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U.S. Foreign Policy and the Car Industry — Brothers in Arms?

What surprising parallels emerge between the beleaguered U.S. car industry and U.S. foreign policy?

March 16, 2007

What surprising parallels emerge between the beleaguered U.S. car industry and U.S. foreign policy?

Building attractive automobiles is an art and a science mastered by quite a few nations around the world. But one major nation that has considerable trouble with this task is the United States of America.

As the Washington Post headlined on its business page recently ("Foreign Domination: Dealers Face Growing Bias Against American-Made Cars") even U.S. consumers now prefer to buy foreign.

For a patriotic nation, it is quite an astounding turn of events. Most Americans have always found it more natural to drive a car manufactured by a big American car company.

Too often, U.S. cars still look like slightly updated versions of your daddy's mid-1970s clunky design. Still no cool interiors. Instead, it often seems as if Soviet designers had gone wild with luxurious materials, using all the right inputs — but none of the required feeling. The prevailing sentiment is that of sitting in a tank, no matter how elegantly draped.

So why does this lament matter? Because in an eerie fashion, it represents a parallel to U.S. foreign policy.

It, too, was once the envy of the entire world — towering high above all others that barely qualified as competition. It shaped international institutions, helping many a nation stuck in backward-looking, small-minded enmities find a path to a more prosperous future.

Most significantly, its market power — like that of the U.S. car industry — was truly over-powering. But just as GM, Ford and Chrysler have faded, so has U.S. foreign policy. The prolonged leadership crisis at the top of the Ford Motor Co. resembles that of the listless U.S. State Department.

There, the incumbent Secretary, Condoleezza Rice, had so little drawing power that, for over half a year, she had great difficulty in attracting a Deputy Secretary of repute — before John Negroponte recently accepted the job. That was all the more stunning since this is a time when U.S. foreign policy is in true crisis, guided by a secretary who seems out of her depth.

Betting the farm — as the newly installed Ford CEO Alan Mulally has done — is an approach that could be right out of the Bush Administration's playbook. The Ford Co.'s new leadership team had to mortgage every single asset not yet encumbered in order to obtain the funds required to finance a survival plan.

It even offered the Ford brand itself as a security in case of default. The Bush Administration, for its part, has yet to arrive at such a day of brutally honest reckoning.

For all the grand talk over the past few years of a big turn-around at Ford, nothing really happened. Everybody in management pretty much kept going about their way as before, stuck in their own little world of presumed superiority and uniqueness.

Yes, there was a drastic reduction of the manufacturing work force, but that alone does not a strategy make. And yes, at long last, Bill Ford stepped aside as CEO, but the jury on the turnaround is still out.

The only real difference between the car company and the Bush Administration, of course, was that Ford — for some part of its reinvention — was tooting the horn of becoming a green company, in sharp contrast to the pronouncements of the Bush Administration in this field.

Come to think of it, Mr. Bush's constant pronouncements of advancing the cause of democracy around the globe proved barely more credible than Mr. Ford's embracing of the environmental theme.

But what really matters are deeds, not words. And there, the extreme dependence of profits on the continued commercial success of SUVs at Ford and GM was every bit as short-sighted as the Bush Administration's insistence on unilateralism.

To anybody with any sense of judgment, it was clear that both strategies were the equivalent of driving straight into a thick concrete wall, with the foot glued to the gas pedal — and hence doomed to crash.

The tragedy is that a good brand — that of U.S. foreign policy — has been soiled, and soiled badly. It will take a long time to resurrect it.

After all, just as U.S. car companies are still wedded to gas-guzzling SUVs, so is U.S. foreign policy overly dependent on force projection — and, to make matters worse, in a manner not really supported by the military itself.

And measured on a dollar-for-dollar basis, the effectiveness of U.S. foreign and security policy is about as poor compared to its competitors as the degree to which U.S. fuel efficiency underperforms that of other nations.

Other nations may be smaller in total size, but they end up with way more appreciation and acceptance than will either the administration or U.S. car manufacturers for the foreseeable future.

In the end, the saga of the U.S. car industry and of U.S. foreign policy is that of a preventable, but predictable disaster. If one keeps doing what worked in the past and insists on accepting as few foreign inputs as U.S. car manufacturers have done for so long, one ends up with the worst of all worlds.

Uncompetitive, overpriced and lacking support even at home is not a comfortable judgment. Yet, it is the most appropriate one.

The lesson to be learned is a crucial one: Embrace best practices, keep an open mind, integrate new ideas (even, and especially if, they were not invented here). Make the best for your own nation (and car companies) out of the smorgasbord of global inputs, while preserving as best you can your own nation's (or car manufacturer's) distinctiveness.

That is what keeps a nation's foreign policy and car brands alive. Going it alone, rejecting all inputs (other than from the blindly willing) is a recipe for a great — and saddening — loss.