Are we ready to fight for those jobs?

It’s no secret that the Big Three are in trouble. Brand identities are weak, dealer and labor contracts are stifling, sales and revenue are down, costs are up and there’s no significantly positive change in the foreseeable future. Recent reports indicate a 30 percent to nearly 50 percent decline in sales among the Big Three. Even Toyota’s luxury Lexus brand has felt the pinch.

Meanwhile, GM teeters on the brink of bankruptcy after nearly a year of bleeding red ink. The fundamental difference between Toyota and its American counterparts — and the only one that matters at this moment — is profitability. A down market and decreasing revenue is challenging for any business, yet somehow Toyota is able to preserve a profit margin, at least for now, while Detroit is in freefall.

In simple terms, the differences lie in the ability of these companies to control costs and adjust to market cycles. For anyone who wishes to learn more about auto manufacturing industry and what led to the chasm that exists between Detroit and, specifically, Toyota, I recommend two books: “The Machine that Changed the World,” (Womack, Jones and Roos, 1991) and “Rivethead,” (Hamper, 1992). The former outlines the strategies and business models that separated American and Japanese auto manufacturers, while the latter provides an astounding and irreverent look inside GM from the production line workers’ revealing perspective.

How does Danville fit into this picture?

Danville has attracted international attention for its economic revitalization efforts and, more importantly, international investment in our region.

With that written, there has been talk of a “mega” industrial site development project in the Bachelors Hall community, ostensibly aimed at automobile manufacturing and/or suppliers. Some might question that approach in this market and this economy. Still others subscribe to a strategy of investing in lean times to become poised for success when the cycle reverses. Needless to say, significant investment in the region by an auto manufacturer would advance Danville’s progress toward its economic goals in real and meaningful ways.

I think it is worthwhile to quickly review some history before making a final judgment of this strategy. Foreign auto makers (Toyota, Honda, Mercedes and BMW) have invested heavily in the Southeast over the past 15 to 20 years. From an enterprise engineering perspective, the Southeast provides a large pool of willing workers, malleable government assistance and good infrastructure. The results have been happy employees, profitable businesses, increased tax revenue and entrepreneurial opportunities — all without union oversight. Even GM looked to the South (Tennessee) when it sought to create a new car company (Saturn) in the image of the Japanese model. Other industries set the tone for southern migration long ago.

While people in this region recognize High Point, N.C., as the furniture manufacturing capital of the United States, a generation ago, that distinction belonged to Grand Rapids, Mich. The furniture industry’s move from Michigan to North Carolina was fueled primarily by cheaper labor, manufacturing capacity, less cumbersome oversight and proximity to raw materials.

Those motivations exist still today — and offshore corporations have taken notice.

Now back to Danville. Is automobile manufacturing a realistic possibility for the region? In the interest of space, I will pose a few questions rather than offer my opinion:

• Will the “Big Three” truly restructure?

• Will the domestic automotive cluster further expand outside the Rust Belt?

• Will foreign producers continue to eye America’s “Right-to-work” states for future expansion?

Those questions are difficult to answer in this economy but, in my opinion, we’d better be ready to compete and anticipate even tougher questions if we choose this economic development path. I know personally of a Japanese auto executive who, after a 15-minute tour of a prospective supplier’s manufacturing facility, decided that his company could not and would not allow that facility to supply his firm.

In fact, he cut the tour short and walked out, unwilling to waste his time or theirs with further discussion.

Are we prepared for tough negotiations that will require creativity, flexibility and a strong command of facts? Do we possess the skills to sell our region’s benefits? Have we done a realistic and quantitative accounting of those benefits, as well as potential liabilities? Can we simultaneously “wow” and reassure our target audience without egos and personal agendas fogging the ultimate objective? Do we understand the message our audience wants to hear? Have we identified the audience?

This is the big league and it could be a “game changer” for our region — but we face tough competition. Are we ready to play ball?

• Cumbo lives in Danville.