C.A.R. Management Briefing Seminars Wrap-up - Day 4
 Future of Auto Industry |
MANAGEMENT BRIEFING SEMINARS DAY 4
By Steve Purdy
TheAutoChannel.com
Detroit Bureau
Sunset . . . sunrise.
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Then, after barely recuperating overnight I drove to the conference center early. The top of the Grand Traverse Resort, poked out dramatically through the low clouds as the rising sun reflected off its top like the overhead lights off the bald heads of some of our colleagues. In the lobby Detroit’s most important morning radio host, Paul W. Smith of WJR AM, was doing his remote broadcast with dignitaries lined up.
We wrapped up the conference today with just a half day of presentations: VW’s US president and CEO Jonathan Browning, GM’s president of North America Mark Reuss, TARDEC’s Paul Skalny (TARDEC is the US military’s vehicular R&D center), Lear’s James Kamsickas and director of the Michigan Department of Transportation Kirk Steudle. That’s just a typical sampling of the breadth of auto industry experts from whom we have heard this week.
Browning said nothing about the UAW’s effort to organize their new Chattanooga factory, rather he spent his time with lots of production numbers, business philosophy, product plans and other esoteric stuff. For me, a fan of fast VWs, the best news was of a new Golf R coming to the US early next year. That got my attention as I was about to doze off. The new little beast will make 256 horsepower and handle like a performance car. Other news is the new Passat’s starting price of just under $20,000 to compete with the other mainstream midsize sedans rather than carving out a premium images.
MDOT director Stuedle, a civil engineer by trade, came here to address highways and the contribution infrastructure makes to the driving environment. For nearly as many years as I’ve been covering the events here in Traverse City we’ve been talking about smart highways, vehicle-to-vehicle and vehicle-to-infrastructure communication, and how we fund our highway systems. “Connected vehicles” he says, will continue to be one of the most important advances in the future of efficient individual mobility.
The major challenge to all highway projects, and even routine maintenance, is rapidly waning fuel tax revenue – sort of an unintended consequence of smaller cars with better fuel economy. Even though the number of miles driven continues to go up, tax collections are down. With even more stringent fuel economy requirements and a political environment that will likely support no new revenue sources of any kind the health of infrastructure in serious jeopardy.
Perhaps the most important speech today was by GM’s Mark Reuss, son of former GM president Lloyd Reuss. Young Mark has made a dramatic rise in the GM administration as both an engineer and a business guy. It became apparent during the later Q&A that he is more excited about engineering than business, though he obviously deeply understands both. Announcing the sixth consecutive quarter of positive earnings since coming out of bankruptcy just about two years ago, he seems to be taking nothing for granted.
A couple weeks ago GM announced plans to offer a diesel engine in the popular new Cruze compact. The new oil burner will achieve around 38-mpg on the highway. Cruze, so far, is a big hit for GM even on the left coast where it posted a 25% increase in a market where they’ve had less than impressive numbers for decades.
Reuss also shared news of products coming from Cadillac - the XTS big car, a front- and all-wheel drive luxury car and the ATS, rear-and all-wheel drive small car. Both are badly needed in the Cadillac lineup if they are to compete with myriad of other luxury brands.
A few other tidbits of news heard here in Traverse City:
Chevy’s subcompact Sonic, due out shortly, is expected to make money for GM, in spite of everyone’s traditional assumption that US automakers could not make money producing tiny cars domestically. GM’s manufacturing engineering chief, Ken Knight, says the Orion, Michgan-built car, based on an Asian platform, will get even more US content as existing Asian components get sourced closer to home.
VW’s Chattanooga plant manufacturing boss claims they are having no discussions with the UAW about organizing the plant, contrary to what the union has been saying. The potential for growth in that plant, in terms of both production and staffing, as well as the German propensity for including labor organizations on at least supervisory boards, has made them a target for the UAW’s Bob King and his pals.
It won’t be long before Japanese manufacturers (suppliers and OEMs) are back to normal or nearly so after the devastating earthquake and tsunami. US manufacturers and suppliers are talking about loosing their temporary advantage.
Turbocharging and supercharging of traditional spark-ignition engines as well as diesels will be one of those technologies we’ll see proliferating. If history is any indication we’ll see some surprises, too, as we reach toward the ambitious government standards for fuel mileage.
Finally, let me rave once more about the best speech of the week by far – that is, the confidence-inspiring talk by Sergio Marchionne of Fiat and Chrysler. It is easy to see how he came to manage two such important companies. After listening to him for a couple of hours I would not hesitate to invest in any company he is running. Those who know me well may caution that I’m a bit too easily impressed.
So, that does it for another year in the beautiful north country of Michigan at the Center for Automotive Research’s Management Briefing Seminars. Tune in again next year and we’ll see if any of this year’s predictions come true.
© Steve Purdy, Shunpiker Productions, All Rights Reserved
