Ford Exec: Oil Production is Peaking
16 October 2005
In a keynote address to the Society of Automotive Engineers’ “Global Leadership Conference at The Greenbrier,” Mark Fields, Ford executive vice president and president of the Americas, noted that the auto industry faces seven specific and serious challenges, one of them being that oil production is peaking.
The SAE Greenbrier conference, first held in 1950, is an annual event attended by automakers, suppliers and business leaders.
The auto industry events of the past week [e.g., Delphi’s bankruptcy] prove that the roadmaps our companies followed for 100 years are no longer valid. Business models have changed. Consumers and markets have changed. We have to change, too. From now on, only those automakers and supplier companies that find new ways to work together—and strike down some new, uncharted paths—are going to survive.—Mark Fields
Fields said the auto industry faces seven specific and serious challenges:
Globalization is bringing more competition to the US.
The balance of power in the industry has shifted with China and India emerging as top markets.
Market dynamics are changing, causing intense competition in every part of the market.
Customers are becoming even more demanding.
Customers’ views of their automobiles are changing faster than ever, with cars increasingly becoming an expression of who people are rather than mere transportation
Legislative pressure is increasing
Oil production is peaking, and concern for the environment is growing.
We must grapple with all seven of these challenges. Guts, grit and new ideas will be the key to winning in the automotive game today.
In a separate speech at Greenbrier, Anne Stevens, Ford’s newly-appointed executive vice president and chief operating officer of the Americas, stressed the critical role of innovation in moving the auto industry forward.
Noting Ford’s development of the Escape and Mariner Hybrids, as well as the environmental manufacturing advances at the Rouge plant, she said that more needs to be done by all automakers in all areas such as alternative fuels, biodiesel, fuel cells and hydrogen powered vehicles.
She voiced concern to the audience, however, that with the declining number of students studying science and engineering, the future of the US auto industry runs the risk of being completely dependent on engineering knowledge residing abroad.
The building blocks of the auto industry are eroding at a time when such nations as China are gathering strength, she said, noting that:
Fewer students are studying science and engineering. Enrollment in first-year engineering programs is down more than 5 percent since 2002.
Electrical engineering is starting to decline, as well. Computer science is even more alarming—with enrollment for first-year students off 31 percent from 2001.
China is graduating five times the number of engineers this year as in the US—and graduating an equal number of PhDs.
In the US, foreign nationals earned more than 50% of master’s degrees in engineering and 63% of PhDs.
Less than 20% of graduate engineering students in the U.S. are women, and only 10% of the engineering workforce is female. This makes it the most segregated of all professions in the U.S. today.
This does not bode well for the manufacturing base in the United States—and that means us. If America is to maintain its manufacturing know-how, we must fill that engineering pipeline. We cannot afford to be slow to market because of an insufficient engineering base at home.—Anne Stevens
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