The State of Our Industry continued...

ANDY JEFFERS
2009 SAE Detroit Section Chairman

Let me start this addition of the Chairman’s Corner by thanking our blue ribbon panel from the February "State of the Industry" Section Meeting. Peter Brown, David Cole, Neil DeKoker, John McElroy and Tom Ryan, thank you very much for taking time to participate in our Section Meeting. We would also like to thank Rick Gerth, from CAR, for initiating this meeting. Rick suggested the topic at our Governing Board meeting in December. His work with CAR and the Section Staff allowed us to pull together on outstanding program in a very short period of time.

Speaking for those in attendance, this was a rare opportunity to hear a more complete accounting of the automotive industry. So often we are required to piece together the bits of information and opinion from a variety of news sources, in order to form our own opinions. Not on the 17th. Our Blue Ribbon Panel provided depth and insight we desire. In addition, they signed on to field a wide array of questions. It takes a brave panel to sign up to field questions from a few hundred engineers rather than a few industry reporters.

A few common themes continue to emanate. First, the industry is undergoing unprecedented business and technological changes. The industry technology was in an evolutionary change mode during the last fifteen to twenty years. The last revolutionary changes were initiated by the Oil Crisis of the 1970’s. The current financial, environmental, government, and technological interaction will compel the industry back to a revolutionary mode.

Second, the automotive industry is “global”. However, many of the players still need to determine their definition of “global”. This final definition of “global” will determine OEM and supplier short and long-term viability. Past business models allowed companies to survive through global business. Downturns in one region were offset through gains in a different region. The latest industry reports indicate slight sales increases in Latin America and the Middle East. However, these minor increases do not come close to the sales drop in North America and Europe. Several years are required to drive the current sales and profit levels back to the levels of 2006.

Third, despite the views of a few legislators and media pundits, Detroit remains the technology center for the automotive industry. I am not sure if our 2007 Section Chairman Kevin Webber coined this analogy, but I will attribute it to him anyway: if the global auto industry is a wheel, then Detroit is the hub that drives the wheel.

Neil Jenkins attested to this fact during his presentation of the Gibbs Aquada at our December Section Meeting. Neil stated the reasons for locating an office in the Detroit area include the availability of talented engineers and the automotive supply base.

Neil’s reasoning is echoed by the growing Detroit defense industry. Companies like BAE Systems, and General Dynamics made the decision to grow their Detroit area operations for the very same reasons as Gibbs: talented engineers and an extensive supply base. Programs like the Joint Light Tactical Vehicle (JLTV) and the Mine Resistant Ambush Protected (MRAP) vehicle programs need the automotive engineering talent that resides in Southeast Michigan.

The Detroit Automotive Hub continues to drive an ever expanding category of automotive products.

Now for the next question. How does SAE continue as an integral component of the Detroit Automotive Hub?

SAE Detroit Section will continue to provide products and services that our members and community expect and need. It is our goal to address the following areas: peer to peer and peer to customer relationships; access to the latest automotive technology; and community support.

Our Section Meetings address the first two areas. To start, during the next three months the Section Meetings include vehicle launches for Toyota, Honda and Ford. Toyota will present the Ann Arbor Toyota Technical Center designed Venza at the March meeting. The Honda Insight helps launch the SAE 2009 World Congress in April. Congress is another prime opportunity to address relationships and technology. These meetings provide a forum to learn and discuss with our peers the technology built into these vehicles.

Though we start the year with three vehicle launch meetings, our local OEM’s do not have as many vehicle launches planned for 2009. In response, we will offer more technical meetings, tours, and small group activities than in the past. In addition to the February “State of the Industry” Section Meeting, we are organizing another topical meeting in the fall, and looking into a military meeting for the final meeting of 2009. Along with the new programs, we will continue to offer the Section Networking Nights, Golf Outing and Young Automotive Professionals Conference (YAPC).

With respect to community, the SAE Detroit Section maintains a commitment to our community. Though we are all uneasy about the state of the industry, our members still find the time to volunteer to provide several thousand local students the AWIM program. In addition, our Section provides volunteers, guidance, materials, and donations to the local Collegiate Design teams. Finally, our Section continues our commitment to provide scholarships to local engineering students.

In conclusion, it is the SAE Detroit Section's purpose to support the preservation of Detroit as the Hub of the Automotive Industry. I look forward to participating with our membership in this endeavor. Finally, we welcome your feedback and suggestions as we implement the Section changes and improvements throughout the year.

Thanks,
Andy

Andy Jeffers, 2009 SAE Detroit Section Chairman