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2007 NAIAS :: Detroit Auto Show :: Reviews + Interviews

Highlights from the 19th Annual SAA Automotive Outlook Conference

by Gloria Rzucidlo
gloria1025@yahoo.com

 


DETROIT -- A 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?

"With GM, 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.

With Chrysler, 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.

"People say 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.

"First, we 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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This page was last updated on Thu, January 11, 2007 0:34 AM

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