CAR MBS 2012 Event Summary - Center for Automotive Research

CAR MBS 2012
Event Summary
Leveraging Leadership, Maximizing Momentum
A Recap of CAR’s Management Briefing Seminars
August 6-9, 2012, Traverse City, Michigan USA
This Newsletter is a special summary of the topics and discussions presented at this year’s CAR
Management Briefing Seminars (MBS). The event drew close to 900 attendees from automotive
manufacturers and suppliers, financial firms, government, economic development organizations,
educational institutions, and the media.
Michigan
Governor Rick
Snyder
addresses CAR
Management
Briefing
Seminars
attendees.
Michigan Governor Rick Snyder kicked off the Wednesday morning session, showing strong support for
both Michigan’s automotive industry, and one of the industry’s top priorities—building the new
International Trade Crossing (ITC) between the United States and Canada. The Governor emphasized the
economic importance of the ITC to the auto industry and to Michigan (see CAR’s independent study on
the projected jobs and economic impact of the bridge). The Consul General of Canada, Roy Norton, who
also addressed attendees, agreed with Governor Snyder’s comments, saying the 83-year-old
Ambassador Bridge is “a pretty fragile reed” on which to pin the future vitality of the North American
auto industry.
Governor Snyder also announced the formation of the National Governors Auto Caucus at MBS. Snyder
worked with Governors Jay Nixon of Missouri, Bill Haslam of Tennessee, and Pat Quinn of Illinois to
create this new forum for governors to discuss common issues that impact the automotive industry.
Tennessee Governor Bill Haslam addressed the conference attendees on Thursday, and added that the
National Governors Auto Caucus will focus on bi-partisan work in support of automotive policies—
including environment, tax, and safety.
The plenary sessions were moderated by Dr. Jay Baron, CAR’s President
and CEO and Dr. Sean McAlinden, CAR’s Executive Vice President of
Research and Chief Economist. Speakers addressed several key themes
of the conference, including engineering challenges related to the new
federal fuel economy standards, the critical issue of human resources
and skills development, and the uncertainty that persists in the industry.
Dr. Jay Baron, CAR’s President & CEO
Engineering Challenges
Toyota Motor Sales U.S.A.’s President & CEO Jim Lentz
described meeting tough new fuel economy regulations
as one of the greatest challenges to the industry. Both
Toyota and Honda announced they are targeting 2015 to
introduce hydrogen fuel cell vehicles. Dr.-Ing. Werner
Struth, Member of the Board of Management, Robert
Bosch GmbH, projected that while electric vehicle
technologies will be important, the internal combustion
engine will remain dominant for the next 20 years. Erik
Toyota's Jim Lentz takes media questions
Berkman, President of Honda R&D Americas added that
vehicle mass reduction is not just a trend for regulatory compliance, and that he sees vehicle
lightweighting as a broader trend in the industry. “Suppliers are key to driving vehicle lightweighting,”
according to Jan Kowal, Chairman of Brose North America, a global supplier of mechatronic and electric
automotive parts and systems, and auto suppliers are being driven by materials producers. He added
that collaboration among automakers, suppliers, and materials companies will be required to achieve
lighter-weight vehicles. Berkman, Kowal, and Carla Bailo, Senior Vice President for Research &
Development at Nissan Americas all addressed the need for collaboration within the industry to provide
the full portfolio of technologies the market demands. The CAR MBS also included special sessions
dedicated to manufacturing, tooling, powertrain, and
connected vehicles.
