Auto Execs Hit Links, Talk Climate

Traverse City, Michigan – The Management Briefing Seminars, held every August in this resort community five hours northwest of Detroit, got their start as a way for auto industry executives to get in a few rounds of golf on the company dime. Forty-three years later, it’s a mix of “Davos for auto execs” and the ultimate networking forum for the beleaguered leaders of America’s largest industry.

But the golf element holds strong. The session entitled, “Energy, Efficiency, and Climate—What Role for Auto?” was held at the same time as the popular and overbooked golf tournament, and the audience was sparse. While regulations dealing with fuel economy, energy independence, and climate change are forcing wholesale—and very painful—change onto North American automakers, few attendees found it incongruous that golf-based networking took precedence over public policy issues.

The discussions were robust, with tones ranging from grudging acceptance to outright derision. Earlier, Mary Ann Wright, who ran Ford’s hybrid vehicle program and is now CEO of battery maker JCI-Saft, had summarized the views of many executives by saying, “The problem with government is that they’re ignorant, they need to be educated”—about the industry’s lead times, the massive cost of adopting new technologies, and what can realistically be expected from them.

The afternoon panelists spanned the gamut. Industry lobbying efforts were represented by Mike Stanton of the Association of International Auto Manufacturers, which represents automakers with elected officials and government bodies in Washington. He acknowledged frustration among both automakers and consumers at the lack of a coherent national energy policy. And he articulated the reality: Both presidential candidates advocate higher CAFE fuel economy standards, and California’s senators and representatives have huge power to set environmental policy. “What do we know?” he asked. “We know the new President will support climate-change legislation; that the EPA will support California’s ability to set its own emissions standards; that the states will act on climate change if the Feds don’t…and that it will be a bumpy ride for our industry.”

Next, John DeCicco, an Environmental Defense senior fellow, proposed his action plan for the auto industry. First, he said, carmakers must embrace the climate problem as their own, to lead the discussion; second, they should rethink policy prescriptions, focusing especially on bringing the fuels sector under a carbon cap; and finally, they must collaborate to find allies in other industries—perhaps agriculture—to shape regulations so that policies “for heartland industries aren’t set by a pincer movement from the coasts.”

After Beth Lowery, VP for energy and environmental policy, presented a familiar corporate summary of GM’s alt-fuel activities, she urged a greater government role. Among the company’s desires were promotion of energy diversity, setting a clear, attainable, single set of environmental rules (e.g., eliminating separate standards for California), and new consumer incentives, specifically for plug-in hybrids, by 2010 (when GM will introduce two such vehicles.)

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  • Daniel O.

    I cant wait much longer till honda and toyota and even the Big 3 get more then 50+ MPG! Hybrids are the way to go for now and then hopefully plugin hybrids.

  • David Cabral

    Who paid for all this? The Big 3 are losing billions of dollars per year, laying off workers, but can still afford to send executives to play golf?

  • Gerald Shields

    Yeah. You think they would’ve realized how this “golf game” plays with the media, but they probably don’t care.

  • AutoCar-Live

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  • TD

    Aren’t these guys supposed to be capitalists? All they can do is wine about needing more money from government and more solutions from government. Why don’t we nationalize the car industry and fire all of the overpaid executives, because they obviously are bereft of any meaningful solutions to business problems they inflicted on themselves.

  • Jerry

    They feel the costs to do so, however, are being exacerbated by elected officials who have little understanding of the capital costs or lead times required to make those changes.

    translated to “how can we get a tax bailout”

  • Pete Mulligan

    Step 1): Play Golf
    Step 2): On Golf Course share w/ other executives how to reduce Fed Govt regulations
    Step 3): Leave Traverse City in monster SUV’s
    Step 4): At company press conference pretend that you attended the seminars and that you and your company actually care about the environment.

  • GregZ

    “The problem with government is that they’re ignorant, they need to be educated”

    Where is this coming from? Still having a hisy fit over increasing MPGs? Oh sorry you can’t produce 5MPG Hummers I’m crying. Yes it takes time but why does it seem when government puts pressure through policy or regulations, car companies respond fairly quickly.

  • Stevo_mr

    I’m glad all of you know how to run an auto company. You are as ignorant as our government. If a mistake is made it could ruin the company. You can’t just throw a car out there. If I screw up a dishwashr most likely no one will die screw up a car and people die and then sue. A carr has to be quiet, it has to brake, it has to have air bags, it has to be crash tested, the fabric has to wear right. You have to get tooling for a new factory which is an 18 month lead time. It isn’t as easy as other businesses. Cars are designed 4 years in advance and engineered in two years. There are 1300 parts in a car and all of them are made by suppliers. We all know the big three and Toyota are paying the price for developing large SUVs and depending on their profits. Yes Toyota is also laying off people and shutting factories. No one knew that gas would double in price in a year. NO ONE KNEW. The big three had plans in place to replace trucks and SUVs over the next few years but now they have to compress that schedule. Some of you need to work in the automotive business to truly understand what it takes to build 50,000 cars of one type in a year. I once thought like you guys but once I got in the business I finally understood.

