Published on August 5, 2014

OTHER VOICES: Auto makers need state departments

By Keith Crain, Crain News Service

DETROIT (Aug. 5, 2014) — There was a time in the automobile business when all you did was build and sell cars and trucks.

You might have shipped a few overseas to a distributor or had someone build cars in foreign lands. No big deal; such operations ran pretty much independently.

Ford Motor Co. set up foreign assembly almost immediately after it started to build the Model T in Highland Park, Mich.

Then-General Motors Corp. completed buying Germany’s Adam Opel in 1931 and pretty much left it alone for decades before integrating it.

Heck, Rolls-Royce even built cars in the U.S. almost a hundred years ago.

The world was a different place then.

I don’t know if any car company has an executive title of secretary of state, but it won’t be long before that’s a normal function in multinational firms.

Just last week, former U.S. Secretary of State Madeleine Albright said, “The world is a mess.” That sure is the case today.

Selling cars and trucks in North America is pretty simple, but there are plenty of places fraught with challenges.

How would you like to be in charge of selling Ford or GM vehicles in Russia?

Or would you rather import vehicles into Iraq or Afghanistan? Depending on the market, it could be very dicey.

Lots of folks were selling vehicles and even assembling some in Egypt, but many had to curtail operations in 2011 and 2013. Slowly, things seem to be getting back to normal there.

Argentina just defaulted, and Venezuela appears to be in chaos—so it’s anybody’s guess how automobile companies, wherever they are based, will handle those South American hot spots.

It has to be tricky. Those investments and operations are important to the local economy and are the lifeblood of local auto dealers and importers.

The automobile industry is doing business in a strange and often dangerous world. I think it can be as hazardous to shut down operations in a country as to expand them.

Everyone seems to be rushing to make huge investments in China, but what would happen if the government decided to nationalize the automobile industry? Where would you put that on your balance sheet?

Auto companies may not yet call any executive secretary of state, but it can’t be too far off.

This opinion column appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business. Keith Crain is editor-in-chief of Automotive News and chairman of Crain Communications Inc., TB’s parent company. He can be reached at kcrain@crain.com.

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