Human Resource Challenges
Many of the speakers throughout the week mentioned
the critical need for talent in the auto industry, which
was also the focus of a special MBS session “Surviving
the Skills Shortage” (see section below). Neil DeKoker,
(Left to Right) Dr.-Ing. Werner Struth - Robert Bosch
GmbH, Alicia Boler Davis - General Motors, Carla Bailo –
Nissan, and Hans-Werner Kaas - McKinsey & Company
President and CEO of the Original Equipment Suppliers Association, said hiring is a top concern for many
of his members in order to meet 2012 production volumes. The plenary speakers emphasized that the
challenge to innovation is attracting and developing the talented people who can help create future
demand for vehicles, products, and systems. Honda’s Berkman indicated that the skills issue is a key
consideration when his company assembles global product development teams. Nissan’s Bailo added
that Detroit is known as the center for automotive engineering expertise and innovation, and that this
region is critical to the future of the North American industry. Nissan is also expanding the types of
engineers it hires beyond the traditional mechanical and electrical engineers, to include other fields such
as chemical and biomedical. Governor Snyder emphasized the high-tech nature of today’s automotive
industry, and both he and Susan Cischke, a retired Group Vice President for Ford Motor Company
suggested the need to show more people what auto manufacturing jobs are really like now in order to
attract more young people to careers in the industry.
Market Uncertainty
The sluggish recovery from the recent recession, and the lessons learned during the downturn, has
made automakers and suppliers more cautious about the future. Several plenary speakers spoke of how
their companies transformed their business during the past few years, and that the lessons learned in
the crisis are helping them navigate the challenges ahead. The plenary speakers described a revived
“consumer focus,” as automakers battle for shares in a much smaller market. Hans-Werner Kaas, a
Director and Senior Partner at McKinsey & Company, pointed to the proliferation of models in all
markets as evidence of increasing competition. The Vice President of Global Quality and U.S. Customer
Experience at General Motors Company Alicia Boler Davis, said GM is focused on bringing new models to
market, and transforming to be a “top-to-bottom customer-focused company.” Speakers discussed
investments their companies are making in products and production capacity, but expressed concern
the supply base may not have the capacity needed to fulfill rising demand for vehicles.
The challenge of meeting the demands of the future
market was a related theme in the discussions at
MBS. Toyota’s Lentz said his company is focusing on
developing eco-friendly, stylish products that are
“loaded with tech” to keep “millennial” drivers safely
connected. Mitch Bainwol, President & CEO of the
Alliance of Automobile Manufacturers, presented
detailed survey data on the public’s opinion of the
automotive industry, as well as several specific
technologies. Bainwol said younger consumers are
Mitch Bainwol, President & CEO of the Alliance of
more positive on automotive technological advances,
Automobile Manufacturers
such as connected and autonomous vehicles, but
while nearly two-thirds of the survey respondents think it’s “very or somewhat important” for the
vehicle they buy to be built in the United States, that support falls off among younger consumers.
In this Newsletter - MBS Session Summaries:
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Global Manufacturing Strategies
Tooling Up for Tomorrow's Automobiles
Connected Vehicles at the Crossroads
Advanced Powertrain Forum
Where Have All the Sales Gone?
Money Matters: The New Purchasing Landscape
Surviving the Skills Shortage: Hiring Strategies and Solutions
The Designing for Technology (and the Consumer) Forum
What Do We Benchmark Now?
CAR appreciates all of our MBS sponsors and exhibitors who help support and enhance the event
experience for MBS attendees.
Mark your calendar for CAR’s Management
Briefing Seminars – MBS 2013, Aug. 5-9, 2013
Planning for the annual CAR Management Briefing
Seminars is almost a year-round activity at CAR.
For more information on how your organization can
be engaged in 2013’s event, please contact Lisa
Hart, 734-929-0465 or [email protected]
Networking at CAR’s MBS 2012
For More Information: The complete agenda,
speakers list, and selected presentations are
available at www.cargroup.org Click on “CAR
Management Briefing Seminars” in the Events
section.
Global Manufacturing Strategies
With a focus on global practices, technologies, and strategies that increase operational efficiency,
response speed, flexibility, and quality in automotive manufacturing, this session was moderated by
CAR’s President and CEO Dr. Jay Baron who also leads CAR’s manufacturing research. The domestic
automakers now have a much smaller manufacturing footprint, and all automakers are more cautious
about expanding capacity, so they are focused on streamlining operations and optimizing production
output. Automakers are also re-examining the strength of their global supply chains in the wake of the
economic crisis, the Japanese earthquake and tsunami, and other events that have revealed weaknesses
in the automotive supplier sector.
