“My next car,” announced my mother, “will be a plug-in.”  Until she can get that state-of-the-art plug-in hybrid, with its silent ride and pennies per mile operating costs, she is hanging on to the old minivan.  It is people like her that are sending GM into bankruptcy.

High-tech companies, the ones that are still around, have learned how to jump over the valley of death between one product generation and the next, new and improved generation.  When buyers learn that Apple is coming out with a new iPhone, they stop buying the current version, and they wait for the new release. When they learn that Intel is coming out with a chip architecture, they stop buying the current version.  IBM used to come under enormous financial pressure when they got ready to introduce a new generation of mainframes, and sales stopped, and cash flow dried up.  If they couldn't get the new product delivered in time, they would go bankrupt.  Most of their competitors did.  The high-tech survivors are the ones that learned how to manage expectations so people keep buying the older product, cut inventory and sell it off the old stuff, save cash to cover the gap, and make a frantic leap into the next product generation.

The generation transition is a problem for an industry which makes big product changes.  It has never been a problem for the auto industry.  Today's automobiles are better, faster, more powerful, and safer than the cars of 100 years ago.  However, I can look at a 100 year-old car (some are still on the road), and recognize all of the basic components.  It has the same architecture as my recently made Toyota.

Now, we have enough of the last generation of cars and the big loud smelly SUV's.  We don't need any more of them.  We have heard about plug-in hybrids, fuel cells, regenerative supercapacitors, super-efficient diesels.  We're waiting.

So, the auto industry is facing it's first high-tech product cycle.  And, they have handled it exactly backwards.  Instead of suppressing expectations while they sell their current generation of cars, they have promised us all sorts of things that it will take them a long time to deliver.  Instead of reducing inventory, selling it all off, and emptying the lots, they kept running and overstocked.  They have inadequate savings.  And they are slow.  It takes them three years to design a new car and retool a factory.

We have companies here in America that do understand how to run one of these product transitions.  Maybe it would be a good idea if one of those companies took a fraction of its savings and bought GM.  They would know how to manage expectations and sell off the inventory.    And, they work faster than a typical car company.

Speed is important.  The Internet can accelerate all sorts of work.  Is it possible that our work, the work of Assembla and our readers engaged in accelerating software development, can be re-purposed for manufacturing companies?