  • Shines

    Are you saying that one must be able to play golf in order to run a car company? I admit: I DON’T KNOW HOW TO RUN A CAR COMPANY.
    It is just frustrating to see that Toyota and Honda seem to be doing a much better job at it than GM and Ford are these days.
    No one knew that gas would double in price in a year. NO ONE KNEW. Are you kidding??? Energy analysts have been saying for years that fuel prices were going to rise. You would think that auto makers would be looking at world consumption (especially China and India) and hearing the environmentalists (whether you agree with them or not) (and not the oil industry whether you disagree with them or not) when making decisions.
    The big three had plans in place to replace trucks and SUVs over the next few years but now they have to compress that schedule.
    Sure, – like Ford was going to release the 2009 F150 with the smallest engine being a V8?
    Some of you need to work in the automotive business to truly understand what it takes to build 50,000 cars of one type in a year.
    Some of you in the automotive business need to truly understand what it takes to build 50,000 reliable and efficient cars like Toyota does each year.
    Sorry to rant, don’t like being called ignorant when it’s not the real issue.
    I do give GM credit (as a consumer – not an automotive insider or expert) for moving forward with the Volt and other hybrid/fuel efficient technologies.

  • Anonymous

    Stevo, as a consumer, I really don’t care how hard it is to build a car. Now I’m just a lowly consumer, but I do know that some car companies have more flexible manufacturing facilities that can attempt to take the edge off rapidly changing markets. If your company does not have some of those, that’s not my problem. All I care about is buying a car from someone who delivers what I want. How does complaining about the difficulty in your industry help you sell cars to me? Am I spuposed to sit in the show room and say “this car doesn’t have what I want, but it looks like it was really hard to make, so I should buy it anyway”? The difficulty of the build has absolutely no influence on my buying decision. Complaining just generates negative PR. If one car company can do it, you can too.

  • Anonymous

    I am not saying you have to play golf to run a company and it is disappointing to see sometimes. Hopefully I can explain this point again. If you knew gas would double in price this past year then you must be a millionaire. If you have tracked oil prices over the years somewhere in 2012-2013 we should have run into gas at todays prices. So as a CEO of a company you make your decisions based on these facts. If it takes you 4 years to get a car to market when do you think the decisions are made. The F-150 is coming out with a V-6 and possiibly a turbo 4 cylinder, but yu are not inside enough to know this. Lets see who is winning JD Powers for reliability and fewest problems per car its Ford. Toyota shut down two plants for several months and is retooling 1 other plant ya they are so much smarter than GM and Ford. Ford has been building hybrids for almost as long as Toyota in the US market but you fail to even mention it. What is wrong with their hybrids? By the way I work for the domestic and import companies through a supplier so I do know both sides and how they operate.
    In manufacturing cars Toyota and Honda were well placed. GM, Ford and Chrysler have been moving to this manufacturing scheme as plants come up for retooling and cars and trucks can be put on the same “chassis”. As I said there is a long lead time and a heavy price when you build or retool a plant so you can’t do it all at once. For example there are approximately 36 cars and trucks worldwide that are built on the Camry “chassis”. Ford has approximately 15 cars and trucks built on the Fusion “chassis”. This makes the factory flexible enough to change production. Yes the US domestic makers are behind in this but if fuel prices had played out in a normal fashion this would not have been a problem.

  • Mr SUV

    Anonymous good points. I must say people always take sides as its all governments fault or automakers don’t want to respond. SteveO is right it does take awhile to get up to speed. But its not like CAFE or Cali regulations take affect tomorrow. There is always phased in goals. If Cali didn’t force EV1 and other electrics/hybrids in the 90’s we may never have seen the Prius. Yes government can be a problem, some say diesel cars have suffered bc of over regulation. Lets look at the Volt other car companies including Toyota laughed at the idea, now everyone is scrambling to beat GM to market. One last point some car companies have been more flexible then others. We see in the 90’s and mid 2000’s the cozy relationship with federal government and the car companies. Some did not want to adjust bc they were making huge profits with SUV’s. Every car company wants to sell boats, tanks, and huge trucks with V8’s, thats how they make the most money. But what is needed is EV and Hybrids car companies are going to lose money in the EV market for the first few years but with out government influencing future models we would never have cars that get over 40MPG

    Note to Stevo go to Europe live there and you would really complain about governments role in car companies.

  • steve sharp

    Low car weight (or mass) is the most important requirement for improvement in fuel economy. An electric car, a hybrid car, or a hydrogen car will be more fuel efficient if it is lighter.

    Light weight is dangerous in collisions.
    I have invented a way to make small cars much safer in collisions.
    If small cars are not perceived as death traps, more Americans will buy them.
    Please see my website

    Please help me get some car companies to talk to me.

  • Noz

    How nice of them to pretend they give a rat’s ass.

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