A new model for the industry (Or not)

The history of the auto industry is littered with the corpses of people and companies that tried to operate — to borrow Saturn’s tarnished phrase — like “a different kind of car company.”

Of course, today the industry is littered with the corpses and body parts of conventional car companies, too. This industry destroys capital.

So look at the strange new things going on:

— Business superman Roger Penske is buying General Motors’ Saturn brand, essentially as a hollowed-out distribution system. His future product plan? Buy generic cars from around the world.

— A Chinese machinery maker is buying GM’s Hummer brand and wants to buy the patents and maybe make Hummers, too.

— Magna International wins the battle to buy control of GM’s critical Opel operations. The supplier will compete with its customers, possibly including even its partner GM. Russia, here we come.

— Elon Musk, the gifted and talkative young PayPal gazillionaire, plans to make “the best possible product” at his Tesla car company and sell hundreds of thousands of electric cars.

— At this month’s Frankfurt auto show, everybody showed electric vehicles. The end of internal combustion?

Those are just a few of the odd eggs hatching in this global nest. They don’t even include the expansion of aggressive Chinese and Indian auto companies.

So this could be New Paradigm Time. But at the risk of sounding like a wet blanket, I warn: Don’t bet on it.

The mass marketing of expensive, powerful and dangerous consumer products is not as simple as software gazillionaires think. It’s not as simple as the private equity geniuses from Cerberus thought.

There’s a reason that all the world’s top automakers do business more or less the same way. Rick Wagoner, now widely derided as a failure, ran GM more or less the same way that the heads of Toyota and Volkswagen and Ford Motor have been running their companies.

So let’s look at the challengers again:

— Penske’s Saturn? A dealer asks me, “What’s it stand for?” The magic in the car industry is a brand that people pay money for. Penske has done well distributing Smart cars, but those cars stand for something. Gulf States Toyota and Southeast Toyota Distributors do a wonderful job. But consumers buy Toyotas, not Gulf States. Roger Penske is a marvel; his challenge is immense.

— Hummers from Sichuan Tengzhong Heavy Industrial Machinery face the same challenge.

— Apart from the 4.5 billion-euro dowry from Germany, the GM-Magna shotgun marriage is in for a tough time. If GM, soon to be a minority shareholder, can’t absolutely control Opel’s product development, GM has no global future. And the smart Magna guys have their own ideas about how to run this deal. This has the makings of a bad marriage.

— Musk has delivered 700 cool Tesla electric roadsters. I spent a fascinating hour with him at the Frankfurt show. Smart guy. He knows his EVs. He’s doing company stores rather than franchises. And he expects to sell a couple of hundred thousand electric sedans per year without being “a marketing company.”

“We’re a technology company and an engineering company,” he said, “trying to make the best possible product.” The leap from 700 to a couple of hundred thousand requires more than a good product.

— Everybody’s EV? I, too, hope for a pollution-free future. (I’m not too keen on coal-burning electric plants, however.) But as long as oil is cheap and plentiful and a couple of gallons of gasoline can propel a car as far as a half ton of batteries, internal combustion will dominate.

Just a year ago, nobody predicted that the U.S. government would be a major equity partner in the car business. This is an astonishing time.

And some of these new business models may even succeed. Somewhere ages and ages hence, we may look back and see this amazing era as the fulcrum.

Or not.