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The Auto Future: Fast and Furious

David E. ColeChairman Emeritus

Center for Automotive Research (CAR)Chairman AutoHarvest

Good Morning LivingstonHowell, Michigan

February 11,2014

David is to be returned to Italy A bit of cultural news for a welcome change!

His Proud Sponsors were Fast Food Chains…

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4

Auto

“We Had a Problem”

Mostly Revenue –

with Depression Level of Sales

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PALE Meeting-March 19, 2009

5

However, Will It Come Back . . ?U.S. Light Vehicle Sales Forecast

Source: CSM Worldwide, J.D. Power

+4.4 M+6.8 M

+8.9 M+2.4 M

-9.3 M -5.2 M

-8.0 M

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PALE Meeting-March 19, 2009

6

U.S. Light Vehicle Sales History and ForecastCombined J.D. Power and CSM Worldwide Forecast

2007 - 2014

16.1

13.2

10.0

11.6

15.1

16.516.1

14.1

9

10

11

12

13

14

15

16

17

2007 2008 2009 2010 2011 2012 2013 2014

Source: CSM Worldwide, JD Power, Inc.

Mil

lio

ns

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7

Pillars of Economy

Mining

Agriculture

Manufacturing

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8

Manufacturing–

An Amazing Level of Ignorance

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Manufacturing Choke Points?

Staff Tooling Suppliers Equipment Natural Events Materials

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10

Auto Industry of the Future

A World of

Vanishing Boundaries

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11

Beware: The Aging of the Boomers.

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12

Demographics

Consumer Behavior

Socio / Political

Health Care

Skilled Workers

World Issue

“Boomers go Boom”

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13

Auto Industry -

Thousands of New Jobs – But Only

for the Educated

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Tough Challenges Ahead:

14

K-12 Pipeline

Young Women

No Universal Message

Inadequate Resources

Poor History

Dated Picture of Manufacturing

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Give Scale to Great Educational Programs

Create a Message of Importance, Opportunity and Need

15

“Building America’s

Tomorrow”

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16

Success Requires Improvements in:

Cost

Revenue

Agility

Innovation

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17

Industry, Highly Unstable —

Not in Final Form

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18

The Old Business Model

is Broken

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19

Market Share is Nice

Profits are Essential

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20

BureaucracyPaper Linear

Slow Lean

IndividualSequential

Regional

Physical Prototypes

Job for LifeKings

Talk

Competition StructuredAcquisitions

Vertical Integration

Legalistic

Old Business Model

Control

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21

Anti-bureaucracyPaperless Collaboration

Fast Lean Agile

Teame-enabled

Global

Virtual Prototypes

People Flow Coaches

Listen

Coopetition

Parallel

FlexibleAlliances

Virtual Integration

Trust

New Business Model

Empowerment

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22

Time

Present Business Model

New BusinessModel

Real

Desired

Performance

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23

Leadership:

Responsibility - Authority

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24

Leadership:

Coach Team Vision Self Confidence Focus Systems Thinking More Than the Job Communication

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25

Key Questions for Leaders:

What Do I Have To Do That I’m Doing?

What Am I Doing That I Don’t Have To Do?

What Am I Not Doing That I Should Be Doing?

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26

Knowledge

The Competitive Edge

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27

It’s nice to be smart and rich,

but smart is more

important than rich.

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28

Do what you know.

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29

Customer Pull

Cars and Trucks

Productand

Process

Technology Push

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30

Time

KnowledgeApplication

Knowledge

Competitive Advantage

Innovation

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31

Innovation:

Innovative People and Companies Win

It Takes a Team

Leadership is Critical

Look Across Traditional Boundaries

Sometimes It is Better to Ask Forgiveness than Permission

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32

Coming Soon:

“Auto Harvest”

Check it out at autoharvest.org

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33

Big Data is Here

The Challenge: Use is

Intelligently

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34

STEM is Moving to

STEAM

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35

T I M E

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36

Fast-paced change demands

leverage of all resources

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37

Communication

Collaboration

Cooperation

Alliances

Teamwork

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38

Product Technology

At the edge of a revolution?

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39

Future Auto Power Plants Gasoline

Diesel

Hybrid

Fuel Cell

Electric

?

The Answer – ?

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40

Future Fuels

Petroleum

Bio

Hydrogen

NH3

The Answer – ?

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41

Future Gasoline Price –

$ 1.50 – $ 5.00 /gallon

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42

10 20 30 40 50 60 70 $-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$2,250

$1,125 $750

$563 $450 $375 $321

$4,500

$2,250

$1,500 $1,125

$900 $750 $643

$7,500

$3,750

$2,500

$1,875 $1,500

$1,250 $1,071

$1.50/gal$3.00/gal$5.00/gal

Annual Mileage 15,000

MPG

An

nu

al F

uel

Co

st

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43

Breakthrough Areas

Advanced Batteries

Cellulosic Bio-Fuels

Connected Vehicles

Advanced Material Systems

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44

The Invention

is Here!

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45

Future Direction

It’s All a Matter of Economics