TRAVERSE CITY, Mich. - Automakers should create a little Silicon Valley-style excitement in their industry by providing venture capital for high-tech startup firms.
The auto industry needs topnotch software and engineering talent to lead the push into advanced electronics, in-car computing and wireless communications, said Cuneyt Oge, a consultant with Washington, D.C.- based Pittiglio Rabin Todd & McGrath.
Automakers could launch risky startups with between $20 million and $30 million, then offer stock options to attract top people, Oge said.
With the Internet economy scooping up many of the best young engineering graduates, the auto industry must figure out how to attract the 'dot.com' generation, he said.
To succeed, a corporate startup must offer fat compensation, an informal campuslike research environment and freedom from corporate micro-management.
But wouldn't a separate high-tech firm offering huge financial rewards to an elite group of young workers breed resentment at the parent company?
'That's a risk you certainly run,' Oge said. 'But remember, this is a separate company at arm's length from the parent.'
Launching automotive startups won't be easy. Automakers will have to overcome their command-and-control management systems and fear of failure.