John Fleming, Executive Vice President of Global
Manufacturing and Labor Affairs at Ford Motor
Company said Ford’s goal is to have all plants
operating on three shifts, 5-7 days a week, aiming for a
27 percent improvement in capacity utilization by
2016. In support of this goal, Ford has reduced the
number of global platforms, allowing for greater
flexibility and a quicker response to shifts in market
demand.
John Fleming, Executive Vice President of Global
Manufacturing and Labor Affairs at Ford Motor Company
To increase efficiency, reduce errors, and prevent
injuries in its plants, Chrysler is broadly deploying advanced 3-D simulation and manufacturing software
developed by Strategic Manufacturing Partners, a Sterling Heights, Michigan-based firm, said Brian
Harlow, Chrysler’s Vice President and Head of NAFTA Powertrain Operations and Global Powertrain
Manufacturing Engineering. This software allows Chrysler to do nearly all of its risk analysis virtually, and
helps guide the company’s strategic machinery and equipment investment decisions.
Scott Whybrew, Executive Director for Global Manufacturing Engineering at General Motors, detailed
how his company transformed the Orion Assembly Plant in Lake Orion, Michigan for production of the
Chevrolet Sonic and the Buick Verano. Whybrew discussed the new manufacturing systems in the plant
including the use of a geo-conveyor on the floor to cut costs, automated guided carts to replace
traditional overhead units, and the new paint shop, which uses a “three-wet” system resulting in less
chemical usage, reduced energy consumption, and less sludge in the landfills. Both Whybrew and
Fleming also credit the UAW for agreeing to a two-tier wage structure and other contract provisions that
have increased the competitiveness of U.S. facilities, which enabled the companies to invest more in
those plants.
All of the manufacturing panelists also expressed concern that the industry’s surviving lower tier
suppliers are not as streamlined and efficient as they could be, and they may not have sufficient capacity
to keep up with growing market demand. Larry Jutte, President and COO of brake assembly
manufacturer Ernie Green Industries, declared that the supplier sector is going to be “the next pinch
point for the auto industry.” Hidetoshi Imazu, Executive Vice President of Manufacturing and Supply
Chain Management for Nissan, detailed the lessons learned from Japan’s March 2011 earthquake and
tsunami—especially with regard to the company’s
suppliers. Imazu said the disaster revealed the
fragility of the automotive supply chain, and how one
disaster can “strike a blow to all manufacturers.” Guy
Morgan, Managing Director for BBK, said many
suppliers in Tier 2 and below have not upgraded
manufacturing operations, standardized production
systems, or formalized procedures as the automakers
and Tier 1 suppliers have. These smaller suppliers
often have not invested in advanced computing and
software, and are not focused on early problem
identification and solving that can eliminate waste.
Hidetoshi Imazu, Executive Vice President of Manufacturing
and Supply Chain Management for Nissan
Nissan’s Imazu said his company is now extending its
own production system to lower-tier suppliers
problem both in Japan and in North America in an effort to improve the supply base more quickly. All of
the automaker representatives on the panel acknowledged that their companies and their first tier
suppliers are going to need to build relationships with lower tier suppliers to improve the system and
achieve greater efficiency, speed, flexibility, and quality.
Tooling Up for Tomorrow’s Automobiles
This session featured a common thread of improving efficiency across several operations functions, as
well as in vehicles and engines. These changes are driven both by competitive pressure within the
automotive industry, as well as the need to make vehicles lighter and more fuel-efficient to meet
upcoming fuel economy requirements. The session was moderated by Dr. Jay Baron CAR’s President and
CEO and Greg Schroeder, a Research Analyst
in CAR’s Manufacturing Engineering and
Technology group.
