Go Lean Commentary
Allow me to introduce this concept of planned obsolescence. This is the policy in industrial design and economics that calls for …
… designing a product with an artificially limited useful life, so it will become obsolete (that is, unfashionable or no longer functional) after a certain period of time. [1] The rationale behind the strategy is to generate long-term sales volume by reducing the time between repeat purchases (referred to as “shortening the replacement cycle”).[2] – Wikipedia.
Let’s understand this better: you are a stock on the shelf!
There are planners out there that are designing products that you need that can last longer, but purposely choose to give it a short life so as to force you to “come again” and “buy again”. Considering all the stakeholders in such a transaction: buyers -vs- seller; consumers -vs- producers, who do you think benefits the most? No doubt:
The producer-seller!
So if you have to build an economy from scratch, you should try to forge a producer economy, rather than a consumer economy. Likewise, if you are to reboot an economy, this logic dictates that you should revisit all the consumer industries and ascertain as to whether they can be converted into producing industries. This is especially true of the auto industry.
The book Go Lean … Caribbean asserts that the Caribbean industrial landscape can be transformed so that many basic needs can be provisioned domestically, rather than imported. This is even true of the auto industry. This is the Go Lean quest!
The basic needs in focus of course include food, clothing and shelter. But the Caribbean reality has a supplemental list, consider energy, telecommunications, medical trauma and transportation. Every Caribbean community have a proliferation of automobiles, but despite the 42 million people in the 30 member-states, there are no auto manufacturers in the region at all. Our status is worse than initial appearances, not only do we not have any assembly plants, but no parts suppliers either. We are completely inconsequential on the automotive supply-chain.
The planners in the global automotive industry simply consider the Caribbean region as consumers, and not producers by any stretch of the imagination. This is sad, because many jobs are at stake in the automotive manufacturing industry.
“Somebody, throw us a bone!”
This is the urging of the movement behind the Go Lean book; the book asserts (Page 257) that many jobs can be forged, if we adopt a different community ethos – spirit of a culture that informs the beliefs, customs and practices – and seek to produce, not just consume. The book details this count:
Direct jobs in the design, fabrication and logistics for new autos: 12,000
There is an Old Adage: “Divide and Conquer”. This is the reality of the Caribbean disposition; there are 30 different and separate countries-territories. If we are able to “buck this trend”, a consolidated-integrated Single Market would amount to 42 million people.
If only …
The Go Lean book prepares the business model for transportation solutions in the Caribbean region. The book ask the question: “Why can’t we contemplate our own auto manufacturing business model?” Yes, business model refers to jobs, entrepreneurial opportunities, trade transactions, etc. In addition to these industry jobs; there is also the reality of indirect jobs – unrelated service and attendant functions – at a 3.75 multiplier rate would add another 45,000 jobs.
This constitutes an industrial reboot. We have successful role models to consider … and lessons to learn.
Consider the Republic of Iran. When their society was sanctioned in 1979, their easy access to American, Japanese and European automobiles were curtailed; their solution:
- They developed a domestic auto manufacturing industry for their 82 million people. See this encyclopedic reference:
Iran’s automotive industry is the third most active industry of the country, after its oil and gas industry, accounting for 10% of Iran’s GDP and 4% of the workforce (700,000 persons).[1][2][3][4]
Iran developed a significant automotive industry with annual production of up to 200,000 units under the Mohammad Reza Shah Pahlavi‘s regime. But after the Iranian Revolution of 1979 production drastically decreased due to Iran–Iraq War and international sanctions. Since the early 2000s, automobile production in Iran has grown exponentially. Iran’s automobile production crossed the 1 million mark in 2007/2008. Today, Iran is the 18th largest automaker in the world and one of the largest in Asia, with annual production of more than 1.6 million.[5] In 2009 Iran ranked fifth in car production growth standing next to China, Taiwan, Romania and India.[6]
…
The Iranian manufacturers currently produce six different types of vehicle, including passenger cars, 4WD, trucks, buses, minibuses, and pickup trucks. … About 75% of local output is passenger cars, with pick-ups the next largest category, accounting for around 15%.[9] – Source: Wikipedia.
