Crain: Detroit Three can overcome major tech, biz challenges
date: December 13, 2007
SOURCE: Great Lakes IT Report
By: Matt Roush
A longtime chronicler of the American automotive industry's
story had stern words for the domestic auto industry during the announcement of
the finalists for the North American Car and Truck of the Year awards
Wednesday.
But Crain Communications Inc. chairman Keith E. Crain also
had words of hope in his speech before the announcement at a meeting of the
Detroit Economic Club at Cobo
Center.
It terms of the awards, it was a major coup for the
resurgent General Motors Corp., which took four of the six nominations.
Its Cadillac CTS and Chevrolet Malibu were nominated for Car
of the Year, along with the new Honda Accord. And its Buick Enclave and
Chevrolet Tahoe Hybrid were nominated for Truck of the Year, along with the Mazda
CX-9.
The Cadillac and Buick are built in Michigan, and the Cadillac features a number
of high-tech touches, including a TiVo-style audio recorder.
An international group of 46 automotive journalists made the
picks from a field of 54 all new or "substantially changed" models.
The winners will be announced Jan. 13 at the North American International Auto
Show.
Crain, meanwhile, opened his speech by warning Michigan that cities such as Chicago
and Los Angeles are trying to wrest North
America's most important auto show away from Detroit.
"We in southeast Michigan have been wrestling for years
with the fact that every year Cobo Hall gets smaller and smaller relative to
competitive exhibition halls, and today it is way past time we face up to
competitive reality as our manufacturers have," he said. "It's time
to expand Cobo into the world class hall it can be. We need more space, we need
more loading docks, and we need them now. It is also time we get a UAW-type
labor agreement at Cobo so we don't chase exhibitors away with our labor rates.
If we don't, we all know how the story is going to end, and it's not going to
be pretty."
Pointing to studies that indicate the Auto Show pumps $500
million into the local economy, Crain said that if Detroit loses NAIAS,
"we'd never come close to replacing it and we'd never forgive
ourselves."
Crain said that the auto industry today faces unprecedented
challenges, with GM's market share half what it was when he took over as
publisher of Automotive News in the 1970s. Soon, cars and trucks will be
exported to the United States
from India and China, possibly by way of Mexico.
And meanwhile, he said, vehicles are better than ever, and
"Detroit
has to build products that are dramatically better" just to maintain
market share. The industry has weathered tough times before, Crain said,
pointing to the early 1980s, when Ford "cut just as dramatically and
painfully" as it is cutting now. Then, Crain said, they had a hit car, the
Taurus, and "became a money machine for 15 years. That can happen
again."
Crain also called the Detroit Three's new labor deals with
the United Auto Workers "historic." The wages and benefits of new
hires will be cut by two-thirds, and health spending will be slashed, saving Detroit $1,000 a vehicle
and making domestic automakers much more competitive. Crain said union
president Ron "Gettelfinger and the UAW made a realistic assessment of the
competitive battlefield and concluded that the marketplace would win whether
the UAW was there or not."
Crain said all three Detroit
automakers are competing successfully in regions as disparate as South America, Australia
and Europe.
"Don't count our Big Three out for a minute," he
said. "It's a different game... but it's a game they are learning to play
in America
and around the world."
Crain also said the industry has "always been a hotbed
of technological changes" and will soon be forced to pick up the pace to
meet more stringent fuel economy standards.
"Fuel efficiency requirements are about to go way
up," he said. "There is an imperative. Cars have to get safer, more
efficient, more comfortable, more fun, and even, yeah, now more
connected." Crain also predicted more electric cars. "And 50 years
from today Detroit
will be making them, selling them and servicing them," he said.