Each of the Big Three automakers has been talking about developing a World Car--a car that not only would accommodate the requirements of the American market, but also different world markets. This is a recurring dream among automakers because, on paper, a world car looks like a very cost-effective proposition.
There's nothing particularly wrong with dreaming, but when it comes time to put up some big-time money, I say it's time for a reality check.
You have to ask yourself whether a single product can be designed to accommodate the requirements of different markets. Take a simple washer and dryer. The large-size units that we're used to in this country would be impossible to fit into smaller European and Asian apartments.
If you think you have problems with washers and dryers, when you get to a car it really gets complicated. With a car you get involved with high gas prices, lack of infrastructure and parking availability, not to mention tariffs and safety and emission regulations.
There also are more subtle problems such as the "not invented here" syndrome. Anytime you infringe on someone or some country's perceived expertise you can count on resistance or, at the very least, lack of support.
Back around the middle '70s, Chrysler decided to come out with the Omni and Horizon. This was to be a world car, designed in conjunction with Simca, the French auto company that Chrysler owned at the time. I had a bet that when the final design was completed there wouldn't be 10 parts the same. I was wrong. There were only two parts the same.
The amazing thing is that the two cars looked identical. Yet every part (except two) were different enough that it made it impossible to exchange parts or to use common tooling. All of the potential cost savings were lost.
It's hard for engineers to accept another engineer's design even if it's better. They'll find every reason under the sun why their design is best. When this mentality is applied across the broad spectrum of design, engineering, marketing, regulations, timing, scheduling, etc., you really get bogged down, and the idea of developing a world car becomes very elusive.
You might think that these problems could be resolved with some strong management. But who would be strong enough to convince the French engineer that the German engineer's design is better or vice versa, or to convince both they should accept the American design?
If you go beyond all these problems and just think about what this world car would look like, you get into another set of problems.
For one thing the car would have to be small to accommodate all the different markets. And because of safety requirements in this country, the body structure design of a small car must incorporate many features that would not be required in other countries.
Now we come to options. Americans like a lot of options on their cars; as a matter of fact, many options are considered almost standard, like air conditioners, radios, automatic door locks, speed controls, antilock brakes, etc. It wouldn't be cost-effective to design a car for the U.S. safety regulations with the options that Americans want and then strip it down for shipment to overseas markets. You can't strip down the "beefed up" structure, the brackets and supports required for these features because they are integral parts of the body.
Another problem is that the cost to build a small car is about the same as a large car. The size of the factory is about the same size, it takes almost the same number of people to build a small car and their pay isn't any different. Therefore, the only way to make any money on a small car, built in this country, is to load it up with options.
One problem no one seems to talk about--and it could be the biggest problem of all--is local content laws. America is very liberal when it comes to local content. American car companies don't care who builds their components as long as they can meet the specs and their price is competitive. Most other countries still have local content laws designed to build up their local car companies and related suppliers. These laws are targeted toward a 100% national product.
I can see the idea of a global design working when it's applied to global suppliers. Indeed, it is working--and maybe not to our advantage. Look at the number of German, French and Japanese suppliers in this country working closely with our engineers to incorporate their product designs in our future cars. On the other hand, how many American suppliers are overseas working with French, German and Japanese car companies to incorporate their product designs in their cars?
I guess the question becomes if one size fits all, whose size will it be?