We have no sanctions in the Caribbean (notwithstanding Cuba). We should, must be able to foster our own automotive productions. Iran did … with both hands tied behind it’s back – see Appendix VIDEO. Hopefully, in the Caribbean, we can at least try.
The book Go Lean…Caribbean – available to download for free – serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU); this is a confederation of all 30 member-states to execute a reboot of the Caribbean economic eco-system. This CU/Go Lean roadmap has these 3 prime directives:
- Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
- Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
- Improvement of Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.
The Caribbean economic landscape is in shambles! This is due to the primary driver in the region – Tourism – being under assault; more and more visitors shift from stay-overs to cruise arrivals. So this means less economic impact to the local markets. As a region, we must reboot our industrial landscape and add more job-creating options.
This commentary has previously identified a number of different industries that can be rebooted under this Go Lean roadmap. See the list of previous submissions on Industrial Reboots here:
- Industrial Reboots – Ferries 101 – Published June 27, 2017
- Industrial Reboots – Prisons 101 – Published October 4, 2017
- Industrial Reboots – Pipeline 101 – Published October 5, 2017
- Industrial Reboots – Frozen Foods 101 – Published October 6, 2017
- Industrial Reboots – Call Centers 101 – Published July 2, 2018
- Industrial Reboots – Prefab Housing 101 – Published July 14, 2018
- Industrial Reboots – Trauma 101 – Published July 18, 2018
- Industrial Reboots – Auto-making 101 – Published Today – July 19, 2018
The Go Lean book stresses that reforming and transforming the Caribbean economic engines must be a regional pursuit. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 12 – 13):
xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.
xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of ship-building, automobile manufacturing, prefabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex … impacting the region with more jobs.
xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.
Accordingly, the CU will facilitate the eco-system for Self-Governing Entities (SGE), an ideal concept for auto manufacturing with its exclusive federal regulation/promotion activities. Imagine bordered campuses – with R&D Concept Cars, test tracks, railroad lines, shipping docks and backup power generations. The focus for the Go Lean roadmap is locally provisioning for basic needs – being a protégé of advanced democracy countries and not just a parasite, thrown hither-and-thither to the winds of change. This is the fallout of the Planned Obsolescence strategy, as further elaborated on in the book (Page 206), with this addition to the definition here:
| The Bottom Line on Planned Obsolescence … Planned obsolescence has potential benefits for a producer because the consumer is under pressure to purchase again, whether from the same manufacturer (a replacement part or a newer model), or from a competitor which might also rely on planned obsolescence. Firms that pursue this strategy believe that the additional sales revenue it creates more than offsets the additional costs of research and development. Critics of this policy claim the process wastes and exploits customers, uses up resources in making changes that at times may only be cosmetic. Supporters, on the other hand, claim planned obsolescence drives technological advances and contributes to material well-being. They claim that a market structure of planned obsolescence and rapid innovation may be preferred to long-lasting products and slow innovation; that market success requires a perpetual innovation cycle. Planned obsolescence works best when a producer has at least an oligopoly. When a market becomes more competitive, product life-spans tend to increase. When Japanese vehicles with longer life-spans entered the American market in the 1960s and 1970s, American carmakers were forced to respond by building more durable products. |
As a community, we would want to be on the driving end – pun intended – of Planned Obsolescence, not the receiving end – we do not just want to be a “stock on the shelf”.
The Go Lean movement (book and blogs) details the principles of SGE’s and job multipliers, how certain industries are better than others for generating multiple indirect jobs down the line (or off-campus) for each direct job on the SGE’s payroll.
This is the vision of an industrial reboot! This transformation is where and how new jobs are to be created in the Caribbean.
