2008 MANAGEMENT BRIEFING SEMINARS - TRAVERSE CITY DAY 2

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By Steve Purdy
TheAutoChannel.com
Detroit Bureau

STEVE: We’re here for the news as well as the insights. Toyota’s Steve St. Angelo, senior VP of engineering and manufacturing, revealed in interviews with Wards AutoWorld that they are considering manufacturing the new Highlander Hybrid in the US alongside the regular Highlander which was recently redesigned. They’ll also be building the popular Prius Hybrid in the new Tupelo, MS plant. With light truck (Tundra) sales drastically down in the US, Toyota is considering exporting that product. They’ve idled the Tundra plant until November because of large inventories.

Toyota’s heretofore large profits have pretty much gone away in the face of the dismal US car and truck market, now estimated at about 12.5 million vehicles, the worst in decades.

What would you advise your favorite young person who wanted to study engineering in college – particularly in Michigan? Would you talk about how the major employers of engineers in Michigan are getting rid of engineers at an unprecedented pace? Well, Dr. Leo Hanifin, Dean of the College of Engineering Science at the University of Detroit Mercy, would encourage your youngster become an engineer, but a more broadly educated one. Dr. Hanifin notes that in the US only about 4.5% of college students study engineering. In China that number is 45%.

But it is not just those raw numbers that are worrisome. It is also the curriculum that we’re not designing to meet future needs. Engineers, he insists, must be taught to be innovators, entrepreneurs, communicators, artists, managers, as well as engineers. After all, we must find creative ways to use those creations in more ways.

“Instead,” Dr. Hanifin says, “we’ve educated “Dilberts,” content to live their lives in cubicles keeping their heads down for fear of being caught making a mistake. We need engineers with innovative and entrepreneurial mindsets and capabilities. We need engineers who have the confidence and passion to lead global multicultural teams.” There is certainly no shortage of insights here in Traverse City. Every year I find different automotive industry support systems I had not imagined even existed. Take the Facton company, a German software provider specializing in a package that allows manufacturers to analyze a product’s cost from purchase of raw material through recycling of the used up product. Just think of all the data elements that must go into that process.

Or, how about the Rider company – not just rental trucks anymore. The new Rider facility in Lansing, MI supports the new GM plant that builds the popular crossovers from Buick, Saturn and GMC. Not only do they truck the parts to the GM plant but they also batch and kit the parts in proper sequence to flow into the factory inventory. Supply chain logistics, it’s called. Other trucking companies, like UPS and Penske have been doing that too, but I’ve discovered that Ryder is number one in this business.

An unlikely adviser for automotive product design and execution offered some insights at Monday afternoon’s session on innovation and collaboration. Jim Lecinski, Google’s managing director of the central region, suggested that automakers should be looking toward nontraditional sources of inspiration and input, including its customers, suppliers and employees. Lecinski touted Google’s culture of inclusion and innovation giving them a competitive advantage. I can’t remember the last time a car maker asked for my advise on designing automobiles.

THOM: Connected car technology is one of the biggest and most important of technologies coming. And, the Center for Automotive Research, host of the conference here, is one of the movers and Richter-scale shakers. Five representatives: state (Michigan), federal governments, industry (Ford), and those who provide services spoke to making the car part of the solution to traffic, to connection to the outside world. Saying, “if you can do it at home, in your office, why can’t you do it in your vehicle,” the panel addressed infrastructure problems (sensors in the road, vehicle sharing data, collaboration with weather and accident reporting services;) how some manufacturers are introducing popular connection technologies (Ford and Microsoft’s SYNC;) and the comparative speed differences between OEMs (original equipment manufacturers, the car companies) and the electronics industry. Cars take 3.5 years from idea to sale, your new mobile phone a mere six months. A representative from SEMA, the Specialty Equipment Manufacturers Association, cautioned OEMs that cool requires the easy ability to customize, that more connectivity means owners will demand more personalization.

Connection is coming, how, how quickly, and how pervasively is the question. And – who will pay for things you get for free from Google, weather.com, or CNN?

STEVE: Tomorrow we’ll have a full day and some new information on unexpectedly optimistic views of governmental regulations on fuel economy.

We said there would be a few surprises.