Where did all these pigeons come from?

For a long time I’ve said that America’s vision is myopic, and its business vision is damn near blind. Now we get to see what happens when faulty business visions finally come to the fruition, and the pigeons descend from the sky looking for a place to roost. The best examples are GM’s pending chapter 11 filing, Time Warner selling AOL, and Visteon filing for bankruptcy. Many words will be spoken about AOL and GM, but not so much about Visteon. Why is Visteon important? They own Ford!

Well, they own Ford’s electronics. Most of the electronics that comes with Ford vehicles, the stuff that makes the vehicles run, are manufactured by Visteon, who owns the designs. As of close of business today, you could buy every share of stock in Visteon for less than 10 million dollars. Think about if, for $10,000,000 dollars, you could control the future of Ford, market cap of about $16 BILLION. How did this happen?

Back in the MBA boom a decade or so ago, a bunch of bright children sat down to figure out what business Ford was in. They looked at all the various divisions of Ford, and discovered their captive electronics group wasn’t making money. Well, Ford makes cars, not electronics, so they spun off the group into Visteon. Of course, there were sweetheart deals, so Visteon wouldn’t try to make a killing; in fact, Visteon was never even allowed to make a profit. Think GM spinning Delco into Delphi, oops, that’s an old story, isn’t it?

Do you realize that today, for less than $110 million dollars you can control more than 50% of the electronics component of America’s automotive industry? Someday, some bright soul will see the past the debt (the purpose of bankruptcy is to “deal with” the debt, wink, wink) and see the potential value of essentially controlling the manufacture of nearly every car and truck made in the US (oh, and a few Kia’s and Hyundai’s. There is much more to be said, but I've got a years worth of nonsense to rant about, this is just the first of a lot. Gee, I think I’m hearing the call from mission control in Detroit “abort to orbit”.

Finally, I Can Speak

For most of the past year I have been working at the Truck Development and Technology Center (TDTC) of Navistar, manufacturer of Internation trucks. It was my first exposure to the automotive industry, and I have come to one major conclusion: I am overjoyed I drive a Scion XB by Toyota, and not some American made camel.

Yes, CAMEL! By the time a design makes it to production, it has been touched by EVERYONE, with each touch resulting in a compromise. I will have more to say soon, but had to post something now. Trust me, 12 months of watching purchasing decisions made based on friendships, ego battles and pure bribary, watching engineering decisions made to insure we never take a next step, just a slow crawl forward. And don't get me started about mis-management, or having to answer questions like "how long will it take to complete this 5 hour task" when it should take 5 weeks!

OK, enough for now, I need to breathe a bit.