C.A.R.S. Management Briefing Seminar

By Steve Purdy
Detroit Bureau
TheAutoChannel.Com

Monday Report:

Traverse City MI, August 7, 2006; Some folks checked in last night here in beautiful Traverse City, Michigan, the southern edge of what has become known as the “Gold Coast” of Northwest Michigan. TC is the site of the annual Management Briefing Seminars hosted by the Center for Automotive Research of the University of Michigan. David Cole, one of the most quoted and most respected automotive industry experts in the US created and directs the Institute and these seminars.

The Auto Channel is here to see if we can get some insight into the trends, the issues and the problems of the car business. I sit here on day one taking notes at a patio bar at the edge of the beach with a gentle cool breeze blowing off West Traverse Bay. There is about a two-foot chop on the bay and a three-masted sailing ship just furled its sails to motor into the dock. The sun is about 10 degrees above the horizon and will set within about 15 minutes.

Well, I’m just getting acclimated on day one. I’m amazed at some of the industry projects I’ve discovered today. We tend to hear about all the dismal news of the industry every day as the European and Asian automakers continue to eat the lunch of our traditional and beloved American auto makers. Ford lost second place to Toyota this past month. GM and Ford are loosing their respective asses on small trucks and truck-based sport utilities.

As I chat with some new tablemates I’m intrigued by their description of the seminar they’re presenting in the morning - Smart Highways. It seems the Federal government, the major auto manufacturers, with the Michigan Department of Transportation in a lead roll, are pioneering the technology that will allow our automobiles and our cars to communicate.

And, how about this project: Northwood Institute, primarily a training ground for automotive dealership folks is expanding into providing a short-course for auto industry execs. They are expecting this project to help manufacturers stay on the same page.

The painterly sunset just flashed its yellows, reds, and oranges as a cold wind whipped across the East Bay. A pleasant change from the last few weeks of intense heat in the upper Midwest. On the opposite horizon a fresh full moon just popped over the horizon.

Here’s a sampling of the news coming out on day one:

Bankruptcy is becoming more common as an easy way out of financial troubles. Led by Dana and Delphi there were 33 suppliers who hopped into that bandwagon since last year. Respected industry analyst firm, AlixPartners, say that 38% of North American auto suppliers are in “fiscal danger.”

The 4-speed automatic transmission will be a thing of the past in another 8 to 10 years as 6-speed automatics and CVTs improve efficiency.

Chrysler Financial is streamlining the buyer contract process by promoting its “eContract” paperless system.

Rumors of the impending death of the North American tooling industry may be exaggerated, but the industry may look very different than it does today.

Steel prices will continue to rise throughout ’06, already more than 10% higher than they were just over a year ago.

Traverse City is a great wine producing region and as it flows I’ll try to get the scoop on some of the questions I have been mulling over.

What is going to be the effect of ever-intensifying globalization as China and probably India enter the fray?

Will the Detroit 3 be able to overcome legacy costs, legal costs, cumbersome bureaucracies and all the other issue by which they are plagued to catch up to the competition?

Are manufacturer/supplier relations going to get better or worse as the OEMs try to squeeze every drop of blood possible out of suppliers?

And, what about exciting new products for all of us enthusiasts?

Anyway – watch this space for updates on the Management Briefing Seminars.