Dave Coleman, Senior Engineer for Mazda’s
North American Operations described the
steps taken by the automaker to make its
new Skyactiv engines as efficient and light as
possible. In addition to being more efficient,
the engines feature more flexibility and
commonization across the lineup, making
their application in vehicles around the world
more cost-competitive.
Dave Coleman, Senior Engineer for Mazda’s North American Operations
Ford’s Director for Global Body Exterior, Safety, and SBU Engineering, Jim Morgan, discussed the
automaker’s increased utilization of hydroforming technology, which involves the use of highly
pressurized fluids to bend metal into specific shapes with great precision. Hydroforming allows Ford to
make lighter vehicles, thereby improving their fuel efficiency. Morgan also discussed Ford’s focus on
improving manufacturing operations by taking steps such as using the same tool in multiple facilities.
Many of the same sentiments were echoed by Dr.-Ing. Manfred Sindel, Quality Manager for Audi AG,
who discussed not only Audi’s efforts to make its
vehicles lighter but also the product development
processes used to achieve these goals.
Dr.-Ing. Manfred Sindel, Audi AG makes “light” of the situation
with Jim Morgan of Ford and CAR’s Dr. Jay Baron
Dow Automotive Systems’ Chief Engineer, Mansour
Mirdamadi, discussed the firm’s work on composite
materials. Composites hold the promise of
improving fuel economy due to their lighter weight
but also bring with them the challenges of cost and
new manufacturing processes. Mirdamadi
discussed the need to incorporate durability, crash
performance, and other parameters into the
application of these materials.
Connected Vehicles at the Crossroads
In this year’s Connected Vehicles session, panelists discussed connected vehicle safety applications,
autonomous driving, and in-dash social media applications. The session was moderated by Richard
Wallace, Director of CAR’s Transportation Systems Analysis
group.
Tim Johnson, National Highway Traffic Safety
Administration
Tim Johnson, Director of Crash Avoidance and Electronic
Controls Research at the National Highway Traffic Safety
Administration, discussed the fully connected
transportation system, potential “connected” solutions to
enhance traffic safety, USDOT’s Vehicle-2-Vehicle program,
and the safety pilot model deployment officially launched
in August 2012 in Ann Arbor, Michigan.
Michigan Department of Transportation (MDOT) Director Kirk Steudle provided an overview of MDOT’s
ongoing efforts related to connected vehicle technologies, and the implications of connected vehicle
and autonomous driving to transportation infrastructure management, planning and operations.
Chrysler’s Marios Zenios, Head of Connectivity and
Infotainment for the automaker, said Chrysler is introducing
its Uconnect system for the next generation of car buyers. In
order to make Uconnect successful, Chrysler will focus on four
priorities: the voice of the customer, easy-to-use controls,
“smart” cars, and fully connected vehicles. Chrysler also
emphasized safe use of telematics systems, and data privacy.
Frank Weith, the General Manager of Connected Vehicle
Services for Volkswagen Group of America presented future
Chrysler’s Marios Zenios introducing Uconnect
challenges to intelligent and efficient mobility solutions. He
discussed Volkswagen’s strategies to develop connected vehicle and autonomous driving technologies,
including using heterogeneous networks, and integrating services with advanced driver assistance
systems (ADAS).
Roger Berg, the Vice President for Wireless Technologies at DENSO International America’s North
American Research Lab, talked about his company’s role in research, development, and production of
both in-vehicle technologies and infrastructure communication equipment.
Visteon’s Global Director for Innovation, Design and Advanced Electronics, Tim Yerdon, described
megatrends of a changing society, and concluded that connectivity is not just for electronics - it’s a
lifestyle.
Kevin Link, Senior Vice President of Hughes Telematics, said the auto industry must find another way to
pay for the safety and information benefits gained from vehicle connectivity other than the current
customer-based subscription system. He suggested that auto dealers, manufacturers and regulatory
agencies which benefit from better information should underwrite the digital integration of connected
vehicles in the United States.
