Frankly, Detroit would do well to copy their foreign competitors a bit more often.
Which American car did the Datsun B210 copy? Which car did Porsche's 911 or Mercedes' S-class? Or for that matter, Toyota's Prius?
I see plenty of examples of foreign competition innovating successfully, often at "non-competitive" prices. Detroit's last significant innovation was what? The 60-month car lease? The UAW job bank?
That's silly. All of the auto industry's money is in the middle. Civics, Corollas, Accords, and their competitors. Americans innovate around the fringe in sports cars too. And luxury. They had a hell of a run (albeit brief) with Hummers. Escalades. Mustangs. Etc.
It's just not an innovation problem. It's a cost basis problem.
OK. When Honda started making the Civic and Toyota the Corolla, what American car where they competing against, or copying? (I'll give you a hint: it wasn't a car that was remotely competitive in the small, reliable inexpensive car segment, and probably not one that you'd recognize today as a direct competitor to the first Civic, Prelude, or Corolla. Go drive an '84 Omni and an '84 Rabbit and tell me which is the better car. Or a 70's Chevette and a 70's Civic or Prelude.)
I will grant you that the ur-Mustang was a stroke of genius, reasonbly innovative in the sense of creating visceral demand for a fun and cheap car. Right after the pony cars came the muscle cars, which may have represented the pinnacle of Detroit as measured by getting the country to actually lust after your products, to care about what engine and trim package was in the latest chromed sled to roll down Main Street. Even today, I'm proud to own a 65 hardtop and 66 convertible Mustang, both of which are 5+ years older than I am, and I feel happy to see the smiles of passersby of all ages when they see a piece of proud American history roll by. And that's exactly the problem, the pride is in the history, not the present.
The Mustang and Pontiac GTO debuted over FORTY FOUR YEARS AGO! That's a pretty long drought, and despite their appeal, the C-5 'vette, Fox Mustang, and Hummer (the H1, not that plasticky rebadged Tahoe they call an H3) haven't really hit the same chord, have they? Of those 3, I suspect the vette and H1 didn't make significant annual profits, and almost surely not what Porsche makes on the 911 alone every year, nevermind the significant profits they bank on the Cayenne. (And all 3 of those together, over their entire production run, certainly didn't make what Porsche made this year on VW options alone!)
By way of background, my 3 registered and insured cars are all American; I don't have a huge axe to grind here to justify my own purchases, but as I see it, Japan and Europe are eating Detroit's lunch, and based on my experience with my '96 Jeep, Satan will probably be wearing a winter coat before I buy another new American car. (I do all my own maintenance and help friends maintain their cars, so I see first-hand how my cars and how the Japanese and German competition are engineered.)
FTR, I agree with you that the UAW deal stinks for Detroit. I'm just ALSO unconvinced that if the government paid Detroit $2000 for every car they sold that Detroit would be remotely competitive. So while they have a cost basis problem, that's not their only problem, not by a long shot.
I upvoted you, because that's a great point on financial solvency.
However, it doesn't address the long-run problem of how to take back market share from foreign competitors, which is the type of sustainable advantage that I presume Detroit needs in order to thrive.
(I'll also observe that your QED was to a simple P&L equation, not to the thrust of my comment.)
They have strong market share. GM is still #1 here and in the world overall (though just barely). Market share isn't their problem, it's that they have to sell at a loss to maintain it.
The reason Toyota has all but caught up isn't that they're particularly innovative, it's that the Camry can have $2,000 worth of better build quality than the Taurus or Malibu. Same with Corolla vs. Focus.
Japan gets to choose to either build the same cars and sell them cheaper, or build better cars and sell them for the same price. It's hard to win market share in that scenario.
Which American car did the Datsun B210 copy? Which car did Porsche's 911 or Mercedes' S-class? Or for that matter, Toyota's Prius?
I see plenty of examples of foreign competition innovating successfully, often at "non-competitive" prices. Detroit's last significant innovation was what? The 60-month car lease? The UAW job bank?