panel of automotive analysts spoke to the media about the
future of the industry inside the Detroit Marriott at the
Renaissance Center on Tuesday.
Daniel Howes, a
business columnist and Associate Business Editor for The Detroit
News, began with what we know now about the automotive industry.
He claims that the Delphi bankruptcy was the Berlin Wall of
Detroit and there is a big "for sale" sign in Detroit.
"Only in Detroit,
they pay people not to work, make more cars than we need and
then pay people to buy them. We also know that gas prices
have increased over the years and Washington don't care about
the domestic auto industry," Howes said.
The biggest enemy
in Detroit isn't Toyota, greedy unions or fat cat CEO's. The
biggest burden is Detroit's culture, not enough opportunity
and no diversity. We know what works, its people. Not union
vs. management, union vs. designers, but culture. Success
has accumulated over 70 years, then there was stagnation,
then decline. So where do we stand?
they have to do more of the same. They have sensational products
and the Saturn Aura was voted Car of the Year. UAW President
Ron Gettelfinger has the toughest job in Detroit. Strikes
could threaten viability of the companies and there will be
sacrifices in the '07 talks," Howes said.
Tom LaSorda is on the hot seat. Daimler Chrysler signed an
operating agreement with Chery. They are bringing Chinese
cars to America and building American cars in China and shipping
them back here.
With Ford, Alan
Mulally's favorite words are Reality and Perspective. Neither
is at the Rouge. The only thing that matters to him is that
Ford is competitive.
Culture here is
not moving forward, we wait too late then there is a crisis.
There is a lot of dislocation in Michigan. Opportunities in
Michigan are limited. Entrepreneurship is not embraced. If
you buy foreign, there are economic consequences.
its not all about the product, I don't think that's true.
It's the way they do business. The Japanese are making a lot
of money. Americans are buying more foreign cars at the expense
of American cars. Even though American cars are just as good
or better, the styling is better. Foreign cars are not American
companies, unless they are on the NYSE and the CEO's and managers
live in the United States," Howes added.
Wim van Acker,
Strategy Consultant from Roland Berger says entry level cars
(from $10,000 or less) are emerging in the United States,
and quickly developing in Europe. "Forty percent of Western
Europe is entry level cars. They key to success is Car, Care,
Core," van Acker said.
need a good and safe vehicle which is crash tested and emission
tested. Secondly, We need to offer extra services such as
warranty, low price, low insurance and good maintenance/repair
service. Lastly, we need to focus on your core business (e.g.
med-heavy duty truck)," van Acker added.
Mike Robinet, Vice
President of Global Forecast Services at CSM Worldwide
says there is a high demand of entry level cars in Western
Europe, Russia, China and India. "Oil prices will determine
production trends. Who develops these vehicles? Sixty percent
are made in Japan and South Korea. India and China will have
significant growth volume," reports Robinet.
Kim Korth, President
of IRN, a leading consulting firm for global automotive suppliers,
says "from a supplier point of view that the low cost
locations to build these cars are in Mexico, Eastern Europe
and China. Her primary focus is to strengthen the competitive
position of their automotive supplier clients."
Jim Press, President
of Toyota Motor North America, Inc. says that Detroit is a
gold mine of opportunity. They have people here who are experts
in Research & Development. His company is doing well because
he doesn't care about the being number one, or having the
highest production levels or doing well in the stock market.
He focuses on what people want. Satisfying the needs of the
customer is number one to him.
The U.S. auto industry
is hurting, but it is not as bad as most Americans believe.
The analysts believe this is just a cycle and will rebound
in the next few years. Technology will play a big part in
it. We need to be cautious of our decisions and make the right
ones. Detroit's future depends on it.
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