On an international note, James Wang, the Secretary General of the Taiwan Automotive Research
Consortium, discussed current developments in intelligent mobility in Taiwan.
Don’t Miss CAR’s Next Breakfast Briefing:
Advanced Powertrain Forum
Tuesday morning’s Advanced Powertrain Forum included presentations from several automakers-Chrysler, Ford, General Motors, Toyota, and Volkswagen along with the global powertrain engineering
services firm FEV. The panel was moderated by Brett Smith, Co-Director of CAR’s Manufacturing,
Engineering, and Technology group. Unlike previous powertrain sessions at MBS, which focused on
specific topics such as CAFE, electric vehicles, or ethanol, this year’s session focused on the powertrain
advances important to the firms, acknowledging that automakers will depend on a broader portfolio of
advanced powertrain technologies. Participants discussed a range of technologies, including advanced
internal combustion engines, alternative fuels, transmission improvements, vehicle electrification, and
hydrogen fuel cells—all of which are likely to play a role in meeting consumer expectations while
achieving federal- and state-mandated GHG and fuel economy targets.
The Advanced Powertrain Forum: Toyota’s Justin Ward, Chrysler’s Bob Lee, Volkswagen’s Oliver
Schmidt, Ford’s Joseph Bakaj, GM’s Gary Smyth, and Gary Rogers of FEV join moderator Brett Smith
(CAR) to discuss multiple powertrain technologies and manufacturing flexibility.
Strategies discussed included:
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Downsizing and turbocharging engines
Electrification
Use of alternative fuels (hydrogen, diesel, biofuels, CNG)
Flexible assembly operations
Simplifying and standardizing automaker powertrain portfolios
Making powertrain improvements other than those for engine, transmissions, and axles
Bob Lee, Vice President and Head of Engine and Electrified Propulsion Engineering at Chrysler Group,
emphasized the work that the company has done to improve transmissions and axles. The electrification
strategy is being used sparingly at Chrysler, but soon there will be Fiat 500 battery electric vehicles, as
well as plug-in hybrid electric vans and pickup trucks. Chrysler is working not only to reduce parasitic
losses on its powertrain systems, but also to reclaim energy.
Ford’s Vice President for Powertrain Engineering, Joseph Bakaj, focused on the Michigan Assembly
Plant, which produces vehicles using conventional gasoline, hybrid, plug-in hybrid, and battery electric
powertrains. Bakaj also discussed Ford’s use of EcoBoost technology, which allows it to downsize
engines while enhancing performance.
Oliver Schmidt, General Manager of the Engineering and Environmental Office at Volkswagen Group of
America, explained that his company is providing electrified vehicles in all segments and brands.
Schmidt talked about strategies to reduce engine weight, increase use of turbocharging, and unification
of powertrain positions in vehicles. He also noted that in some cases, when regulations around the
world become more stringent but also converge, increased scale can help automakers reduce
production costs.
Director of the General Motors Powertrain Systems Research Lab, Gary Smyth, presented several
strategies being employed by his company, including flex-fuel capabilities, natural gas, diesel, engine
improvements, advanced transmissions, electrification, and hydrogen fuel cells. He stated that by 2025,
GM will rely on a broad portfolio of options which will include all of those technologies.
Gary Rogers, President and CEO of FEV, Inc., opened his presentation with projections showing that oilbased fuels will be around through 2050, but that automakers must look at the most cost-effective
solutions that can meet efficiency and emissions requirements. Rogers discussed using smaller but
turbocharged engines, variable compression ratio compression technology, and mass reduction to
achieve greater vehicle efficiency. He also mentioned that more efficiency can be gained by improving
transmissions.
To close out the session, Justin Ward, Advanced Powertrain Program Manager for Advanced Technology
Vehicles at Toyota’s Technical Center, discussed strategies used to improve fuel efficiency of his
company’s hybrid vehicle, the Toyota Prius. These strategies include friction reduction, a heat
recirculation system to warm the engine, and direct injection technologies.
