fey’s sentiments.

He described the three U.S. automakers as “very reactive.” “They don’t think ahead,” said Shoshiev. “They just react to their competitors and implement the changes they made first.”

Shoshiev said the corporate culture of U.S. automakers is “risk averse.” They “typically don’t want to be the first to try out a new, great idea,” he said.

Shoshiev also said the U.S. automakers are not as willing as their Japanese competitors to pay more for superior parts.  
Japanese automakers, he said, “will make a bid on a parts contract and if the supplier cannot make the product for the requested price, a Japanese automaker will oftentimes renegotiate the terms and raise the price they’re willing to pay. The Big Three are usually not as flexible.”

Shoshiev said Ford needs to eliminate “the gatekeepers of change” and let its “good core of engineers focus on innovation.”

He said Chrysler should reopen some of its advanced engineering divisions that were closed after the Daimler takeover.

Bernard Johnson, president of Analytic and Leadership Excellence, a Michigan-based engineering consulting firm, also pointed to the lack of innovation among the U.S. automakers. “Without thinking out-of-the-box one can only hope to be average,” he said.

Johnson argues that innovative approaches can help automakers develop new concepts rather than focus on repairing products that are the result of sub-par approaches. “When you’re fixing something it is a waste of time and money,” said Johnson.

The U.S. automakers “need to adopt change as a way of conducting business rather than just continue trying to meet their quarterly report goals,” he said. But, he added, “It’s hard to break from the pack and take risks when there is such politics involved.”

Benjamin Saltsman, an engineer with Eaton Corporation, an Ohio-based supplier to the U.S. automakers, said he does not “believe that the Big Three are behind in innovation.”

Saltsman, who worked as a product development engineer at Ford for 11 years, said that it is a “difficult process to bring a car to market.” Part of the problem for the Big Three has been in recognizing that “they don’t have the right mix of vehicles,” which has caused them to fall behind in the market.

Mansour Ashtiani, a multi-patent holder and engineer who spent 23 years working in automotive advanced development at GM and then Delphi, believes the Big Three suffer from what he calls the “not-invented-here syndrome.”

Not Invented Here (NIH) is a familiar term to many engineers. It describes a persistent corporate or institutional culture that avoids using or buying existing technologies, products, approaches, research or know-how because of its outside origin. It is typically used in a pejorative sense.

Ashtiani believes the U.S. automakers have a problem with “ideation versus innovation.” Ideation is a “step,” he said, while innovation is a “process, a project.”

GM was early in the “ideation” of the hybrid car, he said, but then let the Japanese beat them in actually implementing the innovation.

“They are afraid of change and afraid to take risks,” Ashtiani said of the Big Three, pointing out at the same time that they have “the most talented engineers in the world.” 
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