The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society. One advocacy in rebooting the industrial landscape is to develop some sort of automotive manufacturing industry; consider the specific plans, excerpts and headlines from the book on Page 206 entitled:
10 Ways to Develop the Auto Industry
| 1 | Lean-in for the Caribbean Single Market The CU will allow for the unification of the region into one market, thereby creating a single economy of 30 member-states, 42 million people and a GDP of over $800 Billion. The people of the region have cars, and will continue to need cars. There is no demand shortages for the region; in addition, the CU as the regional Taxi Commission will also furnish demand for a fleet customized as taxi cabs; modeling the NYC model – see Appendix ZG. The CU will take the lead in facilitating the vertical industries to supply the needs of a domestic auto industry. The CU’s economic engines allows for investment capital to finance the supply mechanisms and a media complex to forge a constant demand. |
| 2 | Do It Yourself – Domestic Manufacturer A domestic auto industry is a great source for jobs for a skilled and high-wage labor force. Fulfilling the automotive needs of the CU market will create a lot of economic spin-off activity. In the US, the Detroit 3 maintains 240,000 jobs, but impact an additional 3 million jobs in related communities; see Appendix C3. By continuing to buy cars from the US, then Detroit gets the multiplier benefits of CU auto purchases rather than the CU; the same for Germany, Japan, etc. The CU will foster the local manifestation of the global auto industry to grow the domestic economy and deduct from the trade deficit. Invitations will be made to entities like Ford, GM, Volkswagen, Fiat, Toyota, Nissan, etc to deploy a local assembly plant in a CU member-state. After one company thrives from this foothold, other firms will definitely follow. |
| 3 | Bring on the future – “Lego” – Modular Platforms Auto manufacturing disciplines are changing. Companies, like Volkswagen (VW) have adopted a modular platform approach that allows multiple brands and models (VW: includes Audi, Citroen, Bentley, Lamborghini, etc.) to share base components: engines, transmissions, ventilation systems, etc. [185] This allows for the global distribution of plug compatible parts to be assembled for models servicing different markets. Assembly plants can be erected anywhere. |
| 4 | Embrace Alternative Energy & Hybrids |
| 5 | Optimize the Logistics Industry Automobiles are assembled at factories, but the ensemble parts are made at supplier plants all over the world. The assembly factories have to receive the parts, just in time, so as to not impede production. [184] The CU will optimize the transportation modes to ensure that doing business in the region is not a deterrent to success. Once the autos are completed, they then need to get to the marketplace, as automakers do not sell directly to the consumers, they distribute through dealerships. So vertical industries are promoted to ship, and relocate completed vehicles. |
| 6 | Exploit Service and Maintenance |
| 7 | Don’t forget “After-Market” Parts |
| 8 | Help Regional Businesses Find Foreign Markets – Export |
| 9 | Promote Auto Shows |
| 10 | Re-capture Recycled Materials |
Automobile transportation solutions are not new for this Go Lean roadmap; there have been a number of previous blog-commentaries by the Go Lean movement that referenced the economic opportunities embedded in the industrial footprint of cars. See a sample list here:
| http://www.goleancaribbean.com/blog/?p=11649 | Righting a Wrong: Volkswagen Emissions Crisis |
| http://www.goleancaribbean.com/blog/?p=8650 | Now it’s Detroit’s turn to rescue Silicon Valley |
| http://www.goleancaribbean.com/blog/?p=7056 | Electric Cars: ‘Necessity is the Mother of Invention’ |
| http://www.goleancaribbean.com/blog/?p=1277 | The need for highway safety innovations – here comes Google |
In summary, our Caribbean region need jobs. A better job-creation ability would help us to make our homeland a better place to live, work and play. In fact, one of the reasons why so many Caribbean citizens have emigrated away from the homeland is the job-creation dysfunction. Creating a new economic landscape will require rebooting the industrial landscape.
Yes, we can … reboot our industrial landscape, and create new jobs – and other economic opportunities.
We urge all Caribbean stakeholders to lean-in to this roadmap for economic empowerment. Other countries with less partnerships have exploited the market opportunities of auto-making; so can we; this Go Lean roadmap is viable. J
Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.
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Appendix VIDEO – Iran Automotive Industry – https://youtu.be/mB8buctuO3w
Published on Oct 26, 2014 – Iran’s leading auto manufacturer, Iran Khodro, has presented five new products at the 2014 Tabriz Auto Expo. This only days after it started the mass production of TU3 engines for type 2, Peugeot 206 cars. IKCO has experienced a boom in production since October 2013. The 2014 production target is 600,000 sets of car and IKCO is already 2% ahead of planning. Meanwhile, the 2014 Tabriz Auto Expo itself is quite intriguing with nearly 450 Iranian and foreign companies taking part. A great chance to see current automobile models, debuts, and the latest spare parts to pimp your ride!
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