The principals of the U.S. domestic automotive industry are, at long last, meeting on Tuesday, Nov. 14, with President Bush to discuss the challenges the industry faces, and (we assume) how Federal leadership can play a role in overcoming them. In the spirit of acting as an honest broker, we offer the following short list of principles that might help the President and the principals.
Recognize the urgency. The domestic automotive industry is undergoing a very painful restructuring due in large part to their over-reliance on fuel inefficient SUV and pickup trucks. We all hope they will emerge a stronger industry and we will emerge a more secure America, but such favorable final outcomes are far from certain.
Focus on energy. The automobiles produced by the industry do not operate without fuel, and today that fuel comes from oil. Changing this makes business sense. The less dependent on oil our cars can be made through the use of new technologies, the less vulnerable the car companies are to volatility in oil prices. Changing this makes geo-political sense—our addiction to oil compromises our national security, as we send billions to terrorist regimes who own the oil and spend billions protecting our access to the oil.
Focus on technology. America has a great advantage globally in human and intellectual resources. Our science and engineering colleges dominate most, if not all, international ranking, giving our industries access to the best and the brightest of tomorrow’s technology. The world’s other global automotive manufacturers clearly recognize this American strength, and already have or are creating research centers here.
Focus on jobs. The trend of moving more and more manufacturing jobs to places like China and India may be inexorable in the long run. But American workers are the most productive in the world, and with the right products and the right technologies (in the products and in the manufacturing plants) manufacturing jobs will be a critical part of our economy for a long time to come.
Focus on working together with all stakeholders. The auto industry has a broad set of stakeholders that ought to be brought together under Federal leadership to formulate solutions to address the industry’s problems and meet America’s needs. Stakeholders include labor, management, non-profits, academics, consumers, and citizens.
Walter is the Director of the Automotive Analysis Division of the University of Michigan Transportation Research Institute (UMTRI). He studies the adoption by consumers and automakers of new powertrain (electric, hybrid, clean diesel, fuel cell, alternative fuels), safety, and telematics technologies. Walter worked for General Motors for 9 years in sales forecasting, product development, marketing, and manufacturing (1993 found him on the floor of one of GM’s component factories). Prior to joining the University, he was Executive Director of Forecasting and Analytics for J.D. Power and Associates. He earned his doctorate in Economics from UCLA in 1983.