Special Coverage

Chicago Auto Show

CHICAGO – If the president of the United States can admit he “screwed up” on some cabinet appointments, the auto industry “shouldn’t be bashful in acknowledging that we have been far from perfect in our actions.”

So says Hyundai Motor America President and CEO John Krafcik, proposing a manifesto of ideas during a keynote speech entitled “Preparing for a Revolution” delivered to a media gathering at this city’s annual auto show.

He calls on the industry to embrace fuel economy and vehicle safety, limit executive pay, end cost skimping and “own up to our shortcomings.”

While no other industry has had a greater impact than automotive on the health of the U.S. economy, “there is no other business with a bigger perception problem,” he says.

“Let’s face it, our reputation as an industry is horrible. In the U.S., we are viewed for the most part as a slow, dim-witted industry that is typically unresponsive to consumer and environmental needs.”

That “immense image problem” extends to car dealers, too, “thanks in great part to manufacturer programs that put more focus on moving the iron than on consistently delighting our customers,” he says.

Krafcik calls on the industry to use revolutionary thinking to end the criticism and enter a new era.

“First and foremost, we need to build the highest-quality vehicles possible, and in doing so, prove that we listen to our customers and respond to their needs,” he says. “Our cars should be gorgeous. They need to be rewarding to drive.”

Auto makers are wrong-headed to put cost over quality.

“Skimping on quality to hit a cost target is a mistake,” Krafcik says. “Any car company can hit a cost target and deliver a terrible vehicle. There is no skill in doing that.

“We’d all be better off as an industry if every manufacturer missed every cost target on every new-vehicle launch by $100. We’d all get that money back through customer satisfaction, loyalty and goodwill.”

Krafcik calls on the industry to “embrace improved fuel economy as an indisputable social good.” Auto makers should step up and get ahead of regulators.

He proposes self-imposed restraint on executive pay, “a touchy subject for some, but another opportunity for the auto world to be revolutionary in thought and deed.

“What if our industry was the first to exercise a more inclusive form of capitalism that voluntarily restrained executive compensation to a reasonable multiple of average employee salary?”

The “ultimate lesson” for the industry to learn is “how to stand on our own two feet,” Krafcik says. “We cannot count on elected officials and policy makers to determine what is best for our industry, nor do any of us want them to. We need to find solutions on our own.”

He foresees the industry as leading government regulators on matters of safety, fuel economy and the environment.

He praises Volvo Car Corp. for its safety efforts, particularly its goal to achieve zero occupant fatalities by 2020. “Imagine the public benefit, not to mention the goodwill that we could generate if we made this an industry-wide goal,” he says.

Skeptics in the Chicago audience question how Krafcik’s proposals could become realities.

A “first step” is for trade organizations and associations to do more and act in concert, he says. “We need to work more consistently as an industry to change those negative perceptions.”

Adds Krafcik: “I can’t wait to see how our revolutionary thinking will manifest itself and how we will reestablish our industry as the crown jewel of the global economy.”

sfinlay@wardsauto.com