During the discussion, panelists emphasized that the future automotive landscape will include multiple
options for vehicle powertrain technologies and require a great deal of flexibility in manufacturing.
Much of the work in the near future will involve less capital intensive development of powertrain
improvements outside the engine. Uncertainty will be a major element affecting developments in
powertrain technology, and regulation will be an important driver, especially as global regulations
converge.
Where Have All the Sales Gone?
Panelists in the “Where Have All the Sales Gone?” session are
forecasting U.S. light vehicle sales for 2012 to be between 14.0 to
14.5 million units, which represents a 10 to 14 percent growth from
last year, and the third consecutive year with double-digit growth.
The session was moderated by CAR’s Executive Vice President of
Research and Chief Economist, Dr. Sean McAlinden.
“Auto sales are facing a near term challenge, but long term outlook
remains positive,” Ford’s Chief Economist Ellen Hughes-Cromwick
said. “We are not seeing anything in the leading indicators that
suggests we are about to embark on an acceleration of economic
activity,” she continued. The U.S. unemployment rate remains high,
Ford Chief Economist Ellen Hughesand consumer confidence indices and housing starts are still at
Cromwick
disappointingly low levels. However, due to the age of U.S. vehicles,
U.S. population growth, and a rising vehicle ownership rate, the long term automotive sales outlook
remains positive. LMC Automotive’s Senior Vice President of Forecasting Jeff Schuster said the U.S.
market will remain optimistic for the next few years, even while the European market is declining.
Schuster commented that compared
to the automakers, auto suppliers
are feeling less optimistic, which
could result in a tight situation in
automotive supply chains.
Anthony Pratt, the Director of
Forecasting for R. L. Polk, concurred
with Hughes-Cromwick and Schuster.
He added that the length of vehicle
ownership has grown from 50
months in 2004 to 71 months more
recently. Pratt said that this change
in consumer behaviors will have an
impact on both new and used vehicle
markets.
Where Have All the Sales Gone Panelists: LMC’s Jeff Schuster, Ford’s Ellen HughesCromwick, NADA’s Paul Taylor and Anthony Pratt of Polk, chat with CAR’s Executive
Vice President of Research and Chief Economist, Dr. Sean McAlinden
Paul Taylor, the Chief Economist for the National Automobile Dealers Association, provided a different
view of U.S. light vehicle market. He forecasts that the second half of 2012 will be very different from
the first half, in terms of competition and vehicle availability. He indicated vehicle pricing will become
less rigid, and sales could soar this fall. “The inventory shortages are over,” Taylor said “Everyone is
ready to sell.”
Money Matters: The New Purchasing Landscape
This session, moderated by Bernard Swiecki, Senior
Project Manager in CAR’s Sustainability and Economic
Development Strategies group, focused on the
relationships between the firms that comprise the
automotive supply chain. In addition to including the
traditional focus on interaction between automakers
and their suppliers, the session also include insight into
the relationships between automotive suppliers of
different tiers.
Toyota North American Senior Vice President of
Purchasing - Robert Young on Tier2 & 3 suppliers
Robert Young, Toyota North American Senior Vice
President of Purchasing, expressed concern that some of the smaller firms which comprise much of the
tier 2 and 3 portions of the automotive supply chain face capacity constraints as the industry continues
to recover, a theme echoed from Monday’s Global Manufacturing Strategies session. These lower-tier
firms may have difficulty accessing the funds required to meet increased product orders from their
customers, causing supply disruptions that could interfere with automakers’ production schedules and
hurt their bottom line.
These concerns were echoed by other speakers, including Gary Baugh, a Senior Director of Purchasing at
automotive supplier Dana Holding Corporation. Baugh described Dana’s approach to verifying the
capacity availability at lower tier suppliers new to Dana before awarding these firms new business. In
addition to capacity checks, Dana and other suppliers are also increasingly likely to investigate the
financial viability of lower tier suppliers before relying on them for key components or materials.
