Can auto industry meltdown be stopped?

With gas prices through the roof (well, sort of), the Japanese overtaking Ford Motor Co. in U.S. sales, and American automakers rethinking current structuring, the need for clear guidance about simple, straight-shooting automaking is critical. Charlie Hughes, former head of Land Rover and Mazda, and William Jeanes, a veteran auto journalist, feel they deliver that advice in Branding Iron, a book about the devaluing of American auto brands, the pitfalls of following conventional wisdom, and the need to build a world class brand in an overbranded world.

Released shortly after reports that Ford Motor Co. might become allied with General Motors Corp.--following Ford's 2006 second-quarter loss of $254,000,000--the advice could not be timelier, as the pair point out that, since 2000, GM's market cap has fallen from $66,000,000,000 to as low as $12,000,000,000 and, in 1980, GM sold 45 of every 100 cars that rolled out of U.S. showrooms. It now sells a mere 24.

In addition to an obsessive focus on cost-cutting that drastically has impaired American automakers, Hughes and Jeanes cite the inability to attract growing numbers of customers to GM's numerous brands as a prime reason for failure. In that vein, claim the authors, the answer to the industry's problems can be found in better innovation, smarter risk-taking (including strategic spending, not just cost-cutting), and more effective branding.

Defined as "a promise wrapped in an experience," good branding means standing for something in the market and with your customer. To that end, branding means having the vision and courage to create a product that turns off some customers just as it inspires others. Rather than homogenizing the automobile industry, Hughes and Jeanes propose that the industry set forth and commit to clear, compelling brand strategies, all the while unafraid to test the waters of change.

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