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Monday May 4, 2009

The Future of the Auto Industry

GLOBE-Net (May 5, 2009) - The daily onslaught of depressing news about the North American auto industry could lead some to adopt a fatalistic attitude that the future is unfolding as it should. But there is far too much at stake - both in political and economic terms - for such a simple bromide. In fact, there is a positive side to the issue, one we must not lose sight of.  

Nothing can stop an idea whose time has come, and for the auto sector the perfect storm of rising fuel prices, new technologies and changing consumer demand has altered all the factors shaping the future of the industry. 

The collapse of the credit market that began on Wall Street triggered the current sequence of events that brought the North American auto industry hat-in-hand to Washington for bailout assistance. But the underlying dynamics of the market threatening Detroit’s supremacy had been unfolding for over a decade around and within the sector. 

That’s not news; it’s a reality that we have known about for sometime. At the world’s first summit on the future of the auto industry (AutoFutureTech 2008) held in conjunction with GLOBE 2008, auto sector business leaders from around the world confirmed that virtually every dimension of the industry was undergoing irreversible change. 

New technologies for the design and production of automobiles; new fuel options; the integration of information and transportation technologies - the ’smart car’; competition from more efficient lower cost vehicle suppliers in Asia and Europe; and rapidly expanding consumer markets in the developing world have combined to create a tsunami that no amount of stimulus spending could forestall. 

U.S. President Barack Obama is well aware of this, and despite the fact that the Detroit-based automobile sector has been synonymous with the American way of life for decades, he knows that change is both inevitable and necessary. That is why his administration is playing hardball with U.S. auto industry executives who were asleep at the switch for far too long. 

But the dilemma of the industry in North America has within it the seeds of opportunity for a more sustainable automobile sector, one that can lead to new jobs, new markets and more environmentally transportation benign options. In effect, from the ashes of the old auto sector could emerge a new more vibrant and geographically dispersed industry, one that could meet the inevitable demand of a growing urban population for more fuel efficient, smarter and environmentally friendly automobiles.  

I use the word "could" purposely, because the future does not unfold by chance. To create the sustainable auto sector of the future corporate and political leadership and clarity of vision are required. To use another popular truism the best way to get the future we want is to create it.  

The future of the auto industry is what we choose to make it. We have the tools we will need to create a more sustainable industry - the skilled workforce, the new technologies, and consumer demand. The strategies that are unfolding both in Washington and Ottawa must work to that end, not simply to preserve what is fast becoming a thing of the past.  

At GLOBE 2010 once again industry leaders from around the world will gather in Vancouver to discuss the future of the automobile sector. It is my hope that by then the current mood of despair will have changed to one of determined action-oriented optimism. 

John D. Wiebe

President and CEO