The Auto Sun is Rising David E. Cole Emeritus Chairman Center for Automotive Research (CAR) Monahan Endowment Lecture Wayne State University, College of Engineering March 23, 2011 - PowerPoint PPT Presentation

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The Auto Sun is Rising David E. Cole Emeritus Chairman Center for Automotive Research (CAR) Monahan Endowment Lecture Wayne State University, College of Engineering March 23, 2011

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Title: The Auto Sun is Rising David E. Cole Emeritus Chairman Center for Automotive Research (CAR) Monahan Endowment Lecture Wayne State University, College of Engineering March 23, 2011


1
The Auto Sun is RisingDavid E. ColeEmeritus
ChairmanCenter for Automotive Research
(CAR)Monahan Endowment LectureWayne State
University,College of EngineeringMarch 23,
2011
2
David is to be returned to Italy   A bit of
cultural news for a welcome change!
3
His Proud Sponsors were Fast Food Chains
4
  • Auto Problem
  • Mostly Revenue
  • with Depression Level of Sales

5
  • GM Chrysler Debt Reduction, Lean
  • Ford Good Bad News,
  • No Bankruptcy but High Debt
  • All Manufacturers Suppliers
  • Have Been Hurt
  • But, The Sun is Rising Fast

6
  • Across the Land Still
  • Amazing Level of Ignorance on Auto Industry

7
The Perfect Storm
Competent New Players
China, India,
Benefits
Auto Industry
Hyper Competition
Tools
8
Auto Industry of the Future
  • A World of
  • Vanishing Boundaries

9
Economic Contribution of the U.S. Automotive
Industry
10
Auto Manufacturing
  • Manufacturers . . . . 313,000 jobs
  • Parts Suppliers . . . . 686,000 jobs
  • R D Spending . . . 16 billion
  • Source BLS, NSF includes NAICS 3361, 3362

11
Economic Contribution Per Job
Auto Mfr. 329,000
Average Job 112,000
Source U.S. Census Bureau Annual Survey
Manufacturers 2005
12
Economic Multiplier
  • Auto Manufacturers 10
  • Auto Parts Supplier 5.7

13
Auto Employment
  • 2010 modest gains
  • 2011 2013 100,000 per Year

14
  • We Have Been Swimming a River
  • That is Getting
  • Faster, Deeper, Wider
  • But!

15
The Pot of Gold on the Other Side is Getting
Larger
  • Labor Cost Reduction
  • Household Growth
  • Pent-Up Demand
  • Capacity Reduction
  • Scrappage
  • Return of Pricing Power

16
  • The Challenge
  • Getting to the Other Side
  • But We Have Reached the Shallow Water

17
  • Domestics Unbelievable Shift from about
  • 2,000 Disadvantage
  • to
  • 2,000 Advantage

18
However, Will It Come Back . . ?U.S. Light
Vehicle Sales Forecast
2.4 M
-8.0 M
-9.3 M
-5.2 M
Source CSM Worldwide, J.D. Power
19
U.S. Light Vehicle Sales History and
ForecastCombined J.D. Power and CSM Worldwide
Forecast2007 - 2014
Millions
Source CSM Worldwide, JD Power, Inc.
20
  • The New Break-even-
  • 10-11 Million Sales

21
  • Beware The Aging of the Boomers.

22
Demographics
Boomers go Boom
  • Consumer Behavior
  • Socio / Political
  • Health Care
  • Skilled Workers
  • World Issue

23
Auto Industry - Thousands of New Jobs But
Only for the Educated
24
This is Auto Building Americas Tomorrow
25
The Business Model is Changing Fast.
26
Old Business Model
Vertical Integration
Talk
Bureaucracy
Paper
Linear
Slow
Lean
Legalistic
Control
Physical Prototypes
Individual
Sequential
Regional
Job for Life
Kings
Competition
Structured
Acquisitions
27
New Business Model
Listen
Virtual Integration
Collaboration
Anti-bureaucracy
Paperless
Lean Agile
Fast
Trust
Empowerment
Virtual Prototypes
Team
e-enabled
Parallel
People Flow
Coaches
Global
Coopetition
Flexible
Alliances
28

Its the Team, the Team, the Team
29
Global Integration-
One Company World-wide
  • Platforms
  • Components
  • R D
  • Plants
  • Everything

30
Value of Global Economies of Scale are Huge
31
Lean / Agile
  • Investment
  • Engineering
  • Manufacturing
  • Everything

32
Knowledge
  • The Competitive Edge

33
Cars and Trucks
Customer Pull
Technology Push
Product and Process
34
Knowledge
Competitive Advantage
Innovation
KnowledgeApplication
Time
35
Do What You Know
36
Coming SoonAuto Harvest
37
Auto Technology
  • At the edge of a revolution?

38

Future Cars
39
Future Power Plants
  • Gasoline
  • Diesel
  • Hybrid
  • Fuel Cell

The Answer ?
40
Technological ProgressWhen to Commercialize
Too early

A
Current Technology
B
Time
41
POWER TECHNOLOGY COMPARISON CHART
TECHNOLOGY OPTIONS / COMPARISON PARAMETERS ADVANCED GASOLINE CLEAN DIESEL HYBRID PARALLEL NON-GRID
Cost 1,000 3,000 4,000 to 6,000
Fuel Economy 20 30 20 to 30 (with diesel 50)
Non-CO2 Emissions Baseline Nox and Particulate Problem -20 to -30
42
BOTTOM LINE
  • Not enough knowledge to pick winners and losers
  • Different strategies for different companies
  • Alliances necessary to overcome challenges
  • Government incentives requiredultimately
    consumers decide

43
Coming Fast Plug-in, Series HybridsorExtended
RangeElectric Vehicles
44
Future Fuels
  • Petroleum
  • Bio
  • Hydrogen
  • NH3

The Answer ?
45
  • Future Gasoline Price
  • 1.50 5.00 /gallon

46

Annual Mileage 15,000
Annual Fuel Cost
MPG
47
Old Carbon Fuels Will Continueto be Used if they
are Economic
48
Improved Efficiency and New Carbon Fuels Can
Slow Growth of Old CO2 and Keep Expensive Old
Carbon Fuels From Being Extracted.
49
2 Key Developments
  • Lithium Batteries
  • Cellulosic Bio Fuels

50
  • The Invention
  • is Here!

51
Cellulosic Bio Fuels
  • Lower Heating Value
  • 2010 - 2015 - 1.00/gal?
  • Cost Increase for E-85 Vehicle - 100
  • Global Impact
  • Development not Invention

52
Lithium Batteries
  • 4 x Performance Lead Acid
  • Many Chemistries
  • Heat a Problem
  • Key to Plug-in Hybrids
  • Development not Invention
  • Cost?

53

Energy BTU/ft³
54
Challenge for Batteries
Life
Discharge Level
55
Battery Economics
  • Manufacturing
  • Materials

56


TIME
57
  • Life After the Car
  • The Grid!

58
Developments to Watch
  • Vehicle/Infrastructure Integration
  • Auto/Utility Integration

59
Climate Change DivisiveConservation -
Collaborative
60
Future Direction
  • Its All a Matter of Economics

61
Success Factors
  • Risk
  • Obsolete Own Products
  • Tough Problems
  • Systems
  • Knowledge
  • Collaboration


62
World Classis a Moving Target
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