Reviving cars and newspapers
Both US legacy industries must innovate (and not just recover) to survive.
What connects American cars and newspapers? Not much, a person might think, except perhaps when a newspaper is flung onto a driveway from a slow-moving Chevy. But even that's a fading event – which is actually what connects them. The fading. And also the need to innovate to survive.Skip to next paragraph
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Both autos and newspapers are foundational to the US. Detroit feeds a multitude of suppliers and dealers, leaving a big economic footprint. Newspapers do the digging upon which magazines, television, and the Internet largely rely. As watchdogs, the print media have a big civic paw print.
They're both struggling financially. This is the worst auto sales slump in the US in 27 years. General Motors and Chrysler, fighting off bankruptcy, have so far received $17.4 billion in government loans. They've requested more.
Newspaper ad revenues are down 23 percent in the past two years. Circulation continues to drop. Nearly 1 out of 5 journalists for newspapers in 2001 is now gone, according to the "State of the News Media 2009" report by the Pew Research Center.
The commonality goes beyond being battered by a deep recession. Not just recovery but transformation is what's required here. And not just for these two businesses, but for other major sectors in America, such as financial services, healthcare, and energy.
The parallel between autos and newspapers isn't exact. It looks as if the federal government will loan more money to GM and Chrysler. No such white knight will save print media (Pew concludes that philanthropic support won't be enough to rescue the entire industry).
Autos and newspapers share points in history. Last year marked GM's 100th anniversary; same for this newspaper. In the 1970s and '80s, the two industries adopted new technology: Robots joined humans on the auto assembly line and computers replaced typewriters.
Yet these businesses only dabbled in developments that are now pushing them to change not only how they make their products, but the products they make.
Their defense might be that no one anticipated business-altering trends that have accelerated like a Ferrari. Oil prices surged and so have demands for cleaner, more efficient vehicles. Readers migrated to the Internet.
But if change came too quickly to anticipate, why did Toyota beat US automakers to the Prius hybrid? Why did Google, instead of a newspaper company, seize the opportunity to aggregate and search information on the web?
"Journalism, deluded by its profitability and fearful of technology, let others outside the industry steal chance after chance online," the Pew report states. Might not the same be generally said of Detroit?
But all is not as discouraging as it appears. Detroit has the tools – the batteries, the hydrogen models, the biofuels – to move ahead. Newspapers are experimenting more boldly with new business models. (Next week, the Monitor moves to a Web-first strategy and replaces its daily paper with a weekly.)
America still needs transport, whether it's the kind that moves people or their ideas. It will take innovation to meet this old demand in a new way. What can be more American than that?