TRAVERSE CITY, MI – “Last year, we felt like we were going to die,” says Dave Cole, chairman of the Center for Automotive Research (CAR), sponsor of the Management Briefing Seminars staged each year in this northern Michigan city.
“But this year,” he tells Ward’s, “everyone is feeling good. It’s a totally different view. My message is the industry is back.”
Adds Cole, who founded MBS 42 years ago: “I think ’09 was our low point. Now the industry is gearing up for recovery, and we’re saying we’re going to live, and so what do we have to do for success?”
Apparently others agree. While last year’s MBS turnout sank to just 600 attendees, preliminary estimates here indicate a jump to 800. Exhibitors will be about the same, or roughly 15 to 20 companies and organizations, CAR estimates, but the number of sponsors for MBS events is higher than a year ago.
MBS traditionally attracts auto maker and supplier representatives from around the world, due in part to the lineup of heavy-hitters on the agenda.
This year’s headliners include:
- Co. CEO Ed Whitacre
- Mark Fields, president of Motor Co.-Americas
- Bob King, newly elected president of the United Auto Workers union
- John Krafcik, president of Motors America
- Jim O’Donnell, president of BMW North America
- Tim Manganello, CEO of BorgWarner Corp.
- Steve St. Angelo, executive vice president of Toyota Motor and Manufacturing of North America, who also recently was named chief quality officer.
Although MBS historically has honed in on global issues and attracted speakers from the U.S. and abroad, this year’s buzz clearly centers on domestic auto makers in the aftermath of GM’s and’s 2009 bankruptcies and ’s swiftly moving revival.
“The domestics’ position is better than I can remember,” Cole says. “If (auto makers) can make a profit in a 10 million unit (sales year), just think how profitable they’ll be when sales get back to a more normal and higher level (16 million).”
Each of the Detroit Three is profitable so far this year. U.S. sales reached 10.4 million in 2009 and are rebounding slightly this year. Ward’s forecasts a sizeable boost to 13.4 million in 2011, with steady growth to 15 million vehicles in 2015.
While foreign-based auto makers have held a $2,000 cost advantage, compared with the Detroit Three, for about 20 years, Cole says the tables now are reversed with the domestics enjoying a $2,000 advantage. He estimates GM, for example, has taken out $5,000 to $6,000 of costs per car while simultaneously adding more content and features to improve their competitiveness.
“Survival is no longer a question, although there’s still work to do,” says Cole. “But most of the huge (domestic) legacy costs (primarily health care) are now history, and GM andhave offloaded their debt.” All three “have drastically reduced their structural costs.”
MBS kicks off today with a program focusing on manufacturing, starting with a session entitled “Strategic Manufacturing: A Merger if Product and Process,” followed by an afternoon session devoted to “Deploying Connected Vehicles: Advancing Safety and Creating New Markets.”
Tuesday will be devoted to the 10th annual Advanced Powertrain Forum, and includes sessions covering China, the financial environment and electric vehicles.
Wednesday and Thursday programs feature speakers discussing industry restructuring following two years of major upheaval. GM’s Whitacre will be the final speaker on Thursday morning.
– David C. Smith