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Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. I was told by a GM employee in their tech center in Warre

Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. I was told by a GM employee in their tech center in Warren, they have COBOL running in VMs on modern servers whose terminal screens get scraped into excel spread sheets. This is one of many examples I could give you. I could literally spend hours telling you the horror stories. It's government levels of inefficiencies and leadership has little or no visibility into the system. Everyone in Metro-Detroit knows of the problems in the auto industry. The leadership lacks vision and workers find their niche and retire hoping to do the same things with maybe a promotion to management. There is not a constant drive, at least in the software side of things, to constantly improve and learn like in there is in Silicon Valley. The above is applicable to GM and Ford. Chrysler, on the other hand, is a whole other level of screwed. There's a reason they've been bailed out 2 times by the government and now bought/merged by a foreign car company, AGAIN. Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea.

saosebastiao 11y ago
> Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. It's a good thing that Apple is a software company. > Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea. Of those four, only Tesla has actually produced cars that can be sold to the general public. Tesla is a 13 year old company. It has well known reliability problems, and it is supported by a luxury-only price point and market. It's market share is sub 1%. That is exactly my point. Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum before they are even remotely relevant. Or they could buy an existing car manufacturer with actual market share, and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. Starting from scratch might be reasonable when you are talking software, but building an automotive company takes decades. It doesn't even have to be Fiat Chrysler or domestic for that matter...any existing automaker with more than 20 years experience could be on the table when you have $200B in cash on hand. They could buy BMW for ~$50B or Daimler for ~$70B. Hell, they could buy Toyota at ~$175B.
- primrosepath 11y ago
  > Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum > but building an automotive company takes decades > Tesla is a 13 year old company. Like you said, Apple has $200 billion. That can buy some speed but Apple doesn't have to rush. Tesla did. From Tesla's founding to the first Model S being delivered took 9 years and they did it with under a billion dollars. They also spent time proving electric cars were viable with the Roadster and secure more funding. Apple doesn't need to take this first step. So a crappy guess would be 5-7 years to make a car. This is not worth the risk of spending $40-70 billion, especially when you can get away with spending $2 billion and get better results than Tesla. My main point was the auto companies are so bogged down with legacy (legacy software, legacy manufacturing, legacy thinking, legacy costs, legacy habits, legacy dealerships) that starting from scratch is the better option, even if it does take 10 years. > and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. What your suggesting is, essentially, to unravel 50-60 years of legacy. People have tried and failed. This isn't just a company like GM, a massive institution in its own right, it's all the 3rd party suppliers. I think you're underestimating the work required, even if you assume no worker revolts. I also don't think Apple wants to manage or take on the liability of car divisions from around the world.
  - saosebastiao 11y ago
    Quality in auto manufacturing is an iterative process. It took well over 20 years of Deming's iterative process improvement to bring Toyota's production quality up to the standards of GM in the 1970's...as pathetic as those standards were. It took 40 years of protectionist subsidies, tariffs, and hundreds of billions of dollars in Korean government investment to get Hyundai to the standard where they could actually export their cars without being laughed at. Tesla has taken 13 years to ramp up production to 55k per year, and that was even after lucking out with a down-on-their-luck Toyota manufacturing division complete with experienced management and auto workers getting dropped from Toyota's production portfolio. You hold them up as a standard for progress, but they are literally a toy car company. Ford started producing cars in that quantity in 1911. 20 years from now, Tesla will still be paying high priced consultants with global manufacturing experience for their experience building cars at scale. Tesla will no doubt succeed if they can keep up that pace, but they have an extremely long road ahead before they can even compete with Nissan or Hyundai in the US in terms of production capacity, reliability, and production costs. That legacy culture that you deride has another name: knowledge and experience. The same Tech-industry "we can do it better than you with no domain expertise" arrogance is exactly the reason why Silicon Valley hasn't made any dents in Health Care, Finance, or Energy, despite the untold billions that their VCs have dumped into those exact industries.

saosebastiao 11y ago

> Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. It's a good thing that Apple is a software company. > Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea. Of those four, only Tesla has actually produced cars that can be sold to the general public. Tesla is a 13 year old company. It has well known reliability problems, and it is supported by a luxury-only price point and market. It's market share is sub 1%. That is exactly my point. Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum before they are even remotely relevant. Or they could buy an existing car manufacturer with actual market share, and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. Starting from scratch might be reasonable when you are talking software, but building an automotive company takes decades. It doesn't even have to be Fiat Chrysler or domestic for that matter...any existing automaker with more than 20 years experience could be on the table when you have $200B in cash on hand. They could buy BMW for ~$50B or Daimler for ~$70B. Hell, they could buy Toyota at ~$175B.

primrosepath 11y ago
> Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum > but building an automotive company takes decades > Tesla is a 13 year old company. Like you said, Apple has $200 billion. That can buy some speed but Apple doesn't have to rush. Tesla did. From Tesla's founding to the first Model S being delivered took 9 years and they did it with under a billion dollars. They also spent time proving electric cars were viable with the Roadster and secure more funding. Apple doesn't need to take this first step. So a crappy guess would be 5-7 years to make a car. This is not worth the risk of spending $40-70 billion, especially when you can get away with spending $2 billion and get better results than Tesla. My main point was the auto companies are so bogged down with legacy (legacy software, legacy manufacturing, legacy thinking, legacy costs, legacy habits, legacy dealerships) that starting from scratch is the better option, even if it does take 10 years. > and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. What your suggesting is, essentially, to unravel 50-60 years of legacy. People have tried and failed. This isn't just a company like GM, a massive institution in its own right, it's all the 3rd party suppliers. I think you're underestimating the work required, even if you assume no worker revolts. I also don't think Apple wants to manage or take on the liability of car divisions from around the world.
- saosebastiao 11y ago
  Quality in auto manufacturing is an iterative process. It took well over 20 years of Deming's iterative process improvement to bring Toyota's production quality up to the standards of GM in the 1970's...as pathetic as those standards were. It took 40 years of protectionist subsidies, tariffs, and hundreds of billions of dollars in Korean government investment to get Hyundai to the standard where they could actually export their cars without being laughed at. Tesla has taken 13 years to ramp up production to 55k per year, and that was even after lucking out with a down-on-their-luck Toyota manufacturing division complete with experienced management and auto workers getting dropped from Toyota's production portfolio. You hold them up as a standard for progress, but they are literally a toy car company. Ford started producing cars in that quantity in 1911. 20 years from now, Tesla will still be paying high priced consultants with global manufacturing experience for their experience building cars at scale. Tesla will no doubt succeed if they can keep up that pace, but they have an extremely long road ahead before they can even compete with Nissan or Hyundai in the US in terms of production capacity, reliability, and production costs. That legacy culture that you deride has another name: knowledge and experience. The same Tech-industry "we can do it better than you with no domain expertise" arrogance is exactly the reason why Silicon Valley hasn't made any dents in Health Care, Finance, or Energy, despite the untold billions that their VCs have dumped into those exact industries.