Surviving the Skills Shortage: Hiring Strategies and Solutions
The automotive industry has just over half the number of employees in 2012 than it employed just 10
years ago, according to data from the U.S. Bureau of Labor Statistics. However, the unemployment rate
in the transportation equipment sector is 1.5 percentage points lower than the national average in the
United States. Between 2006 and 2011, employment and wages both fell in the industry, which indicates
a labor surplus, yet employers report it is difficult to find and attract skilled workers. CAR’s forecast
predicts the industry will add 140,000 jobs in the next four years, and supplier jobs will make up about
80 percent of this total. Throughout the week, speakers talked about how today’s automotive engineers,
technicians, skilled trades and production workers must be adept at teamwork, multi-tasking, problem
solving, and leadership. This session, moderated by CAR’s Director of Labor and Industry group, Kristin
Dziczek, examined what employers could do to identify, recruit, and hire the talent they need.
Jim Jacobs (Macomb Community College), Dale Belman (MSU), Amy Cell (MEDC), Charlie Streeter (MSX), and Sean Vander Elzen
(GM) discuss skills shortage issues with CAR’s Director of Labor and Industry group, Kristin Dziczek
Amy Cell, Senior Vice President for Talent Enhancement at the Michigan Economic Development
Corporation, kicked off the session with an overview of the state’s strategy to connect, collaborate, and
create talent in Michigan. Cell discussed a number of state workforce initiatives including the new
mitalent.org portal, efforts to foster Science, Technology, Engineering and Mathematics (STEM)
education, and an apprenticeship pilot based on the German model of skill development that would
allow students to earn and learn.
Sean Vander Elzen, who is Senior Manager for Global Talent Acquisition at General Motors, said
outdated perceptions of working in the industry and in Detroit are both one of the biggest challenges in
recruiting, and one of the company’s greatest opportunities. Vander Elzen talked about a project GM is
doing with Scratch, an MTV company aimed at helping companies understand and market to the
“millennial” generation. The project is focused on younger people both as consumers and potential
employees, and is helping GM re-evaluate its employment “brand” and culture as it seeks to attract the
next generation of skilled automotive talent.
The automotive crisis has led employers to be more cautious about hiring, and the use of temporary and
contract workers has expanded. Charlie Streeter, Vice President of Sales and Marketing for MSX
International, presented data showing that contractors typically made up about 10 percent of the
workforce in 2009, but the percentage has grown to 26 percent in 2012. Streeter argued that this new
“blended workforce” helps companies balance workloads, saves labor costs, and increases
organizational efficiency.
Professor Dale Belman of MSU’s School of Labor and Industrial Relations argued that while there are
some niche areas where a true skills gap exists, there is little evidence to support that a broader skills
gap exists today. Instead, the problem is that employers are training less, over-searching for the perfect
candidate, and perhaps over-specifying required job qualifications, Belman said. He cited a statistic that
only 21 percent of employees received any training from their employers between 2006 and 2011.
Macomb Community College President Jim Jacobs urged employers to think of community colleges as
part of their supply chain. He argued that offering work experience to students concurrent with their
classroom studies is one way to create better engineers and workers. The panelists agreed that
partnerships with educational institutions are one way to improve recruiting efforts. Another is to focus
talent search and recruiting efforts towards labor pools where other firms might not be looking—
including women, veterans, and older workers. Companies have focused intently on changing and
streamlining the way they do business in
other areas, and the panelists suggested
that companies might need to translate
those abilities to change the way they
approach recruiting and training workers.
