A New Bailout Plan for the Auto Industry

I feel bad for the victims of the Auto Industry's collapse.

But, the fact is... I don't think that the American Auto industry, as it is today, can survive. For a company to survive, they need to create a product that people want.

And, as far as buzz-worthy products? The Pontiac Solstice/Saturn Sky created a lot of buzz.

And that's all I can think of.

Okay, there are more people who want to buy American hybrid SUVs than the companies can supply. But, unless the companies can figure out a way to turn a profit from cars they can't produce... these products don't help the car companies' bottom lines.

And, yes, there are the American exotics. I suppose that there will always be interest in the Vipers, Ford GTs, Prowlers, and high-end Mustangs and Corvettes. But right now, they're the showpieces of the auto industry. They're not meant to be the revenue producers.

So, in the end? We've got comanies that have consistently failed to produce products that people want. And I haven't seen any "must have", drool-worthy cars in the works either. The only one that creates any interest is the Chevy Volt - and, quite frankly, I'm not convinced that it can be produced. Or that people will want to buy it once it's made.

Clearly, for an American car company to survive, it needs to innovate. To create cars that we didn't realize that we wanted - until we saw them. And, until recently, this was the American car companies' strength.

And, when there's no innovation coming from the car companies... it definitely won't be created through a government bailout.

So... how do we create innovation?

Here's my plan.

Declare GM and Chrysler dead. Let them sell their remaining inventory - I'm sure that plenty of third party companies would be happy to compete for warrantee contracts. Smart dealers would bundle them in. This will provide the dealers and distributors some time to create a "Plan B" for their financial survival.

Meanwhile, parts suppliers will have time to retool. There will still be a demand for parts. Heck, if there's still demand for "classic auto parts", there's still going to be demand for American auto parts for many years to come. Yes, eventually, businesses will have to retool... but they have time. They won't die overnight.

In the meantime? We've got a lot of car factories. And design centers.

And, if we can't find fuel innovation through the free market yet - maybe there's another way.

My proposal? Let's create a reality television show. Let the broadcasters compete over who gets to air it.

Let the management teams of GM and Chrysler have their teams. The UAW can get a team too.

After that? I'm sure there are plenty of qualified entrepreneurs who'd love to compete. If they can create a team that can realistically succeed - let 'em in.

Start with concepts. Move on to prototypes. Engineering tests for durability, safety, and feasibilility of delivering the marketing claims. Testing by auto enthusiasts. And so on.

All with the American public watching on television. And voting away the design and engineering teams that just don't get it.

The winner? They get the equipment to start the small-but-nimble innovators that can create demand for American cars.

And the losers? Heck, if they've got good ideas, I'm sure they'll pick up investors.

After all, I've seen a lot more successes from "American Idol" runner-ups than I have from winners.