Hey, Detroit: It's About Design!

What's gotten lost in the debate about bailing out U.S. automakers is their lack of creativity and innovation.
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The automotive industry is a great case study on why finance guys should never run a creative company.

That's right. The auto industry is a creative business. If you want to destroy a business that relies on imagination, put a numbers-cruncher at the top and surround him with board members who devour data sheets, and you have a recipe for a $30 billion, no-guarantees bailout.

I have run more than 20 companies and turned around another four. I have written business plans for over 150 companies in just about every field you can think of during the past quarter century. If there is one truism in business, it is that financial types make the worst leaders of businesses that rely on creativity.

Why foreign companies are winning:

American car companies --

General Motors

(GM) - Get Report

,

Ford

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and

Chrysler

-- aren't getting stomped because of high labor costs or massive pension obligations. The reason foreign car companies are kicking the crap out of us is because the vast majority of our cars are dull and uninspiring. Plus, American cars are still fighting the perception of poor quality.

If you look at American cars that compete with the

Toyota

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Yaris, a low-end vehicle, you will quickly understand why Toyota is winning. Most foreign cars are better looking and equipped with more amenities.

Honda

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has come out with a hatchback that has 21 places to hold your cups. My daughter drives a

Hyundai

(HYMTF)

Accent that comes with a 10-year bumper-to-bumper warranty -- and has a cute design to boot.

I recently attended a venture conference that featured a private-equity executive who worked on the acquisition of Chrysler. He told the audience that U.S. automakers have a $1,000-per-car disadvantage to foreign companies that produce vehicles in the U.S. Spread out over 60 months, the average ownership period, and we are talking about a $16-a-month differential.

Understanding the American car psyche:

How many people do you know go into a car dealer and say "Show me your $12,000-to-$15,000 cars"? No one I know. Americans love their cars, and purchasing one, for most of us, is very personal. It's like picking your house.

You want a certain look, style and personality. A person's car is a reflection of his persona. My grandparents drove a souped-up Camaro in the 1980s, with stripes and everything. I asked why they got a car that is typically driven by someone in their teens and 20s, and my grandparents said they felt young and wanted a young person's car.

I drive a Toyota Prius because I like the high-tech look and feel, plus the great gas mileage. Price is a consideration, but it usually comes after falling in love. Sort of like two humans falling in love. You like what you see, and then you determine if you want to make the investment.

Get a visionary leader:

Congress should provide financial support for the automotive industry because it supports a lot of high-paying jobs and, more importantly, the industry is the heart and soul of America. It was our first global stamp on innovation. People all over the world were impressed with American ingenuity because of the car.

What Congress needs to do is find a Steve Jobs for the automotive industry. Remember, Jobs was asked to come back after a finance guy ran

Apple

(AAPL) - Get Report

into the ground, and

Microsoft

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, like a champion boxer, had to carry sad-sack Apple to avoid antitrust problems by injecting $150 million.

Today, when people think of Apple, they think of creativity, resourcefulness, and cool and useful products and services. Apple has over $20 billion in cash and little to no debt. Why? Jobs dreams and encourages others to dream of things that make people say "Wow! I've got to have that!" How much more is the iPhone than the BlackBerry? About $100 more!

Let's look for both men

and

women, because there are a lot of ladies who are motor-heads and fans of NASCAR. I can tell you that, in my house, my wife knows a lot more about makes and models than I do. I can't believe that, among the NASCAR throng, there isn't someone capable of creating, building and selling the dream.

There is no company that cuts its way to success. You innovate your way out. Should the unions get rid of job banks? Definitely. It's un-American to get paid without producing anything, but let's not blame the unions for a lack of vision and creativity.

American automakers can make just as reliable a car and have proven through the Mercury Sable, Ford Mustang and Chrysler 300 that they can develop cars that make our hearts pound. Let's hope Congress is smart enough to ask the car leaders to show them some designs and not just focus on spread sheets.

Marc Kramer, an entrepreneur, is the author of five books and is an instructor at the University of Pennsylvania's Wharton's Global Consulting Practicum, where he serves as Country Manager for Chile.