I do not believe that outsourcing is the future of
I say this because Forbes suggests that it is. In its latest cover story, under the headline “The Next Detroit,” the magazine profiles Fisker Automotive, a relatively new company headed by renowned car designer Henrik Fisker.
The company already sells the $88,000 Fisker Karma, a plug-in hybrid sports sedan that gets up to 100 mpg. And it is developing a $50,000 model, due in three to five years, claiming that it will eventually sell 100,000 cars annually worldwide.
But Fisker is not a manufacturer.
Almost everything is outsourced--engineering, components, the electric power train, manufacturing. No messy work rules to worry about, no postretirement health care. Only design and marketing remain in-house…
History is littered with the failed visions of automobile impresarios like
Fisker acknowledges that to be viable, he needs a subsidy from the
Regardless of whether Fisker succeeds, I’m not impressed either by his business model or Forbes’ take on it.
I believe a true manufacturer that embraces a lean strategy will ultimately perform better than a company based on outsourcing. Apple may be a rare exception, but companies with lean manufacturing in-house avoid the logistics and quality issues that can bedevil an outsourcer. Not to mention the fact that your outsourcing suppliers may ultimately become so skilled at what they do that they choose to become your competitors.
Fisker is not The Next Detroit. The Next Detroit is the Toyota plant in Georgetown, Kentucky, and the Nissan plant in Smyrna, Tennessee, and the plants of other foreign carmakers within the U.S. who understood a long time ago how to do a better job than GM, Ford and Chrysler.