Cadillac and Lincoln used to be two of the greatest luxury brands in the business until General Motors and Ford tried to manage them on the cheap.
The results were disastrous. Now they’re trying to claw their way back. But can they catch the German juggernauts? Not if they play by the same rules. They need a completely different game plan.
Clever advertising and marketing are not enough. What’s needed are scintillating products that provide greater exclusivity than Mercedes, BMW or Audi can offer. But how?
Today’s industry is overly fixated on economies of scale. Scale is important because of the massive tooling and automation costs needed to manufacture vehicles. Building in higher volumes means you can spread out the cost of the tooling over many units of production. But what if scale didn’t matter, or didn’t matter as much?
What if you could re-use tooling again and again as you came out with new models? What if you could use the same tooling to make a number of completely different versions? I’m not talking about variations off the same architecture; I’m talking about completely different vehicles. It may sound impossible, but that’s how they used to make cars a century ago.
As author Thomas Crumm points out in his insightful book “What Is Good For General Motors,” Henry Ford assembled cars using what was called a staged assembly process. This was pre-1913, before Ford started using the moving assembly line, and when the company was still making various models, not just the Model T.
Small teams, under the direction of master craftsmen, would work on a chassis line, a powertrain line and a body line. As they completed their tasks, they’d push the car to the next stage, where another team would take over. As sales volume rose, Ford added more teams.
When the craftsmen came up with ideas on how to improve the design, engineers were told to draw up blueprints, not the other way around. As they came up with ideas for new models, the craftsmen would use their universal tools and reconfigurable fixtures to develop the prototypes. When they were satisfied with the level of perfection, the engineers and draftsmen would be called in to draw up the prints. Again, the opposite of how it’s done today.
Staged assembly was very adept at modifying design, incorporating new ideas on the fly and introducing new models to fit emerging needs. Old models would be kept in production until sales dropped off and new ones would be ramped up only as demand grew. And all of this was done in the same factory with the same tools.
Using these techniques, Henry Ford was able to build 750 cars a day, or about 150,000 a year. He abandoned them only when he decided to drop all his other models and concentrate exclusively on the Model T. He adopted the moving assembly line because it was perfect for making one model with little variation, or as Ford said, “Any color you want so long as it’s black.”
Lincoln will not even sell 100,000 cars this year. Cadillac will sell about 170,000 in the U.S. Staged assembly would work perfectly for both brands. It would allow them to custom build cars to customers’ whims, bring in new models as they see fit and continue selling older models until customers no longer want them. That flexibility would be far greater than anything they have today, and this kind of exclusivity would allow them to command premium prices.
Could BMW, Mercedes and Audi match that? Not a chance. The Germans could beat them on volume, but Cadillac and Lincoln could beat them on margins. One thing’s for sure: If they try to catch the Germans using today’s techniques, it’s never going to happen. They don’t have the scale.
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline” for WTVS-Channel 56, Detroit, and “Autoline Daily,” the online video newscast.