EXCLUSIVE: 2012 C.A.R. Management Briefing Seminars Day 4

CENTER FOR AUTOMOTIVE RESEARCH MANAGEMENT BRIEFING SEMINARS 2012 DAY 4 – It’s a Wrap

By Steve Purdy
TheAutoChannel.com
Michigan Bureau

We wrap up the week today with a few more speeches and some punditry. I’m thinking about what a fresh young reporter might think of the automobile business if she were assigned to cover the MBS without much background in the industry, or interest in automobiles and how they are made. I expect many, if not most, of the sessions would be terminally boooooring as executives, engineers and marketers talk endlessly using charts, graphs and power-points to explain what they do and why. I’ve tried to pick out the tidbits that our auto enthusiast readers might find interesting, but I may be a bit too close to it myself. I find most of it fascinating.

The best speaker today by far was the Governor of Tennessee, the Honorable Bill Haslam, a charming, credible politician who offered no divisive messages. You’ll no doubt recall from yesterday’s report that our Michigan governor, Rick Snyder, announced the formation of the Governor’s Auto Caucus formed with his colleagues from Tennessee, Missouri and Illinois – that’s two Republicans and two Democrats. They expect many more governors to sign on.

Governor Haslam’s state enjoys a major presence of U.S., German and Japanese automakers – General Motors, Volkswagen and Nissan, respectively. He did not prepare a PowerPoint presentation because he said those who rely on those “usually have no power and no point.” He spoke from the cuff about the intense competition between the states to snag auto jobs and how they can and should work together to promote the automotive industry while still competing. Tennessee is leading in the game to bring home these auto jobs and he intends to continue that by emphasizing the education system, both K-12 and higher ed, to prepare a top-quality work force and a reasonable (that is, low) tax structure.

Speaking of education, a tradition over many years here has been the presence of students from various colleges and vocational schools. Students from Focus Hope in Detroit who are studying many different aspects of engineering and manufacturing, along with a gaggle of engineering students from Northern Michigan University circulate with the professional attendees making contacts and learning what makes the industry great. One of the central themes of many of the sessions here has been the declining number of qualified engineers available and the lack of interest of many youngsters in math, science an engineering. It looks as if the struggle to find these people will increase in the upcoming decades. So, the message to our readers is to try to encourage the kids in your spheres of influence to pursue these careers, because there will be a wealth of opportunity there.

The optimistic tone continued with a presentation by Carla Bailo, Nissan’s VP of R&D, who talked about their plans to expand production in Tennessee bringing Leaf production to the Smyrna plant and adding a lithium-ion battery production facility there. They’re doing well in other parts of the world as well with a nearly 50% market share in Mexico. They’ve committed themselves to a goal of an 8% global market share and 8% sustainable profit by FY 2016. Nissan was lagging behind the rest of the industry in product recently but is catching up fast.

One of the topics we expected to hear more about at the conference is the ongoing crisis in Europe and its effect on the auto industry there and here. Of course, that was a part of many broad discussions but we heard little speculation on what will be done, or needs to be done, to mitigate the crisis, or how big an impact that will have on the rest of the world’s auto industry. GM insists it will turn Opel around in spite of many experts’ advice to get rid of it. Both Ford and Chrysler’s U.S. sales is carrying the larger organizations financially keeping them in the black. Standing alone their European businesses would be seriously in the red.

If we were to pick topics that dominated the discussions here I would choose two: the “connected vehicle” in its many forms and the challenge of meeting government-required fuel economy standards.

Cars and trucks are increasingly connected to telecommunications networks, the Internet, surrounding infrastructure and each other. Smaller and smaller electronic processors with more and more power are doing more and more tasks – for good or ill. Some of us old-timers are slow to accept the value of much of this connectivity. The youngsters among us just can’t get enough and lust after every new gadget and system. One big problem is the potential for distraction. On the other side of the equation these electronics have the potential to save huge numbers of lives as they become integrated into our transportation lives.

We can safely say that fuel economy standards will be a huge challenge for both automakers and government regulators throughout the next decade and a half. Automakers express optimism and support for the standards but if we look closely at the whole system we can see amazing complexity and room for manipulation. Again, this conference will be a place where we will be able to sort it out.

These topics and many yet to be imagined, I’m sure, will increasingly dominate discussions at the Management Briefing Seminars in Traverse City in upcoming years.

Center for Automotive Research CEO, Jay Baron, says this is a “quiet year,” reflecting the lack of overt crises. But listening closely I hear a lot of subtle rumbling and expect turmoil yet to come.

Stay tuned and we’ll continue to report on all this for you, our dedicated readers.