The automotive industry needs to quickly develop a new roadmap and press harder
for innovation to connect the industry's great past with the needs of
tomorrow, two Ford Motor Company executives told industry leaders at this
weekend's "Global Leadership Conference at The Greenbrier."
Mark Fields, Ford executive vice president and president of the Americas,
and Anne Stevens, newly appointed Ford executive vice president and chief
operating officer of the Americas, made the comments as part of keynote
addresses at the Society of Automotive Engineers' prestigious industry
conference, attended annually by automakers, suppliers and business leaders.
"The auto industry events of the past week prove that the roadmaps our
companies followed for 100 years are no longer valid," Fields said. "Business
models have changed. Consumers and markets have changed. We have to change,
too. From now on, only those automakers and supplier companies that find new
ways to work together -- and strike down some new, uncharted paths -- are
going to survive."
Fields said the auto industry faces seven specific and serious challenges:
* Globalization is bringing more competition to the U.S.
* The "balance of power" in the industry has shifted with China and India
emerging as top markets
* Market dynamics are changing, causing intense competition in every part
of the market
* Customers are becoming even more demanding
* Customers' views of their automobiles are changing faster than ever,
with cars increasingly becoming an expression of who people are rather
than mere transportation
* Legislative pressure is increasing
* Oil production is peaking, and concern for the environment is growing.
"We must grapple with all seven of these challenges," Fields said. "Guts,
grit and new ideas will be the key to winning in the automotive game today."
At Ford, Fields says, the team is using the best lessons from around the
world to develop the roadmap and innovation for the future. Personally,
Fields says, he is bringing the lessons he learned from 10 years outside the
United States -- at Mazda in Japan and in Europe running the Premier
Automotive Group and Ford of Europe -- to his new role leading Ford's American
operations.
"The task is to fix the business and then seek competitive advantage
through innovation," Fields said. "All actions in North America are going to
be fast, focused and fundamental. We will jettison excess bureaucratic
baggage. We will break constraints. And we will make firm decisions.
"We are poised to win because we have a group of leaders who will not
tolerate failure," Fields continues. "It's going to be uncomfortable but
exhilarating at Ford Motor Company in the months ahead."
Newly appointed as Ford's chief operating officer in the Americas, Stevens
outlined the critical role of innovation in moving the auto industry forward.
With its expansive scientific and technical knowledge, the auto industry has
the opportunity to be the first generation to actually give back to the
planet, she explains. Ford's Escape Hybrid and Mariner Hybrid, along with the
lean, green and flexible Ford Rouge Plant, are examples of the confident first
steps Ford has taken toward this goal.
"Innovation is at the heart of American progress, and it is right up there
with 'individual rights' and 'liberty' as attitudes that literally put this
country on the map," Stevens said.
Additional steps need to be taken by all automakers in areas such as
alternative fuels, biodiesel, fuel cells and hydrogen powered vehicles, she
said. The industry can accomplish the goals in a timely and orderly fashion
by using "good old American innovation."
But getting innovations off the ground requires engineers to breathe new
life into new ideas. Stevens expressed concern that, with the declining
number of students studying science and engineering, the future of the U.S.
auto industry runs the risk of being completely dependent on engineering
knowledge residing abroad. The building blocks of the auto industry are
eroding at a time when such nations as China are gathering strength, she said,
pointing to the fact that:
* Fewer students are studying science and engineering. Enrollment in
first-year engineering programs is down more than 5 percent since 2002.
* Electrical engineering is starting to decline, as well. Computer science
is even more alarming -- with enrollment for first-year students off 31
percent from 2001.
* China is graduating five times the number of engineers this year as in
the U.S. -- and graduating an equal number of PhDs.
* In the U.S., foreign nationals earned more than 50 percent of master's
degrees in engineering and 63 percent of PhDs.
* Less than 20 percent of graduate engineering students in the U.S. are
women, and only 10 percent of the engineering workforce is female. This
makes it the most segregated of all professions in the U.S. today.
"This does not bode well for the manufacturing base in the United States
-- and that means us," Stevens said. "If America is to maintain its
manufacturing know-how, we must fill that engineering pipeline. We cannot
afford to be slow to market because of an insufficient engineering base at
home.
"We at Ford urge the entire auto industry to join together encourage our
young people to pursue the studies that will prepare them to become our future
colleagues. We need these engineers of the future if we intend to continue
the spirit of American innovation that created our industry itself."