CAR Forecast: Michigan Automakers
and Suppliers Will Grow Nearly 8
Percent by 2016
Source: LMC Automotive; BLS; CAR
The Designing for Technology (and the Consumer) Forum
This session highlighted the technologies, design and strategies needed to create “must-have” products
for the next generation of buyers. Gen Y, Gen X’ers, millennials and the Internet generation view the
automobile differently than the Baby Boomers. Yet
the need—and desire—for personal mobility
remains strong. This Forum represented CAR’s firstever interactive MBS session featuring vehicle and
technology demonstrations to the live audience. The
session was co-moderated by Brett Smith, CoDirector of CAR’s Manufacturing, Engineering and
Technology group and Richard Wallace, Director of
CAR’s Transportation Systems Analysis group.
Klaus Busse, Head of Interior Design at Chrysler
Group LLC, said designers face a big challenge in
Chrysler’s Klaus Busse conducts a “Theater in the Round” walk
around of the all new Dodge Dart
enticing elusive Gen Y buyers to purchase cars
despite the fact they drive less than previous
generations. Part of Chrysler’s answer to this question lies in the company’s pride in being American,
and the focus on showcasing that pride in American design. Also relating to branding and design, Ralf
Meyer-Wendt of Federal-Mogul demonstrated how automakers use colors to distinguish their brands
from one another.
David Graff and Kirk Shields of Microsoft echoed the industry’s changing demographics, noting that 70%
of Gen Y members view dealerships as obstacles. To get around this challenge, Microsoft has technology
to offer a customer vehicle experience via computer, without the vehicle being present.
NVIDIA’s Taner Ozcelik, General Manager, Automotive Business Unit described the evolution consumer
electronics have taken. Gaming technology fueled much of the current computing design technologies in
vehicles, and in his opinion, cars are the new consumer electronics. He and a colleague demonstrated
these design technologies by showing graphical screen enhancements NVIDIA made to a Ford Explorer.
Clearly, consumer electronics are seen as one way to entice younger generations to purchase vehicles,
and as John Waraniak, the Specialty Equipment Market Association Vice President of Technology said,
“People don’t buy products – they buy what products do for them.” Companies that create products and
business models to effectively meet these challenges will be ideally positioned for success.
What Do We Benchmark Now?
The basis for this session was the increasing normalization of several bellwether industry benchmarks.
The famous J.D. Power Initial Quality Survey (IQS), for example, has seen its results approach near
statistical insignificance for the majority of the automakers covered. Likewise, Planning Perspectives’
Working Relationship Index (WRI), which measures the quality of relationships between select
automakers and their suppliers, saw the range between best and worst-performing companies decrease
to 50 in 2012, down from over 300 just a few years ago. Similar trends have been observed in other
automotive industry benchmarks, making it necessary to seek new differentiators to identify how
consumers view and choose vehicles, and how efficient the automotive industry has become in its
operations. The session was moderated by Bernard Swiecki of CAR.
David Champion, Senior Director of Automotive Testing at Consumer Reports, discussed the
publication’s procedures for testing and rating vehicles, as well as for
surveying owners on the problems they’ve experienced. Champion
highlighted the overall improvement in vehicle interior quality on the part
of the Detroit Three, which has also been accompanied by declines at
several international automakers. Champion also talked about the negative
impact on the user experience that has resulted from poorly executed invehicle communication and entertainment systems.
David Champion, Senior
Director of Automotive
Testing at Consumer Reports
Tom Libby, an Automotive Industry Analyst at R.L. Polk, suggested the
vehicle buying experience may become the next benchmark consumers will
use to choose vehicles now that vehicle quality has more or less equalized among a majority of the
mainstream brands, and several of the panelists agreed. Jim Hall, Managing Director of 2953 Analytics,
added that the automotive industry has had a tendency to read too much into survey data, and to use
benchmarks for purposes of analyzing trends they were not designed to measure.
Michelle Hill, Vice President of Oliver Wyman, presented the results of a survey of automaker and
supplier executives done specifically for this session at CAR’s MBS. The survey’s main finding was that
product development would be the area of industry operations to see the greatest benchmarking focus
in the near future.
For More Information: The complete agenda, speakers list, and selected presentations are available at
www.cargroup.org Click on “CAR Management Briefing Seminars” in the Events section