EXCLUSIVE: 2012 C.A.R. Management Briefing Seminars Day 3 - Governor and Presidents

CENTER FOR AUTOMOTIVE RESEARCH MANAGEMENT BRIEFING SEMINARS 2012

DAY 3

By Steve Purdy
TheAutoChannel.com
Michigan Bureau

Traditionally, day 3 here at the CAR Management Briefing Seminars feature Michigan’s governor and this year was no exception. The Honorable Rick Snyder is a business guy who is a CPA and ran as “one smart nerd.” Formerly the owner of Gateway Computers, he claims an understanding of manufacturing and all aspects of business. He made an impassioned pitch for doing business in Michigan and offered what seems to this reporter as an enlightened view of the auto business as well as reforms desperately needed.

A big issue in Michigan over the past couple of years, ever since Governor Snyder came on the scene, is the proposal to build a second bridge across the Detroit River from Windsor, Ontario to Detroit, just a couple miles downstream from the existing, 83-year-old Ambassador Bridge. The owner of the existing bridge has stirred up controversy over who will actually pay for the new span. He has reportedly spent $10,000 on what the governor calls dishonest and misleading ads and initiating a referendum. He has also been accused of buying off of the legislature. It has been quite a circus. The governor brashly circumvented the legislature and inked a deal with Ontario in June to do the project with the latter footing all the expenses except building the customs gates. It is the governor’s contention that the new bridge is crucial to maintaining and expanding automobile and other business connections between the U.S. and Canada.

Dr. Roy Norton, Canadian consul general, preceded the governor on the podium and minced no words in slamming the motives of the Ambassador’s owner, billionaire Matty Maroun, who now has a monopoly on both toll traffic and duty-free sales at the bridge, calling his attempts to kill his competition a “cynical and manipulative campaign.” Norton notes that more than � of U.S.-Canadian trade is automotive and that most of the Canadian auto business is in Southern Ontario making it crucial that we do not rely on that old structure for all our commerce. There is no controversy about the bridge in Canada, he said, and if you took Maroun out of the equation there would be none in Michigan either.

After the governor and the consul general we heard from Toyota Motor Sales’ U.S. president and CEO, Jim Lentz. He used to age-old metaphor of flying geese to illustrate his point that collaboration and joint projects must supplement any automaker’s R&D. He cited joint projects they have with BMW, Ford and even Tesla. The latter is collaborating on the full electrification of a RAV4 due out in 2014.

For your entertainment, I can’t resist expanding on the goose metaphor. Lentz only talked about the scientific revelation that flying in the ‘V’ formation results in an aerodynamic effect where the leading geese make eddies in the air that provide extra lift for the following geese. He didn’t refer to the other elements of that oft-used metaphor like the loud honking in formation encouraging the slower geese and that the leadership changes periodically as the leader tires and another takes over. I’m always amused at the answer to the other question: “Do you know why one arm of the ‘V’ is always longer than the other?” Answer: “Because there are more geese in it.” We often take our metaphors too far, do we not?

Governor Snyder took the opportunity today to announce the formation of the Governors Auto Caucus composed so far of the chief executives of Michigan, Tennessee, Illinois and Missouri. Citing the 8 million jobs the auto industry supports in the U.S. the caucus will be open to all governors and will provide a forum to discuss “bipartisan, non-controversial issues related to the industry . . .” The forum will also be a structure for lobbying the federal government on issues related to the auto industry, like the establishment of an energy policy.

We also heard from Honda’s new president of U.S. R&D this morning. Eric Berkman has been with the company for many years starting his career at the Marysville assembly plant. He gave a good history of the plant’s growth and innovations but he said he was most proud of the decision that the new NSX halo sports car will be developed and built by Honda teams here in the U.S. and that it will be developed for world markets. Honda also announced and showed photos just today of the 9th generation bread-and-butter Accord mid-size sedan.

One of our afternoon sessions centered on a scary prediction about some of the connectivity features we’ll be seeing in our cars in the next few years, or the next decade. A maker of teeny-tiny microprocessors the size of a fingernail with power enough for a moonshot showed some of what they will be able to do with that power. He insisted that before long our cars will be as web-connected as most of us are now with our tablets and smart phones. One challenge, of course, is how to keep the driver from being distracted by all that stuff.

Toyota’s U.S. president, Jim Lentz, talked about the struggles of their Lexus luxury division after loosing the lead they had established over competitors from Germany. If the newly redesigned Lexus GS350 sport sedan we reviewed last week is any indication they may get back to the small lead they enjoyed in the market. The GS beat the pants off comparable BMW and Mercedes-Benz cars when we drove them back-to-back last fall.

Back to powertrains for a moment – Chrysler’s Bob Lee, vice-president of engine and electric propulsion engineering said his company is working on as many energy-efficient powertrains as possible but not concentrating on electrics and gas-electric hybrids. In fact, bucking the trend a bit, they will be looking more closely at diesels. With Chrysler’s alliance with European Fiat they will have access to lots of diesel technology. “We believe in diesels,” he said.

Rounding out our extracurricular activities was the annual Sunset Dinner at the Culinary Arts School here in Traverse City. Autocom Associates, a PR firm representing a number of tier one and tier two auto suppliers, and their clients get together to host a sunset dinner for media a few others where Michigan foods and wines are featured. Helping create the menu is Chef Jean-Pierre, whose day job is as Belgian consul based in Chicago. Autocom’s founder, Larry Weiss, Jean-Pierre and the staff at the school created nine courses of wonderful local foods paired with a half-dozen Michigan wines. Overcast skies meant we didn’t get the usual dramatic sunset views from the dining room facing the bay, but I can confidently say, we barely noticed.

Our next report will wrap up the conference. Stay tuned.