EXCLUSIVE: 2012 C.A.R. Management Briefing Seminars Day 1

CENTER FOR AUTOMOTIVE RESEARCH MANAGEMENT BRIEFING SEMINARS 2012

DAY 1

By Steve Purdy
The Auto Channel
Michigan Bureau

Here we are again at the beautiful Grand Traverse Resort in northern Michigan overlooking East Grand Traverse Bay. We are immersed in one of the most important automobile industry conferences in the world - the Center for Automotive Research’s Management Briefing Seminars. Information shared here has helped guide and define the automobile industry for more than forty years.

Just imagine the convulsive changes in this business over those four-plus decades. Here at the MBS execs, engineers, media and a plethora of industry insiders have predicted, evaluated and commiserated over the massive changes in this, one of the most important businesses in the country. Sometimes the predictions come true. Often the reviews of history provide insight.

Over these three and a half days we’ll hear from all those folks, plus a few politicians and other hangers-on, hoping to come out with a better understanding of where the automobile industry is going, where it ought to go and perhaps some hint of how we might get there. Like any other business we expect some disagreement on all that.

As you might surmise, it won't necessarily be all work and no play up here in God’s Country. The CAR folks and many others are able to use this forum for entertaining customers, colleagues and guests. All the more reason to be here on what has become known as Michigan’s Gold Coast, where Lake Michigan shorelines interplay with miles of orchards, ski hills, resorts and beautiful small towns. We’ll do our best to report on all of the above so you, our loyal readers, can join us.

The health of the industry is often discernable here where so many of the movers and shakers assemble. I encountered CAR’s president and CEO, Jay Baron, just now and he said attendance is up about 10% and he perceives an unmistakable surge of optimism. We also noticed the numbers of sponsors and vendors appear to be substantially higher. I’ll go out on a limb and suggest that the MBS here is reflecting the strength of the automobile sector that is leading the country’s otherwise tepid economic recovery.

Our first day of conference began with Nissan’s manufacturing and supply chain boss, Hidetoshi Imazu, sharing the lessons his company learned from the massive earth quake and tsunami little more than a year ago that disrupted Japanese auto production on both sides of the Pacific in addition to killing so many people. He insisted that they had been as prepared as they could be having just conducted a comprehensive emergency drill a few weeks before Mother Nature struck. Partly a result of that disaster, but also partly because of the dollar-yen relationship Nissan and other Asian manufacturers are moving more production to the U.S. Case in point: Nissan Leaf electric car production being moved to Smyrna, TN.

Another trend in the auto industry that this old reporter finds endlessly confusing is the need for more “infotainment,” that is, the need for more and more information and entertainment in our automobiles – unnecessary distractions in my view. Marios Zenios is in charge of that area of development at Chrysler and he told the audience here that it is young drivers and their preferences that will determine how that progresses. No surprise there. These youngsters he calls “screenagers” because their screens are such an integral part of their lives. One innovation within the Chrysler system he talked about was their updated Uconnect (due in 2013) that does not need the presence of a smart phone in the car to connect to the Internet. The car essentially becomes a wi-fi hotspot.

Ford’s global manufacturing chief, John Fleming, talked about one of the big labor issues facing the industry – the two-tier wage structure. He insists that system is crucial to his company, and some of the others, remaining competitive. Fleming believes it is crucial that the wage system continue. That will certainly be an issue of importance in the upcoming talks with the Canadian Auto Workers union.

In the hallway we see more data vendors, suppliers and others courting the industry folks here. Continental AG is showing a pedestrian detection system they hope to sell. Apparently they have already sold it to one German manufacturer but they decline to say which one. The system can detect, with good accuracy, objects about 40 yards away, which works for common city driving environments. Conti is at the forefront of that technology and both European and U.S. government regulation are expected to begin requiring them.

After so much turmoil over the past years this year’s MBS may be characterized as a “quiet year,” said one of the CAR officials. With the total auto sales for the year expected to be steadily improving both this year and next. Attendance here at the MBS is up about 10% over last year, says Jay Baron, CAR’s CEO, and he sees more optimism than he has for years.

We’ll see if that holds this week.

Finishing day one we spent the pleasant evening at Continental’s beach party enjoying a light summer breeze coming off the bay. Food, spirits, music and games entertained us until after the beautiful sunset. The party favor in an extremely heavy canvas bag we all went home with – which I speculated might be gold bullion - turned out to be a full, professional bocce ball set.

Stay tuned for more reports from the 2012 Management Briefing Seminars this week.